# Lecture 2 - Project Management Flashcards

There are two network-techniques that we have learned to apply in this lecture, which ones and what do they stand for?

PERT - Project Evaluation Review Technique

CPM - Critical Path Method

What are the similarities between PERT and CPM?

They break down large complex projects into sub-activities, deploying resources and managing the circles of the projects in order to minimize the total cost and time of the project.

What are the differences between PERT and CPM?

- PERT takes uncertainty into account which CPM doesn’t.
- PERT is event-oriented, probabilistic, and concerned with time only and applies to projects in which the time horizon is unknown.
- CPM is activity-oriented and is a deterministic model and is used for projects that are repetitive in nature and are small in size.
- PERT will be more effective for projects with an unknown time estimate, while CPM will work well for a project with a known time estimate.

In project management, we go through 3 techniques, which ones and how do they work.

Gantt - This is a model in which we have activities to the left and the on the top we have which amount of time we spent on each activity in order to reach the optimal level.

PERT - PERT is event-oriented, probabilistic, and concerned with time only and applies to projects in which the time horizon is unknown.

CPM - CPM is activity-oriented and is a deterministic model and is used for projects that are repetitive in nature and are small in size.

There are six steps within PERT and CPM, which ones?

- Define the project and prepare the work breakdown structure.
- Develop relationships amongst activities - when can we start with which project?
- Draw the network of all activities
- Assign time and/or costs to each activity
- Compute the longest path through the network - aka The Critical Path
- Use the network to manage the project

What do AON and AOA stand for and what is the difference?

Activity on Node and Activity on Arrow.

1. AOA - could sometimes be more complicated because we have to work with dummy variables.

The Critical Path is the longest time through the network but also the shortest time it takes to complete the project, TRUE or FALSE?

TRUE

The Critical Path is the shortest time through the network but also the shortest time it takes to complete the project, TRUE or FALSE?

FALSE, shortest time but longest path

The Critical Path is the longest time through the network but also the longest time it takes to complete the project, TRUE or FALSE?

FALSE

The Critical Path is the shortest time through the network but also the longest time it takes to complete the project, TRUE or FALSE?

FALSE

The activities of the Critical Path have no slack, TRUE or FALSE?

TRUE

PERT allows us to account for variability, in what way and what does it mean?

The formula: t = (a + 4m + b)/6

a = Optimistic time (according to plan)

b = Pessimistic time (Assuming unfavourable conditions)

m = Most likely time (Realistic estimate)

It means that we can account for uncertain conditions in the future and how that will affect the time it takes for something to be completed.

PERT has two assumptions, which ones?

- Total projection completion times follow a normal probability distribution.
- Activity times are statistically independent.

What does it mean to Crash a project?

This means that we reduce the time it takes to complete a project but to a higher cost.

There are four limitations with PERT/CPM, which ones?

- Clearly defined, independent and stable relationships of activities
- Precedence relationships must be linked
- Time estimates tend to be subjective
- Inherent danger of putting too much focus on the Critical Path