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Questions and Answers
What is the primary purpose of contingency in the CCM estimation process?
What is the primary purpose of contingency in the CCM estimation process?
In the context of CCM estimation, how is the total duration calculated?
In the context of CCM estimation, how is the total duration calculated?
What ensures that the project plan in CCM is shorter compared to standard approaches?
What ensures that the project plan in CCM is shorter compared to standard approaches?
What happens during plan execution if activities last longer than planned?
What happens during plan execution if activities last longer than planned?
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What does overallocation refer to in resource management?
What does overallocation refer to in resource management?
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What is one key aspect of the basic idea behind CCM?
What is one key aspect of the basic idea behind CCM?
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In the provided example, during which week is Resource 1 overallocated?
In the provided example, during which week is Resource 1 overallocated?
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What is one proposed method to prevent resource overallocation?
What is one proposed method to prevent resource overallocation?
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What does a 'vertical' sum over work assignments indicate?
What does a 'vertical' sum over work assignments indicate?
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Why might a project have hard constraints regarding deliverables?
Why might a project have hard constraints regarding deliverables?
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Which task combination leads to the overallocation of Resource 1 in the example?
Which task combination leads to the overallocation of Resource 1 in the example?
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What is the primary indicator that resource management has reached a problem?
What is the primary indicator that resource management has reached a problem?
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When managing a project, failing to recognize overallocation can lead to what outcome?
When managing a project, failing to recognize overallocation can lead to what outcome?
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What is the primary mechanism of fast tracking in project management?
What is the primary mechanism of fast tracking in project management?
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Why might a team decide to deliver work late instead of working overtime?
Why might a team decide to deliver work late instead of working overtime?
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What does fast tracking rely on during the execution of activities?
What does fast tracking rely on during the execution of activities?
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When considering fast tracking, what must a project manager assess about the intermediate outputs?
When considering fast tracking, what must a project manager assess about the intermediate outputs?
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What is a significant risk of fast tracking in project management?
What is a significant risk of fast tracking in project management?
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When determining which dependencies to break for fast tracking, what should be closely assessed?
When determining which dependencies to break for fast tracking, what should be closely assessed?
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In the context of fast tracking, why is it beneficial to start dependent activities earlier?
In the context of fast tracking, why is it beneficial to start dependent activities earlier?
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Which of the following represents a misconception about fast tracking?
Which of the following represents a misconception about fast tracking?
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What is the primary assumption of Critical Chain Management regarding activity duration estimates?
What is the primary assumption of Critical Chain Management regarding activity duration estimates?
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In Critical Chain Management, what is the purpose of 'padding' estimations?
In Critical Chain Management, what is the purpose of 'padding' estimations?
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What is a key characteristic of the standard deviation of a chain of activities in Critical Chain Management?
What is a key characteristic of the standard deviation of a chain of activities in Critical Chain Management?
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What does 'contingency' refer to in the context of activity duration estimates?
What does 'contingency' refer to in the context of activity duration estimates?
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Why is Critical Chain Management considered effective?
Why is Critical Chain Management considered effective?
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How does Critical Chain Management handle the problem of traditional estimation techniques?
How does Critical Chain Management handle the problem of traditional estimation techniques?
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What is the consequence of assuming activity durations are purely pessimistic?
What is the consequence of assuming activity durations are purely pessimistic?
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What does Critical Chain Management emphasize when planning project activities?
What does Critical Chain Management emphasize when planning project activities?
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What is the primary focus of a manager in the context of chain management?
What is the primary focus of a manager in the context of chain management?
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In the contingency buffer management, what is a sign that action may be needed?
In the contingency buffer management, what is a sign that action may be needed?
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Which question relates to the concept of budgeting in software project management?
Which question relates to the concept of budgeting in software project management?
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When considering buffer definition, what must be determined?
When considering buffer definition, what must be determined?
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What happens if A1 lasts longer than planned in a chain?
What happens if A1 lasts longer than planned in a chain?
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Which option best describes the role of chains in project management?
Which option best describes the role of chains in project management?
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Which of the following is NOT part of buffer management?
Which of the following is NOT part of buffer management?
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What implication does a task that lasts as planned have for the contingency buffer?
What implication does a task that lasts as planned have for the contingency buffer?
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What is the primary focus of budgeting in project management?
What is the primary focus of budgeting in project management?
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Which of the following best describes direct costs in a project?
Which of the following best describes direct costs in a project?
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What does the Cost Element Structure help achieve in project cost management?
What does the Cost Element Structure help achieve in project cost management?
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Which of the following is considered an indirect cost?
Which of the following is considered an indirect cost?
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What is the purpose of life cycle cost (LCC) in project management?
What is the purpose of life cycle cost (LCC) in project management?
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Which option accurately describes indirect costs allocation?
Which option accurately describes indirect costs allocation?
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What is included under personnel direct costs in a project?
What is included under personnel direct costs in a project?
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What is the primary role of cost control in budgeting?
What is the primary role of cost control in budgeting?
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What is meant by 'project overheads'?
What is meant by 'project overheads'?
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Study Notes
Optimizing the Plan
- Critical Path Method (CPM) focuses on duration, not risk or difficulty
- Activities outside the critical path can still delay the overall project if the delay is significant.
- Delays in non-critical activities can impact critical path activities and project timelines.
- Inputs for planning include activities, constraints, effort, team, and delivery dates.
Resource Allocation and Leveling
- Resource allocation assigns resources to tasks based on availability and needs.
- Over-allocation (exceeding maximum availability) is a constraint that must be managed.
- Resource leveling adjusts assignments to avoid over-allocation.
- If no solution is found, testing different hypotheses (e.g., increasing team size or relaxing constraints) can help.
Resource Allocation Examples
- Resource allocation examples show resource assignment percentages and hours per week.
- R1 is allocated 50% of time to Task 1 and 50% to Task 3; R2 is fully allocated to Task 2 and 50% to Task 3.
- R1 works 20 hours each week, while R2 works 40 hours per week.
Resource Usage
- Manpower usage refers to the time each resource is needed.
- Equipment usage counts the items of equipment needed.
- Material usage tracks the quantity of materials required.
How is Resource Usage Computed?
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Resource usage sums work allocated for each period, essentially taking a vertical total over the work assignments.
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Overallocation happens when resource use exceeds maximum capability.
Example
- R1 is overallocated in week 2 (T+1w) and week 3 (T+2w).
More Complete Example
- The provided example visually highlights constraints and shows two resources assigned to Task 2 to accommodate those constraints.
Example
- Task 1 and Task 3 require the same resource resulting in overallocation
Example
- Solution 1 involves resource leveling with soft constraints to prevent overallocation.
- Solution 2 discusses several compression techniques.
Goals of the Unit
- Learn techniques to shorten project plans.
- Understand risks associated with shortening project plans.
Change Control and Configuration Management
- This relates to quality, risk and resource management during the project execution.
Preliminary Consideration
- The initial plan often reveals the project won't meet the deadline given assumptions.
- If the plan is accurate, options include not starting the project or shortening it.
- Revising the estimations isn't a recommended approach.
Making your plan feasible
- Change project hypotheses (reduce scope, quality, outsource).
- Adjust the project logic; e.g., increase resources, change the process.
- Break constraints (e.g., fast tracking).
- Manage probability of delivering on time (e.g., critical chain management).
Project Crashing
- Project crashing shortens the project timeline by accelerating critical path activities within the project.
- It focuses on reducing duration while minimizing cost impact.
- More labor or resources are applied to critical path activities, which may increase the project cost.
- The decision to use crashing is based on a tradeoff between time and cost.
Project Crashing Example
- Project crashing examples illustrate cost/benefit analysis between increased costs and faster project completion timeline in scenarios
Project Crashing (Simple) Example
- Late projects incur delay costs.
- Activities (e.g., task 2 and 3) can be shortened by adding resources; the costs are given as example figures
Project Crashing (Simple) Example
- The best way to proceed depends on whether shortening project and increasing resulting costs are a preferred solution
Fast Tracking
- Overlapping activities in a project (that were sequential / finish to start) can shorten the project timeline.
- This method leverages the fact that some project deliverables/outcomes are incrementally produced/refined during the activity execution.
Fast Tracking, Issues and Rules
- Fast tracking carries risks, including rework. Evaluating dependencies' effects, such as intermediate outputs and stability, is critical.
- Rework in a subsequent activity might negatively impact the overall plan, and this is a risk that must be assessed
Fast Tracking, Pros and Cons
- Pros include no extra costs and shortened project time, while cons include increased risk due to more sensitive networks and greater need for communication.
Fast Tracking vs Resource Crashing
- Comparison of fast tracking and resource crashing is presented visually.
Critical Chain Management
- Critical Chain Management assumes that estimations are average guesses and thus projects are likely completed later than expected
- Attempts to manage contingencies via padding estimates to be a pessimistic / more likely completion times
CCM: Item 1 (Estimates)
- In CCM, project estimations focus on probable duration estimates rather than worst-case scenarios
CCM: Item 2 (Sum of Variances)
- Using chains for activities reduces the variance in overall time estimations compared to summing each individual activity uncertainty. Variance calculation of projects (consist of multiple activities) is less than the sum of individual activities variance.
CCM Basic Idea
- CCM emphasizes considering chains of activities, and the explicit allocation of contingency buffers to handle uncertainty in estimations.
- Statistical variation during project execution might cause delays, but having buffer time within the plan helps to manage that uncertainty
CCM: Managing Chains
- Identifying how chains of activities will be prioritized and how to adjust for contingency is crucial in project estimation models using CCM
Costing and Budgeting (from cost to value)
- Budgeting entails assessing financial needs and recording relevant expenditure and income data.
Goals of the Unit (Costing and Budgeting)
Understand software development costs. Determine whether a project stays on budget.
Some Definitions
- Costing defines the bare cost of the project (excluding profit)
- Budgeting/cost control addresses the project's financial needs and the recording of expenditure and income.
- Pricing estimates how much a product or project will cost
- LCC (Life Cycle Costs) examines the total cost anticipated for the entire project lifecycle
(Software) Project Costing
Project Cost Management
- Defines policies and procedures for cost planning, management, tracking and control. Summarizes associated processes.
Project Cost Management (Process)
- Highlighting all of the costing management input parameters, along with the Plan Cost Management process itself, as well as the output.
Project Cost Management (Process)
- Defines the various input components involved in the management process.
Project Cost Management
- Shows detailed definition of components that influence costing, including units of measure, cost levels, accounting relationships, acceptable thresholds for variance from budget, earned value, and reporting formats.
Estimate Costs
- This process uses inputs like a cost management plan and a project schedule to estimate the resources needed to complete the project.
Project Cost Management
- Defines the budget as the aggregate of the individual activity costs. Defines various inputs (Cost management plan, Scope baseline, Activity Cost Estimates, Basis of Estimates, Project Schedule, Resource calendars etc.) for the determination of the budget.
Project Costing (Software)
- Project cost is defined as total expenditures
- Cost element structure comprises direct and indirect costs
Direct Costs
- Direct costs include salaries of project personnel, materials, supplies, hardware, and software; travel, meetings and miscellaneous expenses.
Indirect Costs
- Indirect costs consist of general overheads, such as office space rent and utilities, materials, administrative staff, and project overhead expenses specific to the project.
Indirect Costs Computation
- Determining indirect costs may involve analysis of previous expenditure, projection of future costs, estimation of work output, and rate of overhead determination
Personnel Costs (Gross vs. Net)
- Gross pay excludes deductions, whereas net pay reflects salary after these deductions, including taxes, retirement, and other contributions.
Project Cost Formula
- Provides a mathematical and defined formula for calculating project costs
Project Cost
- Project costs can be viewed from several perspectives.
Managing Project Costs
- Project goals include ensuring funds are available for spending and that project expenditure adheres to the budget.
- Key means include defining a baseline/cash flow, expense authorization, and expenditure tracking.
Project Costs and Project Structure
- Illustrates a visual mapping (WBS, Work Breakdown Structure) of cost elements.
Project Costs and Time
- Depicts a financial status (of project costs and incomes) over various measurement periods (e.g., quarters), demonstrating project performance and financial need status.
Project Costs and Time
- Shows costs (e.g., expenses and incomes) across multiple time quarters (e.g., Q1, Q2). Provides a summary of financial status at points in time
Project Costs and Time (Banana Shape)
- Shows the ideal project cost trend over time graphically. Indicates typical and realistic cost profiles for projects.
Expenditure/Load Profile
- Workload distribution over time, not necessarily uniform, can be front-end loaded or back loaded as well as linear, and project planning may use this information.
Expense Authorization
- Project management/financial management teams usually operate in different structures.
- Authorizations for expenses and payments might be managed by the project managers or via workflow approvals requiring more complex procedures
Expense Authorization (Example)
- Example workflow diagram illustrating the step by step required expense authorization process
End of Period Reporting
- Documentation about project financial status is developed for each accounting period.
- Information includes budgeted expenditure vs. actual expenditure as well as expenditure recording for the project. This data is essential for monitoring budgets, analyzing variances and future predictions as well as reporting processes at the close of each accounting period
The Workflow
- Workflows are presented graphically, showing steps involved in budgeting, spending, and managing expenditures for projects
What information you are interested in
- Key information for managing budgets as well as associated variances and expenditure includes details such as budget, transfers, and actual expenditure amounts.
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Description
Test your understanding of the Critical Chain Method (CCM) estimation process. This quiz covers key concepts like resource overallocation, project duration calculations, and the implications of plan execution on project management timelines. Explore the important strategies for effective resource management in project planning.
