PMI PMP Project Management Professional – Introducing Project Schedule Management Part 4
- Bottom-Up Estimating
Bottom up estimating doesn’t mean bottoms up. It means we’re starting at the bottom and accounting for all the cost in our WBS. So it’s usually something that was associated with costs, just like I said, but you could do it with time. All right, so it’s used for resource estimation and used for how long these activities will take. You have to have a work breakdown structure to do a bottom up estimate. So you have to know exactly the type of resources and exactly what that work package is going to create. So you’re accounting for the time in this instance. Later, we’ll see that it works for cost as well. So each work package, each work package can have multiple activities associated with it. So you might have a work package of install the software, but what does that mean? So the activities could be install Microsoft Office, install Adobe Photoshop, install Google Chrome, as we have all these activities that are linked that support the work package of install software.
So those activities then we need to know how long each one of those activities take in order to say how long this work package will take. So bottom up estimating, it’s also known as a definitive estimate, but it takes the longest to create because you have to have a really good WBS and a really good understanding of all of the activities to create the work packages. Again, it’s called bottom up because you’re starting at the bottom at the work package and you’re working your way up. You’re looking at the aggregation of all of the time to predict duration for the project. So bottom up estimating takes the longest to do, but it is the most reliable. You can do this for time and you can do this for cost. So you’re ahead of the curve. You’ll see that coming up later in the course. All right, good job. Keep moving forward.
- Factoring in Reserve Time
There’s a term you need to know for your exam and it’s a contingency reserve and a management reserve. They’re very similar. Contingency reserve is usually associated with money and it’s for risk events that disrupt the project. Management reserve is typically associated with time or money. Management reserve is for when activities take longer than what was planned. You have a pool of time and this is where the or money part comes in.
Or money, because you have to pay for the labor that’s doing that time. It accounts for schedule uncertainty. So the estimated duration we’ve accomplished that, we’ve looked at all of our work packages. We have an estimated duration for the activities in risk analysis and risk identification, and then we do risk analysis qualitative and quantitative. We’ll also have an understanding of not just how much a risk event will cost us, but what’s the disruption in our project, how long. So we have an estimated duration also for our risk events that are in the project. And you’ll see that some of our risks have a low probability and a low impact and we might accept those. And so those risks that are accepted, those could cause a disruption if they happen. The contingency reserve, this is associated with the known unknowns.
You know, there are going to be some activities that are late, you know there are going to be some activities that have a risk that happens, but you don’t know which one. It’s impossible to predict the future. So we have known unknowns. The reserve analysis, what we’re doing here is that let’s say we take a percentage of our project, our project is going to last 60 days plus or -10%, so we have 60 days for the work and then 10% we have a six day buffer that we make up as the reserve for management reserve. If an activity is late, our project doesn’t extend because our project duration isn’t 60 days. Our project duration is 66 days in this example. So it extends now from 60 to 62. Now we only have four days left.
The earlier in the project that I start having activities that are late, that’s a real warning. That’s a risk that my project is going to eat all of the management reserve. So the reserve analysis is how much time have I set back or how much money do I have set back? And if we start having mistakes, then my contingency and my management reserve begins to get depleted and that’s going to affect my project duration overall. Over time, the contingency reserve or the management reserve might diminish. So what happens here with a contingency reserve? Is it’s for risk? So we have X amount of dollars. Let’s say we have $100,000 in our contingency reserve. The closer we get to the end of the project, the fewer and fewer risk we’re likely to have. So that $100,000 pool may also diminish, not to be spent on the project.
But return to the organization, to the portfolio, to now go spend elsewhere. So if we can get by some key big risk events, we don’t need all of that money sitting there in our reserve. So that money can be reduced or even eliminated because we’ve gotten by these big risk events. So, Contingency, this is part of the schedule documentation. It sets the reserve for overruns on time. So we have our Management Reserve, and then our Contingency Reserve is for risk events that can disrupt time, but it’s typically associated with money. Considering Management Reserve, this is a specific amount of funds in the project budget. So, yes, it’s in the project budget, but it’s withheld for control purposes.
Doesn’t mean we get to spend it. It’s for time overruns or risk events. The reserve is for unforeseen work that’s within the scope of the project. We’re talking about unknown, unknowns. So risk events we didn’t even see coming can be paid for, if you will, with this Contingency Reserve. Now, it’s not included as part of the schedule baseline. It’s not part of the schedule baseline, but it is part of the overall project duration. So the schedule baseline in our example might be 60 days, but we have this buffer at the end of six days that’s our Management Reserve contracts may require some management Reserve as a change to the schedule baseline. So in our contract, we have a contract with a vendor, they’re going to use Management Reserve. They get all 66 days is what’s being said here, that they don’t only have to fit to 60, they’re going to get all six days because that affects their pay. They have to pay for that labor, so they want all the time, and it be accounted for that time. So Management Reserve and Contingency Reserve know those terms for your exam. We’ll see Contingency Reserve coming up when we get to chapter eleven in the Pinbach Guide on Risk.
- Developing the Project Schedule
Now that we’ve created our activity estimates, we’ve put things in order. We know how long things are going to take and what resources will be affecting our project duration. We’re ready to begin developing the schedule. So this is where we are really defining the sequence of events. We’ve already done sequencing, but now we’re taking a consideration of the true sequencing as far as our network diagram goes and our duration and what’s the duration of activities, which tells us the duration of our project. This also helps us to identify what resources are needed, where and at what time, because that will affect our sequencing. I can’t have bob on two activities at exactly the same time, so that affects our sequencing.
So this helps us to create a logical relationship from the start of the project all the way to the end of the project. So we’ll develop the schedule are edo’s for schedule development. There are a lot, so let’s walk through these. Your project management plan, specifically, schedule management plan and the scope baseline project documents we’ll need our activity attributes, our activity list, the assumption log, the basis of your estimates, your lessons learned, the milestone list, your scheduled network diagram. You’ll have your team assignments, resource calendars, resource requirements and the risk register agreements. Probably talking about contracts here and then EEF and OPA tools and techniques. We need schedule network analysis, and that’s what we’re getting ready to do.
The critical path method, resource optimization, data analysis. Here’s where we do some what if scenario analysis leads and lags schedule compression, your PMIs and we’ll do agile release planning. My outputs of developing the schedule. I have a schedule baseline, I have the project schedule, scheduled data, project calendars change request you have updates to your project management plan, your schedule management plan, your cost baseline updates to project documents like the activity attributes, the assumption log, lessons learned, register resource requirements and the risk register. So a lot of inputs, tools and techniques here was developed the schedule. So we’re going to hop in now and really look at these tools and techniques. So keep going. We’re going to dig into this in the very next lecture.
- Evaluating the Project Constraints and Assumptions
As we begin to do schedule network analysis. One thing that we have to consider are the project constraints. Project constraints really affect when the work can take place. So you think about at a job site, you’re only allowed to be there between eight in the morning and 08:00 at night, for example, or we’re not working on weekends and company holidays. Regardless, that could affect the duration. So constraints are any time that we have restrictions on when we can do the work. The inverse could be true. We might have an opportunity in a market window and we have to hit a particular date in order to get that opportunity. So our efforts go up. We’re working more hours in a single day to take advantage of that opportunity. We have to work within the parameters of the weather. So in the summer months, maybe you do more construction than you do in the winter months, so the weather can affect when you do the work. Government requirements.
So there’s all sorts of government requirements when it comes to OSHA and manufacturing and health care, all of which could affect the duration of activities that we have to consider. In your industry, you might have some best practices or guidelines when it comes to duration estimating and the effort, so we have to take that into consideration. You might also have some time frame, so external constraint about when materials can be delivered so you’re ready to go, but the vendor is not ready to deliver yet. So you have to work with the vendor and that affects when you can do the work. So project constraints can also be packaged as characteristics on activities. So there are some constraints you should be familiar with. The must start on means you must start on December 1, must finish on, you must finish on January 31.
Those are the most restrictive constraints because you have to start on that specific day and you must finish on that specific day. You can’t get done early, you have to finish on that day. Then we have some that are a little bit more flexible. Start no earlier than December 1 and then start no later than December 1. So let’s think about those. Start no earlier than December 1. This road will be closed to traffic on or after December 1. So we’re going to give everybody warning, find a different route. We’re going to close this road on December 1 or thereafter, but it won’t happen before December 1. The opposite is start no later than. So start no later than. You can start whenever you want, but you better start on that task no later than Friday the 15th or whenever that Friday is. So start no later than a specific date.
You can start before, but if you don’t start by December 1, it’s going to affect the rest of the project. So we got a little bit of flex there and then we have the finish the same idea. The finish, you will finish no earlier than you have to test this product. Run this test all the way through December 31. So you have to keep doing it. You cannot finish before December 31 or you have a deadline. You can finish before, but finish no later than December 31. So those are some constraints. The must start on, must finish on. Know this, that’s the most restrictive. When we have constraints, we probably also have to talk about assumptions.
Assumptions are things you believe to be true, but you haven’t proven it to be true. So you might have some assumptions when it comes to new work or about the risk you’ve identified. There might also be some assumptions when we talk about force majeure or acts of God. So a hurricane, a tornado, you’re assuming those aren’t going to happen in your project. They could, nobody knows. But a forced majeure. So acts of God or acts of nature, if you will. Labor. You have assumptions about labor. You assume your labor is going to not quit in the middle of the project in the effort. You assume that a senior engineer can actually do that activity in X amount of times because she said she could. So you have some assumptions that yeah, she’s able to do that.
So labor and effort, you might have assumptions. If those don’t prove true or false, then that can affect your duration and that will affect your schedule, which introduces to risk. Risk is an uncertainty vent or condition. Risk can have a positive or a negative effect, though most of us think of risk with the negative connotation. And we’ll talk more about that in chapter eleven on Risk Management. In regards to our schedule, risk needs to be addressed because we have knowns and we have unknowns. A known is. We know these risks exist. We know there’s a risk the vendor could be late. We know there’s a risk that the paint may take longer to cure than what we have experienced in the past. It’s a risk that could happen. So unknown are things you’ve already identified. An unknown is where something just comes out of nowhere and disrupts your schedule. So an unknown could be you’re out there doing construction and you unearth some old clay pots that are from a civilization and so you have to stop construction and they’re going to go dig around and look for dinosaur bones or whatever, and that disrupts your project. You don’t know until you really get in there and start discovering what’s underground.
So that could be an unknown. So an unknown is any risk you’ve not identified, you don’t know what the characteristics are or the effect may be until you get into the project and it happens or is about to happen. Risk analysis affects completion. So we’ll be looking at qualitative and quantitative analysis. Quantitative analysis is the more serious in depth of the two you’re quantifying the impact. And then risk affects, of course, cost and time. We often think about risk in the financial factor, but there’s also a time that could push your project out, which might cause other delays in your project, because now resources have to go elsewhere, or you’ve promised to free up resources at a given date or whatever the case may be. So we have to consider here assumptions, constraints, and the possibility that risk could disrupt our project. All right, great job. I’ll see you in the next lecture.
- Performing Schedule Network Analysis
Schedule. Network analysis is a tool and technique to find the earliest and the latest project completion date. We’re looking for opportunities to delay. We’re looking for opportunities to shift resources and also doing some SWAT, some strengths, weaknesses, opportunities, and threats analysis. So let’s let’s take a look at that. Now, what we’re talking about in this lecture is finding float. There are three types of float you need to be familiar with for your exam.
We have free float, and that’s when an activity can be delayed without delaying your early start of any successor activities. Total float is an activity can be delayed without delaying project completion. And then project float is a whole project can be delayed without missing your deadline. So, for example, project float, your project takes 30 days to do all the work, but you have a year to get it done. So you have a big window there for project float. What we’re primarily interested in is free float and total float. Free float, we’re looking at one individual activity in the successor. Total float is what’s the total amount of duration I can have on a task without affecting the end date? Now let’s look at how to find float.
So this is a project network diagram. So you can see these different nodes. Each one of these nodes represents an activity. The little number you see in the middle, that represents the duration. So what we want to do first when you get one of these questions on your exam is you want to draw it out on a piece of paper. Don’t just stare at the screen. It’s too complex. You want to draw this out. Then the next step that we want to do is find all of the paths and their duration in the project. So in this example, we can go abehjk. And if we add that up, three and six is nine. I’m adding the duration here. A is three, b is six. Three and six is nine, plus two is eleven, plus three is 14, plus three is 17, plus two is 19. So in the lower right hand corner, we see abe HJK. That’s 19 days. Then we have the path of acfhjk. And that one takes 22 days. And then we have the path of A-D-G IK, and that takes 21 days. So it’s important to find each one of your paths in the duration because this shows you the critical path.
The critical path is the longest path, meaning it’s the longest in duration in our project. So the critical path doesn’t mean those activities are more important than the other activities. It just means that those are activities that cannot be delayed. So our critical path here is acfhjk. There will be no float on the critical path because remember, float is an opportunity to delay. We can’t delay any of those activities or our project is going to be late on B and E and D and g and I, there is an opportunity to delay. So that’s what we need to do next is find the float on each one of our activities. To do this, we’ll do a technique that’s called the forward pass. The forward pass, if you look at activity A begins with the early start plus the duration, which is represented by du minus one will tell you the early finish. Now, why minus one? Well, here’s why. If you take one plus three, that will be four, right? But if you start work on Monday and you work all day Monday and all day Tuesday and all day Wednesday, you’ve actually only worked three days, not four.
So one plus three is four, minus one is three. So that’s our forward pass. Now, where do we get one from? The first day of the project is day one. Now, I know some of you know a different way to do this, and that’s fine, use what works. The goal here isn’t to use my way. The goal is to answer these questions correctly and pass the exam. But I prefer this approach, so that’s the way I’m going to teach it. I think it makes more sense because you always start on day one in a project. So I’ll give a little wink there. Some of you others know what I’m talking about. This is the way you want to do it, though. So once you do it a couple of times, you’ll be a wizard at this. So let’s look at activity A and we’ll follow our formula through here. So we start on day one. One and three is four, minus one is three. The earliest you can finish A is day three. Now activity B, C and D can all start when? As soon as A is done. So the next day.
So that’s why we see for B, C and D. They all have their early start as day four, because you can start as soon as A is done. Let’s go to activity B. Four plus six is ten, minus one is nine. That’s the early finish for B. Activity C, four plus seven days of duration puts us at day eleven. Minus one is day ten. Now activity D, four plus nine is 13, minus one is twelve. So what we’ve done is we aren’t taking one path and just blowing all the way through to the end. You have to follow this logical, methodical approach because you’re only looking at the next successor one successor at a time. You can’t blow through the whole path and complete it and then come back and say, we’ll do the next one and the next one. You do one successor at a time. So now let’s go to activity E. Activity E can start as soon as B is done, right? So B ends on day nine, e can start on day 1010, and two is twelve, minus one is eleven. Activity F can start as soon as C is done, so it can start on day eleven. Not also. So C finishes on ten. F can start at 1111 plus four days of duration is day 15, minus one is 14 and then drop down to activity G. G then can begin as soon as D is done.
So D will end on day twelve. G can start on day 13. There’s only one day of duration for activity G. So 13 and one is 14. You’ll also finish on day 13. Let’s go up now to activity H. When can activity H start? What’s its early start? Day 15, not day twelve. Because what must be true for H to start e has to be done and F has to be done. So that’s where I was saying you can’t just blow through the path because if you started at the top and just went all the way through all of those nodes, you would probably put activity H could start on day twelve without considering when F would actually finish. So H can begin on day 15. E and F has to be done. So the greater of the two is day 14, which tells me H can start on day 1515 plus three. Days of duration is 18, minus one is 17. J can begin as soon as H is done. So its early start is 1818 and three is 21, minus one is 20. We go back down to I think I skipped, I here.
So G is done on 13. We go. The next day is day 1414 and six is 20, minus one is 19. Now look at activity K. Our last activity K cannot start until J and I are complete. So the earliest it can begin is day 21. Because J finishes on 20, I finishes on 19. So K 21 plus two is 23, minus one is 22. Now look at our path duration. Acfhjk is 22 days, k ends on day 22. If those two numbers don’t match, if somehow in your math here you came up on day 20 as the last day or day 28, you made a math error somewhere. The last number, the early finish for K has to equal the same duration as the critical path. If they don’t, did some math wrong. So double check your math. That’s the first part of the equation. All right, the forward pass. Now we do the backward pass. It’s very similar, very similar. But now we’re going to be minusing the duration and adding one day. So we start at the end. Very similar.
We start at the end with K. Our late finish will equal our early finish. So our late finish is day 22. If we follow our formula, late finish minus the duration plus one. So 22 minus two is 20, plus one is 21. That’s our late start. J has to finish by day 20. So if we look at day 21 on K, that’s the latest it could start to finish the whole project. So J has to be done by day 20, but what else is true? I has to be done by day 20. So J and I, the predecessors to K, can only take to day 20 without affecting K. So J’s late finish will be 20 and I’s late finish will be 20. On activity J, if we do our formula, our late finish minus the duration plus 120, minus three is 17, plus one is 18. On activity I, 20, minus six is 14, plus one is 15. Let’s go to activity H. Activity H can take all the way out to day 17 without affecting the late start. For J day 18, so H, its late finish is 1717, minus three is 14, plus one is 15. Activity E and activity F, they can both take out to day 14 without affecting H. S
o their late finish will both be 1414 on F, 14 on E. On F 14 minus four is ten, plus one is eleven. On E, 14 minus two is twelve, plus one is 13. Look at activity B, you can take all the way out to day twelve without affecting the late start for E, so it’s one day prior will be 1212, minus six is six, plus one is seven. Activity G, let’s hop down the bottom. G I can take to 1414, minus one is 13, and so its late start will be day 14. And activity D I can take out to day 1313, minus nine is four, plus one is five. Now activity F, I think we did 14, minus four is ten, plus one is eleven and C will be day 1010, minus seven is three, plus one is four. Now look at Activity A. Activity A has to be done by what day without affecting the successor activities. Day three, because it has to finish by day three, because C can start no later, its late start is day four.
So three minus three is zero. There’s no such thing as day zero. So three minus three is zero, plus one is one and that is the backward path. Now I want you to notice something here. On our critical path, those that are in blue notice that the late finish is the same number as the early finish and the late start will be the same number or value as the early start. So on the critical path, once you know it a little shortcut, you can do on the backward path are just drop those values down, they will be the same because the difference of our late finish and early finish will be float. And there’s no float on the critical path. So let’s look at that.
How do you find float? You can take the late finish minus the early finish and that will show float. Or you can do the other side, which will be the late start minus the early start. And if you’re not a math person. That’s a great way to check your math is to do both sides. What I mean by both sides is, for example, on activity E, 14 minus eleven, my late finish minus my early finish, 14 minus eleven is three. On the other side of the box we have our late start. Minus the early start. 13 minus ten is also three. If those two numbers match, you know your math is correct. If they don’t match, then somewhere there’s a mistake. So it’ll be the same number on either side, whether you’re doing the late finish, early finish or the start side of our node. So if we plug in that formula that we find our float. So let’s go through and do this. We know on Acfhjk is zero. So if you look at any one of those in blue, the difference will always be zero. On activity B, twelve minus nine is three. So you see the middle node there? On the bottom between, we have 7312. That three represents float. That’s where you write in your float.
So twelve minus nine is three, or seven minus four is three. On activity E, 14 minus eleven is three. On activity D, we have one day afloat. On activity G, we have one day afloat. And on activity I, we have one day of float. So that’s it. That’s how you find float. Take some practice. So what type of exam questions will you have here? When it comes to float? You will likely see a network diagram not unlike this. It’s very possible it would be like this. And then they will ask you if activity D were to take two days of float, how much float could you have on activity I? So now you have to do the math to figure out how much float is there and what would it do to the total float for the whole project. If you follow this sequence we just walked through a lot of times, as soon as you find the critical path, you can look at the question, and then from that you can deduce the amount of float you would have. For example, how much float could you have on activity F? Well, you could see it’s on the critical path, so you get zero float. But if we look at activities A, DGI or K, I only have one day of float on D G and I, right? Each day has one day afloat. Can I really use one day afloat on D, one on G and one on I cannot, because that path of ADGI and K takes 21 days. What’s the maximum duration for our project? 22 days. So D, G and I can only use one day afloat.
So if I use the one day afloat on activity D, G and I can’t touch, that’s a near critical path, it doesn’t mean that it’s critical, it’s near critical. I only have one day afloat. It’s really tight here. So on G and I won’t have any float left if I use it on D. So those are the types of questions you’ll have. Let’s look at activity B and E here. On B you have three, and on E you have three. Do you really get six days of float? No, you have three. A quick way you can do this. If you find your paths, like our very first step, so I know you’re going to do that, you can very quickly deduce on the activities that are not on the critical path. What’s the maximum amount of float you could use? You have to be careful, though, because it’s the branching like E and F, that can affect how much float it won’t always be. You have three on B and three on E. If there was some branching going on here between B and E, then that could affect how much float you get on B. So you can’t just always assume it’ll be the same for every activity. Often it is, but not always. So you have to do this float. So take some practice. I know it’s tedious. Also know you’re not going to have 20 questions on this. You’re not going to have 200 questions on this. You’ll have a flu, asked a few questions about float, so you need to know how to do it. But I wouldn’t spend an hour trying to figure this out on your exam. Hard questions are worth the same amount as easy questions. All right, keep going. I’ll see you in the next.