Baselining for Triple Constraint Variances - Essay Example

Project management Number: Lecturer: Project Management Task Total Cost Baseline Variance Actual Remaining Planning $20,224.80 $17,844.00 $2,380.80 $12,733.20 $7,491.60 Identify partners $2,592.00 $3,240.00 ($648.00) $2,592.00 $0.00 Product listed budget $3,628.80 $2,160.00 $1,468.80 $3,628.80 $0.00 Marketing $5,424.00 $3,864.00 $1,560.00 $5,424.00 $0.00 Engineering design $5,720.00 $5,720.00 $0.00 $1,088.40 $4,631.60 Manufacture $2,860.00 $2,860.00 $0.00 $0.00 $2,860.00 Section 2: Baselining for Triple Constraint Variances Table 1 below on Cost Variance for new product launch, shows the required tasks to complete the deliverable for the shared drives work package were planned to be completed by March 2013and use 310 hours of work. The following tables indicate the progress of the required tasks. The bottom bar of the tracking Gantt chart depicts the planned schedule for the tasks. The top bar indicates the actual performance and the percent complete for the tasks. Table 2: Work Variance for new product launch Task Name Work Baseline Variance Actual Remaining % W. Complete Planning 351.2 hrs 310 hrs 41.2 hrs 228.8 hrs 122.4 hrs 65% Identify partners 48 hrs 60 hrs -12 hrs 48 hrs 0 hrs 100% Product listed budget 67.2 hrs 40 hrs 27.2 hrs 67.2 hrs 0 hrs 100% Marketing 96 hrs 70 hrs 26 hrs 96 hrs 0 hrs 100% Engineering design 100 hrs 100 hrs 0 hrs 17.6 hrs 82.4 hrs 18% Manufacture 40 hrs 40 hrs 0 hrs 0 hrs 40 hrs 0% Table 3: Schedule Variance for New Product Launch Task Name Start Finish Late Start Late Finish Free Slack Total Slack Planning 3/12 4/26 3 5/21 16.83 days 16.83 days Identify partners 3/12 3/16 3 3/16 0 days 0 days Product listed budget 3/19 3/27 3/19 3/27 0 days 0 days Marketing 3/28 4/5 3/28 4/5 0 days 0 days Engineering design 4/6 4/24 4/6 5/17 0 days 16.83 days manufacture 4/24 4/26 5/17 5/21 16.83 days 16.83 days Gantt chart for new product launch Section 3: PERT analysis/ CPM Considering the PERT/CPM case, optimistic time estimates denoted by (o), are used. This is applied alongside the most likely time given by (m) (Kerzner, 2009). On equal footing, pessimistic time will be identified by (p). This gives a basis for determining variances in the project and statistical mean for every activity in the new product launch project. The activity is determined by Mean = (o + 4m + p)/6. Its variance will be given by activity (Variance) = ((p - o)/6)2. The value attained is the z-value which can be related in the z-tables to give the probability of completing the project in time (Phillips, 2004). Table 3: Activity Variances and Mean Times ID Activity Optimistic time (days) Most likely (days) Pessimistic (days) A Planning 19 23 27 B Identify partners 5 7 11 C Product listed budget 5 7 11 D Marketing 6 8 12 E Engineering design 1 2 4 Expected completion time Activity Expected completion time(days) Variance (days) Planning 23 0 Identify partners 7.3 0.3 Product listed budget 7.3 0.3 Engineering design 8.3 0.3 Marketing 2.2 0.2 Variance is -0.7 days Activity Early Start Late Start Early Finish Late Finish Slack Critical path 1 Planning 0 0 23 23 0 Yes 2 Identify partners 23 23 30.3 30.3 0 Yes 3 Product listed budget 30.3 33 38 38 5 Yes 4 Engineering design 38 38 44 44 0 5 Manufacture 44 44 46 46 0 Yes Section 4: Report The CPM/PERT technique were used alongside the base lines for cost, work and schedule variances. The assumption taken was that the duration of activities was established with certainty. The realistic duration will make up to precisely as estimated (Oduwole, 2002). Nonetheless, in actual activities, this is impossible and several projects entail variability in activity times owing to factors like lack of previous experience, breakdown of equipment, erratic weather conditions. Besides, late supply of deliveries is an impediment. PERT analysis is applicable when activity durations are not known with precision. It constitutes three estimates of the activity duration as opposed to the single value analysis identified with CPM: 1. The time an activity will cover under the most positive circumstances becomes the optimistic duration (a). 2. The time an activity will cover under the most adverse circumstances will be given as pessimistic duration (b) 3. The most practical activity time needed for the project to be completed, is the activity time taken under ordinary situations. This is the most likely duration (m) The base line conditions for this report assessed and evaluated the situation of work considering the baseline and actual reporting. For instance, a deviation in the original budget is captured and observed in the percentage of work covered, the budget allocation and the amount of work remaining. This is a useful piece to learn from since the project manager can read the variance with ease and try to correct any change in project scope (Oduwole, 2002). This is the significance of using project management techniques to monitor and evaluate work progress. Any work related delays will be easily identified and correction made by observing the cause of such changes (Heerkens, 2007). Similarly, the schedule can be monitored for deviation. The possible correction to schedule is to check on the capability of the manpower or work force (Cleland, & Ireland, 2006). If work is going slowly than expected, it may mean that more indirect costs continue to accrue while driving the planned costs higher. The aspect of using PERT and baseline variances is to allow monitoring and evaluation of the project triple constraints that affect the overall performance of the new product launch project. The question remains as to how the project manager will meet the extra costs if the project has cost overruns (Oduwole, 2002). The implications of increasing costs emanates from poor use of project management tools and billing methods. The costing variances are borrowed from the supply chain management systems which apportion materials and costs to almost a minor degree of changes occurring between planned and actual costs (Lock, 2007). The resulting analysis of cost, work and schedule is significant in every project and thus advised in events requiring robust planning, implementation and monitoring of outcomes. The eventual project output in the case of new product launch becomes and success that is worth celebrating. Other techniques like Gantt charts will help in logical sequencing of activities having interrelationships (Oduwole, 2002). References Cleland, DI, & Ireland, LR 2006, Project Management: Strategic Design And Implementation, McGraw-Hill Prof Med/Tech. Heerkens, G 2007, Project Management: 24 Steps to Help You Master Any Project, McGraw-Hill Professional. Kerzner, H 2009, Project Management: A Systems Approach to Planning, Scheduling, and Controlling, John Wiley & Sons, New York. Lock, D 2007, Project Management, Gower Publishing, Ltd. Oduwole, S 2002, Project management pathways, APM Publishing Limited, London. Phillips, J 2004, IT Project Management: On Track from Start to Finish, McGraw-Hill Professional, New York. Read More