Introduction: The competencies required for developing business cases comprise a range of skills, including those for:
• facilitation and negotiation
• demand management
• risk management
• value management
• economic, social, environmental and budget analyses, and
• strategic planning.
Introduction
CPM/PERT or Network Analysis as the technique is sometimes called, developed along two parallel streams, one industrial and the other military.
CPM (Critical Path Method) was the discovery of M.R.Walker of E.I.Du Pont de Nemours & Co. and J.E.Kelly of Remington Rand, circa 1957. The computation was designed for the UNIVAC-I computer. The first test was made in 1958, when CPM was applied to the construction of a new chemical plant. In March 1959, the method was applied to maintenance shut-down at the Du Pont works in Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.
PERT (Project Evaluation and Review Technique) was devised in 1958 for the POLARIS missile program by the Program Evaluation Branch of the Special Projects office of the U.S.Navy, helped by the Lockheed Missile Systems division and the Consultant firm of Booz-Allen & Hamilton. The calculations were so arranged so that they could be carried out on the IBM Naval Ordinance Research Computer (NORC) at Dahlgren, Virginia.
1) The document discusses project management tools including network analysis techniques like CPM and PERT.
2) CPM and PERT are used to plan and schedule complex projects using network diagrams that show the logical sequence and relationships of tasks.
3) PERT uses three time estimates for each activity - optimistic, most likely, and pessimistic - to calculate the expected duration using probability.
Introduction 1
Network is a technique used for planning and scheduling of large projects in the fields of construction, maintenance, fabrication, purchasing, computer system instantiation, research and development planning etc. There is multitude of operations research situations that can be modeled and solved as network. Some recent surveys reports that as much as 70% of the real-world mathematical programming problems can be represented by network related models. Network analysis is known by many names _PERT (Programme Evaluation and Review Technique), CPM (Critical Path Method), PEP (Programme Evaluation Procedure), LCES (Least Cost Estimating and Scheduling), SCANS (Scheduling and Control by Automated Network System), etc
This chapter will present three of algorithms.
1. PERT & CPM
2. Shortest- route algorithms
3. Maximum-flow algorithms
The document discusses project management techniques CPM/PERT. It provides examples of 3 different project managers and their roles overseeing construction of a retail complex, clinical trials for a new drug, and introducing new teaching resources at a college. It then defines key characteristics of projects, examples of project types, and an overview of what project management entails. The document proceeds to describe the project management process and techniques used in CPM and PERT including network diagrams, critical path analysis, and probability calculations for assessing project completion time.
This document provides an overview of project management techniques including PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method). It defines key project management terms and explains the steps to create a PERT chart including identifying activities, sequencing activities, estimating activity times, determining critical paths, and updating the chart over time. The document also discusses calculating early start/finish and late start/finish times using forward and backward passes. Overall, it serves as a comprehensive introduction to project scheduling tools PERT and CPM.
This document discusses project management and the Program Evaluation and Review Technique (PERT). It begins with introductions to project management and PERT. PERT is a statistical tool used to analyze tasks in a project and determine the minimum time needed. Key PERT concepts discussed include critical path, float, expected and normal times. The document provides a theoretical example and then applies PERT to an industrial example of assembling a switch board. Key steps of PERT execution are outlined. Questions about project management responsibilities are also addressed.
The document discusses project planning techniques like PERT and CPM. It explains that PERT and CPM help managers plan, schedule, and control complex projects with limited resources. Both techniques use network diagrams to visually represent project activities and their relationships. The key difference is that PERT uses three time estimates for activities and probability to estimate completion times, while CPM uses a single time estimate. The document then provides examples of network diagrams for construction projects and explains how to identify the critical path.
Introduction
CPM/PERT or Network Analysis as the technique is sometimes called, developed along two parallel streams, one industrial and the other military.
CPM (Critical Path Method) was the discovery of M.R.Walker of E.I.Du Pont de Nemours & Co. and J.E.Kelly of Remington Rand, circa 1957. The computation was designed for the UNIVAC-I computer. The first test was made in 1958, when CPM was applied to the construction of a new chemical plant. In March 1959, the method was applied to maintenance shut-down at the Du Pont works in Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.
PERT (Project Evaluation and Review Technique) was devised in 1958 for the POLARIS missile program by the Program Evaluation Branch of the Special Projects office of the U.S.Navy, helped by the Lockheed Missile Systems division and the Consultant firm of Booz-Allen & Hamilton. The calculations were so arranged so that they could be carried out on the IBM Naval Ordinance Research Computer (NORC) at Dahlgren, Virginia.
1) The document discusses project management tools including network analysis techniques like CPM and PERT.
2) CPM and PERT are used to plan and schedule complex projects using network diagrams that show the logical sequence and relationships of tasks.
3) PERT uses three time estimates for each activity - optimistic, most likely, and pessimistic - to calculate the expected duration using probability.
Introduction 1
Network is a technique used for planning and scheduling of large projects in the fields of construction, maintenance, fabrication, purchasing, computer system instantiation, research and development planning etc. There is multitude of operations research situations that can be modeled and solved as network. Some recent surveys reports that as much as 70% of the real-world mathematical programming problems can be represented by network related models. Network analysis is known by many names _PERT (Programme Evaluation and Review Technique), CPM (Critical Path Method), PEP (Programme Evaluation Procedure), LCES (Least Cost Estimating and Scheduling), SCANS (Scheduling and Control by Automated Network System), etc
This chapter will present three of algorithms.
1. PERT & CPM
2. Shortest- route algorithms
3. Maximum-flow algorithms
The document discusses project management techniques CPM/PERT. It provides examples of 3 different project managers and their roles overseeing construction of a retail complex, clinical trials for a new drug, and introducing new teaching resources at a college. It then defines key characteristics of projects, examples of project types, and an overview of what project management entails. The document proceeds to describe the project management process and techniques used in CPM and PERT including network diagrams, critical path analysis, and probability calculations for assessing project completion time.
This document provides an overview of project management techniques including PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method). It defines key project management terms and explains the steps to create a PERT chart including identifying activities, sequencing activities, estimating activity times, determining critical paths, and updating the chart over time. The document also discusses calculating early start/finish and late start/finish times using forward and backward passes. Overall, it serves as a comprehensive introduction to project scheduling tools PERT and CPM.
This document discusses project management and the Program Evaluation and Review Technique (PERT). It begins with introductions to project management and PERT. PERT is a statistical tool used to analyze tasks in a project and determine the minimum time needed. Key PERT concepts discussed include critical path, float, expected and normal times. The document provides a theoretical example and then applies PERT to an industrial example of assembling a switch board. Key steps of PERT execution are outlined. Questions about project management responsibilities are also addressed.
The document discusses project planning techniques like PERT and CPM. It explains that PERT and CPM help managers plan, schedule, and control complex projects with limited resources. Both techniques use network diagrams to visually represent project activities and their relationships. The key difference is that PERT uses three time estimates for activities and probability to estimate completion times, while CPM uses a single time estimate. The document then provides examples of network diagrams for construction projects and explains how to identify the critical path.
Critical Path Explained With 7 Q&As and a Free Excel TemplateSHAZEBALIKHAN1
The critical path method is the most used project management technique. Learn the CPM with 7 FAQs ranging from definition to method, process, tests. The attached excel sheet (hyperlinked in the article) explains the implementation of CPM in a project schedule.
PERT and CPM are techniques used in project network analysis for planning, management, and control of projects. PERT uses probabilistic time estimates and is used for non-repetitive projects with uncertain timelines, while CPM uses deterministic single estimates and is used for repetitive jobs with past experience to predict times. Both techniques involve modeling the project as a network of activities and events, identifying the critical path of zero slack activities that dictates the minimum project duration.
This document discusses key concepts in project management including:
1) How to construct a project network diagram representing activities and their dependencies.
2) How to determine a project's critical path which indicates its minimum duration.
3) How to calculate activity floats which provide flexibility in scheduling.
This document discusses project time management processes. It covers defining and sequencing activities, estimating activity resources and durations, developing a project schedule using techniques like critical path method, and controlling the schedule. The key processes include decomposing work, determining dependencies between tasks, estimating task durations and resource needs, using tools like network diagrams and Gantt charts to develop a schedule, and monitoring schedule performance to manage changes if needed. Project time management is important because schedule issues are a major cause of project conflicts.
#Project Scheduling - Network Diagrams : PERT & CPM# By SN PanigrahiSN Panigrahi, PMP
Project scheduling involves three key steps: (1) identifying all tasks that need to be completed, (2) determining when each task will be done, and (3) assigning resources to complete each task. This allows a project manager to plan dates, link activities, estimate durations, and set milestones to track a project's progress over time.
This document provides an overview of project management techniques, including definitions, phases, and methods. It discusses:
1. Project management involves planning, scheduling, and controlling interrelated activities using limited resources over a defined time period.
2. Popular techniques include Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT), which use network diagrams and time/resource estimates to identify critical paths and schedules.
3. Project formulation involves feasibility analysis, design, financial analysis, and cost-benefit analysis to evaluate a project idea before implementation.
The document discusses Project Evaluation Review Technique (PERT), a project management tool used to analyze tasks, time required, and critical paths. It describes various project management methodologies like PRINCE2, Agile, and Critical Path Method (CPM) that are suited for different types of projects. Finally, it discusses setting up an organizational structure and quality management process for a project.
The document discusses the Program Evaluation and Review Technique (PERT) which is a management tool used to define and integrate project events. PERT uses optimistic, pessimistic, and most likely time estimates to calculate the expected time for tasks. It is event-oriented and models the logical order and dependencies of activities. Variance and standard deviation are also calculated to measure uncertainty. An example project is provided showing how to determine activity times, critical paths, and the probability of meeting a deadline.
PM 2 is directing a team of research scientists running trials on a new analgesic drug. Their responsibility is to design experiments, follow scientific and legal procedures, and have results analyzed independently.
PM 3 is being sent to New Delhi by an international aid agency to organize introducing multimedia resources at a teachers' college. Their role is complex, ensuring appropriate resources are purchased and developed within the college, and encouraging acceptance by lecturers and students.
PM 1 is in charge of constructing a retail development with 26 units and a supermarket. Their main responsibilities are coordinating contractors to complete the project on specification, within budget and on time.
This document provides an overview of project time management processes including defining and sequencing activities, estimating activity durations, developing the project schedule, and controlling the schedule. Key aspects covered include defining activities and their attributes, using network diagrams like arrow diagramming and precedence diagramming to show dependencies, estimating activity times including three-point estimates and PERT, developing Gantt charts and using critical path method to determine the longest path and amount of slack.
This document discusses production control techniques including network analysis and PERT/CPM. It defines network analysis as a pictorial representation of activities and their relationships that helps with planning, scheduling, and controlling projects. PERT is described as a technique used for planning, scheduling, organizing, coordinating, and controlling uncertain activities, especially for research and development projects. CPM is a statistical technique used for construction project management that helps control costs and time. A critical path is identified as the longest sequence of critical activities in a network from start to finish. Network techniques help translate complex projects into simple activities and allow for detailed future analysis and division of responsibilities.
The document discusses Project Evaluation and Review Technique (PERT), a method for planning, scheduling, and controlling complex projects. PERT was developed in the late 1950s to manage the Polaris missile program. It involves identifying tasks, durations, dependencies and critical paths to determine the minimum time needed to complete the overall project. The summary analyzes how PERT can be used by nurse managers to plan nursing work schedules and allocate resources efficiently to reduce patient costs and hospital stays.
The document discusses three examples of project managers and their responsibilities on different projects:
1) Construction of a retail development with 26 units and a supermarket. Responsible for coordinating contractors to ensure on-time and on-budget completion.
2) Directing trials of a new analgesic drug. Responsible for designing experiments and ensuring proper scientific and legal procedures are followed.
3) Introducing multimedia resources at a teacher training college in New Delhi. Responsible for purchasing and developing resources as well as encouraging acceptance by lecturers and students.
The document discusses a project to move a company's credit card operations from Dallas to Des Moines within a 22 week deadline. It identifies 10 activities in the project including selecting an office site, creating a financial plan, determining personnel needs, and training new employees. It constructs a network diagram to show the precedence relationships between activities and introduces dummy activities to correctly depict relationships. It then estimates optimistic, most likely, and pessimistic times for each activity to find the project's critical path using the Critical Path Method (CPM).
“Application of the Program Evaluation Review and TechniquePantho Sarker
The document provides an overview of the Program Evaluation and Review Technique (PERT). It discusses the origin and history of PERT and how it was developed parallel to the Critical Path Method (CPM). The document outlines the key features of PERT, including that it uses three time estimates (optimistic, pessimistic, most likely) to calculate the expected time to complete each task. The advantages of PERT are also summarized, such as how it can be used to determine the estimated project completion date and flexibility in a project schedule.
A project is defined as a temporary endeavor undertaken to create a unique product or service. Network analysis techniques like the Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are used to plan and schedule complex projects. These methods involve identifying all activities, their durations, and logical relationships to construct a network diagram. The critical path is then determined by calculating the longest path of linked activities from start to finish, which must be carefully managed to ensure on-time project completion.
The document discusses project management techniques like CPM and PERT. It provides 3 examples of projects: 1) construction of a retail complex, 2) clinical trials of a new drug, and 3) introduction of multimedia resources at a teacher's college. It then defines what a project is, noting that it is a unique endeavor with a defined start and end, undertaken to achieve specific objectives within time and resource constraints. The document discusses key aspects of project management like work breakdown structure, network diagrams, critical path method (CPM), and program evaluation and review technique (PERT).
CPM and PERT are network analysis techniques used for project planning and scheduling. CPM was developed in the 1950s by DuPont for chemical plant projects and focuses on minimizing project duration. PERT was developed by the US Navy for the Polaris missile program and handles uncertain activity times using probability. Both techniques represent activities as nodes and their dependencies as arrows to build a network that identifies the critical path showing the shortest time to complete the project.
The document provides information about estimating project costs, including:
1. It discusses key principles of project cost estimating such as integrity, using the best information, accounting for risks and uncertainties, using an expert estimating team, and validating estimates.
2. It describes types of project costs as variable vs fixed costs and direct vs indirect costs. It also discusses opportunity costs.
3. It explains that cost estimates show the monetary and time resources needed to complete a project, and outlines the typical components of a cost estimate spreadsheet.
4. It outlines the key steps in a project cost estimation process, including breaking work into tasks, evaluating tasks, and estimating resources needed based on task complexity and size. It provides an
46R-11 Skills & Knowledge of Cost Estimators.pdfssuserad21d8
This document outlines the skills and knowledge required of project cost estimators. It discusses the cost estimating process, which includes planning the estimate, quantifying scope, applying costs, pricing the project, reviewing and validating the estimate. It also provides a competency model that structures the required skills and knowledge into areas like general concepts, estimating processes and practices, and other functional skills related to cost estimating. Project cost estimators are responsible for predicting all costs to complete a project given a defined scope. The skills required vary depending on whether one is estimating for an owner, engineering consultant, or construction contractor.
Critical Path Explained With 7 Q&As and a Free Excel TemplateSHAZEBALIKHAN1
The critical path method is the most used project management technique. Learn the CPM with 7 FAQs ranging from definition to method, process, tests. The attached excel sheet (hyperlinked in the article) explains the implementation of CPM in a project schedule.
PERT and CPM are techniques used in project network analysis for planning, management, and control of projects. PERT uses probabilistic time estimates and is used for non-repetitive projects with uncertain timelines, while CPM uses deterministic single estimates and is used for repetitive jobs with past experience to predict times. Both techniques involve modeling the project as a network of activities and events, identifying the critical path of zero slack activities that dictates the minimum project duration.
This document discusses key concepts in project management including:
1) How to construct a project network diagram representing activities and their dependencies.
2) How to determine a project's critical path which indicates its minimum duration.
3) How to calculate activity floats which provide flexibility in scheduling.
This document discusses project time management processes. It covers defining and sequencing activities, estimating activity resources and durations, developing a project schedule using techniques like critical path method, and controlling the schedule. The key processes include decomposing work, determining dependencies between tasks, estimating task durations and resource needs, using tools like network diagrams and Gantt charts to develop a schedule, and monitoring schedule performance to manage changes if needed. Project time management is important because schedule issues are a major cause of project conflicts.
#Project Scheduling - Network Diagrams : PERT & CPM# By SN PanigrahiSN Panigrahi, PMP
Project scheduling involves three key steps: (1) identifying all tasks that need to be completed, (2) determining when each task will be done, and (3) assigning resources to complete each task. This allows a project manager to plan dates, link activities, estimate durations, and set milestones to track a project's progress over time.
This document provides an overview of project management techniques, including definitions, phases, and methods. It discusses:
1. Project management involves planning, scheduling, and controlling interrelated activities using limited resources over a defined time period.
2. Popular techniques include Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT), which use network diagrams and time/resource estimates to identify critical paths and schedules.
3. Project formulation involves feasibility analysis, design, financial analysis, and cost-benefit analysis to evaluate a project idea before implementation.
The document discusses Project Evaluation Review Technique (PERT), a project management tool used to analyze tasks, time required, and critical paths. It describes various project management methodologies like PRINCE2, Agile, and Critical Path Method (CPM) that are suited for different types of projects. Finally, it discusses setting up an organizational structure and quality management process for a project.
The document discusses the Program Evaluation and Review Technique (PERT) which is a management tool used to define and integrate project events. PERT uses optimistic, pessimistic, and most likely time estimates to calculate the expected time for tasks. It is event-oriented and models the logical order and dependencies of activities. Variance and standard deviation are also calculated to measure uncertainty. An example project is provided showing how to determine activity times, critical paths, and the probability of meeting a deadline.
PM 2 is directing a team of research scientists running trials on a new analgesic drug. Their responsibility is to design experiments, follow scientific and legal procedures, and have results analyzed independently.
PM 3 is being sent to New Delhi by an international aid agency to organize introducing multimedia resources at a teachers' college. Their role is complex, ensuring appropriate resources are purchased and developed within the college, and encouraging acceptance by lecturers and students.
PM 1 is in charge of constructing a retail development with 26 units and a supermarket. Their main responsibilities are coordinating contractors to complete the project on specification, within budget and on time.
This document provides an overview of project time management processes including defining and sequencing activities, estimating activity durations, developing the project schedule, and controlling the schedule. Key aspects covered include defining activities and their attributes, using network diagrams like arrow diagramming and precedence diagramming to show dependencies, estimating activity times including three-point estimates and PERT, developing Gantt charts and using critical path method to determine the longest path and amount of slack.
This document discusses production control techniques including network analysis and PERT/CPM. It defines network analysis as a pictorial representation of activities and their relationships that helps with planning, scheduling, and controlling projects. PERT is described as a technique used for planning, scheduling, organizing, coordinating, and controlling uncertain activities, especially for research and development projects. CPM is a statistical technique used for construction project management that helps control costs and time. A critical path is identified as the longest sequence of critical activities in a network from start to finish. Network techniques help translate complex projects into simple activities and allow for detailed future analysis and division of responsibilities.
The document discusses Project Evaluation and Review Technique (PERT), a method for planning, scheduling, and controlling complex projects. PERT was developed in the late 1950s to manage the Polaris missile program. It involves identifying tasks, durations, dependencies and critical paths to determine the minimum time needed to complete the overall project. The summary analyzes how PERT can be used by nurse managers to plan nursing work schedules and allocate resources efficiently to reduce patient costs and hospital stays.
The document discusses three examples of project managers and their responsibilities on different projects:
1) Construction of a retail development with 26 units and a supermarket. Responsible for coordinating contractors to ensure on-time and on-budget completion.
2) Directing trials of a new analgesic drug. Responsible for designing experiments and ensuring proper scientific and legal procedures are followed.
3) Introducing multimedia resources at a teacher training college in New Delhi. Responsible for purchasing and developing resources as well as encouraging acceptance by lecturers and students.
The document discusses a project to move a company's credit card operations from Dallas to Des Moines within a 22 week deadline. It identifies 10 activities in the project including selecting an office site, creating a financial plan, determining personnel needs, and training new employees. It constructs a network diagram to show the precedence relationships between activities and introduces dummy activities to correctly depict relationships. It then estimates optimistic, most likely, and pessimistic times for each activity to find the project's critical path using the Critical Path Method (CPM).
“Application of the Program Evaluation Review and TechniquePantho Sarker
The document provides an overview of the Program Evaluation and Review Technique (PERT). It discusses the origin and history of PERT and how it was developed parallel to the Critical Path Method (CPM). The document outlines the key features of PERT, including that it uses three time estimates (optimistic, pessimistic, most likely) to calculate the expected time to complete each task. The advantages of PERT are also summarized, such as how it can be used to determine the estimated project completion date and flexibility in a project schedule.
A project is defined as a temporary endeavor undertaken to create a unique product or service. Network analysis techniques like the Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are used to plan and schedule complex projects. These methods involve identifying all activities, their durations, and logical relationships to construct a network diagram. The critical path is then determined by calculating the longest path of linked activities from start to finish, which must be carefully managed to ensure on-time project completion.
The document discusses project management techniques like CPM and PERT. It provides 3 examples of projects: 1) construction of a retail complex, 2) clinical trials of a new drug, and 3) introduction of multimedia resources at a teacher's college. It then defines what a project is, noting that it is a unique endeavor with a defined start and end, undertaken to achieve specific objectives within time and resource constraints. The document discusses key aspects of project management like work breakdown structure, network diagrams, critical path method (CPM), and program evaluation and review technique (PERT).
CPM and PERT are network analysis techniques used for project planning and scheduling. CPM was developed in the 1950s by DuPont for chemical plant projects and focuses on minimizing project duration. PERT was developed by the US Navy for the Polaris missile program and handles uncertain activity times using probability. Both techniques represent activities as nodes and their dependencies as arrows to build a network that identifies the critical path showing the shortest time to complete the project.
The document provides information about estimating project costs, including:
1. It discusses key principles of project cost estimating such as integrity, using the best information, accounting for risks and uncertainties, using an expert estimating team, and validating estimates.
2. It describes types of project costs as variable vs fixed costs and direct vs indirect costs. It also discusses opportunity costs.
3. It explains that cost estimates show the monetary and time resources needed to complete a project, and outlines the typical components of a cost estimate spreadsheet.
4. It outlines the key steps in a project cost estimation process, including breaking work into tasks, evaluating tasks, and estimating resources needed based on task complexity and size. It provides an
46R-11 Skills & Knowledge of Cost Estimators.pdfssuserad21d8
This document outlines the skills and knowledge required of project cost estimators. It discusses the cost estimating process, which includes planning the estimate, quantifying scope, applying costs, pricing the project, reviewing and validating the estimate. It also provides a competency model that structures the required skills and knowledge into areas like general concepts, estimating processes and practices, and other functional skills related to cost estimating. Project cost estimators are responsible for predicting all costs to complete a project given a defined scope. The skills required vary depending on whether one is estimating for an owner, engineering consultant, or construction contractor.
Cost Estimation method in engineering economicsSuman922623
Cost estimation is a critical process in project management that impacts project success. There are various methods for cost estimation, from traditional approaches using historical data and expert judgment to parametric models that use mathematical formulas based on project parameters and variables. Accurate cost estimation requires clearly defining project requirements, involving domain experts, accounting for potential risks and uncertainties, and regularly reviewing and updating estimates as the project progresses.
This document provides guidance for developing cost estimates for WSDOT projects. It outlines WSDOT's cost estimating process, which involves determining the basis of the estimate, preparing a baseline estimate, reviewing the estimate, performing a risk assessment, determining how to communicate the estimate, and obtaining management endorsement. The document provides definitions of key terms and describes cost estimating methodology and how estimating is conducted during different project phases from planning through PS&E. It also addresses training, documentation, data, specialty estimating areas, and reviews. The overall aim is to promote reliable and accurate cost estimating that supports responsible fiscal management and effective project delivery.
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within its approved budget. A cost management plan establishes how project costs will be planned, structured, estimated, budgeted, and controlled. Cost estimates are developed by analyzing the resources needed to complete project activities using techniques like analogous estimating, parametric estimating, bottom-up estimating, and three-point estimating. Estimates are based on the project scope, schedule, risks, and other factors and are expressed in currency or other measurable units.
The document outlines the purpose and process of a feasibility study. A feasibility study is conducted after a master plan to determine the most cost-effective strategy for developing facilities to deliver health services. It confirms the need for capital projects, evaluates development options against criteria, and provides a cost estimate and implementation plan. The study assesses the viability of projects financially and recommends a course of action. It analyzes service requirements, develops space plans, reviews sites, and identifies procurement options.
PUBLIC PRIVATE PARTNERSHIP MANAGEMENT-Module.pptxkipkorirkoech5
This document provides an overview of project appraisal and risk management for public-private partnerships (PPPs). It discusses the importance of the framework guiding PPP projects from identification through the project lifecycle. Key aspects of project appraisal covered include screening projects for PPP suitability, economic viability analysis, cost-benefit analysis, and risk assessment. The stages of the PPP process and differences between PPP and traditional procurement are also summarized.
ost-benefit analysis provides an organizational framework for identifying, quantifying, and comparing the costs and benefits (measured in dollars) of a proposed policy action. The final decision is informed (though not necessarily determined) by a comparison of the total costs and benefits.
W4N1 Cost Management OverviewCost management is a critical comp.docxcelenarouzie
W4N1: Cost Management Overview
Cost management is a critical component of any project. It is very rare that there is no concern over what a project will cost!
Reliable cost estimates are required for responsible fiscal management at each stage of a project. Unreliable estimates and resulting budgets typically cause significant problems within an organization -- particularly for large enterprise projects. Cost management is closely related to time management because when projects overrun schedule there are typically cost overruns as well.
There are varying degrees of budgetary estimates at different stages of a project. At each stage, cost estimates must be accurate, transparent and reliable to the degree possible at that particular stage. Budgetary estimates (before the project is approved) will be high level, but should be based on a high level understanding of scope and approach. By the time that project budgets are established just prior to execution, much more detail is known and the estimates can be provided with more clarity. The degree of uncertainty should be defined with each estimate. Management needs the best information available on which to base decisions about the project. The degree of estimation detail and the basis of the estimates improves over time.
Cost estimates are not static -- estimating costs is not an exact science and actual costs must be regularly reviewed and tracked to budgetary estimates. The estimates do, however, set expectations and affect management decisions. A successful project manager is expected to establish a budget for a project and then manage the project to that budget. Any changes in the overall cost to complete a project must be discussed with management and key project stakeholders. If an initial budgetary estimate made during project initiation is extremely different from the budget planned for project execution (or worse from what it actually takes to complete the project in the late stages), management must rethink whether or not the project should proceed.
W4N2: Cost Estimating
There are various methods for estimating project costs. Sometimes historical data is available to support cost estimates, sometimes teams define the cost estimate in a “bottom up” manner by estimating what it will cost to perform each project work activity and then summing up the activities for the project, and for some specialty areas there may be industry or corporate formulas or guidelines that can help guide estimates. Various tools, from cost models, to project management systems, to complex excel spreadsheets typically support the development of cost estimates.
Based on the activity resource and duration estimates, the cost estimates define the cost of completing the work of the project. Cost estimates include labor, materials, services, equipment and any other direct costs for performing project activities. There are many factors that should be considered when preparing cost estimates, incl.
This document discusses best practices for construction cost estimating and project management. It emphasizes the importance of collaboration among all stakeholders in developing detailed, line-item cost estimates. It also outlines various types of cost estimates, cost categories, and techniques for ongoing cost control such as earned value management. Key principles include transparency, independent cost research, and updating estimates over time based on changes to requirements or conditions.
This document outlines the methodology for project appraisal. It discusses how appraisal involves carefully reviewing project data, assumptions, plans, costs, financing, organization, and viability. It also examines projects from technical, financial, economic, institutional, and social perspectives. The goal of appraisal is to determine if a project is sound and justified from both an individual and economy-wide viewpoint. It describes how different sections analyze technical, financial, economic, and social aspects of a project. Finally, it discusses techniques for appraisal such as discounted and undiscounted cash flows, as well as the importance of considering incremental costs and benefits compared to a base case without the project.
The main aim of this research study was to investigate the causes of illegal migrationn and its impacts in the
returnees who are living in Woliso town. To achieve these objectives, qualitative methods and Semi-structured in
depth interviews were held with a total of 25 women participants. Descriptive phenomenology was the approach
employed for conducting this study. The purposive sampling technique was used to select 25 returnees of illegal
emigrant f The Primary information was collected mainly from the migrants, Labour
and Social affairs office. Phenomenological method of analysis for study was used to analyze the data obtained
from the participants. The findings of the study revealed that there are a variety of contributory factors that led to
the emergence of migrant women from Ethiopia to Middle East countries. The result showed that the major factors
contributing to the migration and vulnerability of Ethiopian women to illegal emigration are lack of employment,
poverty, lack of prospects, the search for better opportunities and income to support themselves and their families
and economic insecurity as the probable cause of this migration.
This document discusses whole-life costing and cost management for projects. It covers determining the baseline costs, including design, construction, land, running and maintenance costs. It emphasizes the importance of considering all whole-life costs from inception to disposal. Cost management techniques are outlined, including value engineering, benchmarking, and managing the project budget and risk allowance through the project lifecycle.
The document provides guidance on project formulation and feasibility reports. It discusses the stages of project formulation including conception, analysis of related aspects, formulation, and design. It outlines the sequential stages of project formulation including feasibility analysis, techno-economic analysis, project design, input analysis, financial analysis, cost-benefit analysis, and pre-investment analysis. The document also discusses the meaning, scope, contents and significance of feasibility reports and provides Planning Commission guidelines for preparing feasibility reports.
The document discusses various cost components involved in civil engineering projects including:
- Professional engineering costs such as surveys, studies, and designs during planning phases.
- Construction costs which include materials, labor, equipment, and management during building.
- Legal and land acquisition costs associated with purchasing property.
- Owner's costs like administration, staffing, financing, and overhead.
- Contingency allowances to account for unknown factors and reduce risks.
Common practice is to start with a 20%+ contingency early on, reducing to 10% after design and 5% after bidding. Larger projects may require higher contingencies.
This document discusses various tools and techniques used in project feasibility studies, decision making, and investment analysis. It provides information on:
1) Feasibility studies, which are undertaken early in a project to analyze technical, financial, legal, and risk factors. Cost-benefit analysis tools like net present value and internal rate of return are used to evaluate project feasibility.
2) Project appraisal involves evaluating feasibility studies to determine a project's likelihood of success based on social, technical, economic, financial, and environmental considerations.
3) Decision making in project management requires choosing between options using tools like decision trees, matrices, SWOT analysis, and voting. Cost-benefit analysis compares costs and benefits to aid decision
The document discusses various aspects of project appraisal, including market appraisal, technical appraisal, financial appraisal, and economic appraisal. It provides details on steps involved in market and demand analysis, sources of secondary information for feasibility studies, and how to determine a project rating index. Key aspects covered include analyzing aggregate future demand, competition, and pricing options for market appraisal, and evaluating costs, profitability, and risk for financial appraisal.
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within budget. Cost estimating develops cost approximations for project activities using techniques like analogous, bottom-up, and parametric estimating. Cost budgeting aggregates activity cost estimates and establishes a cost baseline. Cost control influences factors creating cost variances and controls changes to the budget.
Project cost management includes planning, estimating, budgeting, and controlling costs to complete a project within budget. Cost estimating develops cost approximations for project activities using techniques like analogous, bottom-up, and parametric estimating. Cost budgeting aggregates activity cost estimates and establishes a cost baseline. Cost control influences factors creating cost variances and controls changes to the budget.
Similar to Economics of project evaluation cpm module2 (20)
Most construction sites that run into trouble do so for reasons related to managerial factors rather than because of technical problems. The site-based management can make significant improvements in the cost and time savings during the construction process without involving a mass of additional work. The role of site managers is to control and maintain work performance and then taking actions to rectify situations where performance is unsatisfactory.
Concepts and Formulas of Construction Site Layout Planning Elements:
A well-planned site including all temporary facilities and utilities lead to: 1) increasing productivity and safety, 2) reducing area(s) needed for temporary construction, and 3) maximizing utilization. The following points should be considered in good site layout
Site layout planning can affect productivity and is crucial to project success. However, as construction is heterogeneous in the nature of its organizations, project designs, time constraints, environmental effects, etc., site layout planning for each project becomes unique. Affected by many uncertainties variables! And variations, site layout planning is a typical multi objective problem.
Problem solving requires representing the problem in a language that problem solvers can understand. However, solutions of most construction problems rely on empirical Knowledge about the site layout that can be as a site space allocation for material storage, working areas, units of accommodation, plant positions, general circulation areas, and also access and egress for deliveries and emergency services. Furthermore, conflicting objectives and the uniqueness of construction projects like bad site layout make the problems difficult to conceptualize and define.
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Economics of project evaluation cpm module2
1. DEPARTMENT OF CIVIL ENGINEERING
B TECH 8th
SEMESTER
01 1827 CONSTRUCTION PLANNING AND MANAGEMENT
L-T-P : 3-0-0 Credit : 3
Module 2: Value Analysis, Feasibility studies; Economics of project evaluation: Finance, material
and manpower development.
Total number of Lecture: 8
Introduction: The competencies required for developing business cases
comprise a range of skills, including those for:
facilitation and negotiation
demand management
risk management
value management
economic, social, environmental and budget analyses, and
strategic planning.
Project evaluation
Evaluation of building project proposals is a key element of a department's
financial and service delivery planning and in the formulation of capital works
programs. Building projects are initiated where strategies selected through
strategic planning involve building requirements. Planning for assets at this
strategic level involves establishing what assets are required to support service
and output strategies identified in a department's corporate plan and service
delivery strategies. These are compared to existing available assets. Strategies
are developed for acquisition of new building assets and reconfiguration, use,
refurbishment and disposal of existing assets. This process includes
consideration of recurrent cost implications of capital investment.
Asset strategies developed through this process and incorporated in a
department's capital investment strategic plan form the basis from which options
are further developed and evaluated and capital investment programs
formulated. These activities are undertaken as part of the project development,
which includes the project evaluation and program formulation phases in the
capital works management process.
Asset strategic planning, project evaluation and the State Budget process are
key elements in determining building requirements and those building proposals
that provide the best value for money and that can and should progress to
funding approval in the program formulation phase.
2. The project evaluation phase incorporates the project feasibility and business
case stages and provides a structured approach for undertaking project
feasibility studies to establish preferred options and, where required, develop a
business case that supports service delivery through asset strategies. When asset
strategies include building elements, the business case should establish: a
preferred building solution that meets service delivery needs; the basis for
funding application and inclusion in capital works programs; and the basis for
building performance review in the project review phase of the capital works
management process.
Project feasibility
Project feasibility involves:
defining the objectives and scope of individual projects;
identifying and selecting suitable options;
carrying out project analyses; and
selecting preferred options.
Project feasibility involves the comparative evaluation of ‘build' and ‘non-build'
scenarios relating to the project and should be undertaken in accordance with
the process. It revisits the asset strategic planning process with input to a
department's capital investment strategic plan, but at a project level.
Defining the objectives and scope of projects
The purpose of the project must be defined in terms of the benefits the project
will provide. These can be expressed as ‘outcomes' (e.g. increased provision of
government services to the region) and as an ‘output' (e.g. build a new facility).
These outcomes and outputs should be drawn from the department's corporate
and capital investment strategic planning processes, which establish linkages
with government priorities and regional strategies. Any project proposal should
include specific information on the functional requirements and how it will
contribute to the department's service delivery strategy.
Identifying and selecting suitable options
Departments should pursue innovative solutions when formulating options for
building projects and should consider option strategies, such as joint ventures,
non-building solutions, outsourcing and private sector involvement. Options
should include suitable options identified through the asset strategic planning
process (e.g. gap analysis may identify potential to meet building requirements
through refurbishment or upgrading of existing buildings). They should always
include the option to take no action.
Building project options may include:
new building construction;
3. extensions to existing buildings;
major refurbishment (or upgrading) of buildings;
reconfiguration of existing buildings;
acquisition of buildings;
leasing of building space; or
site acquisition for building purposes.
Project options should, where appropriate, take into account the disposal of
existing buildings and the decommissioning of leased premises. When a number
of location and site options are available, it will be necessary to include these in
project analyses.
Carrying out project analyses
Following identification and preliminary assessments of all reasonable building,
non-building, location and site options, the most suitable options should be
short listed for detailed analysis. The purpose of detailed project analysis is to
ensure best value for money through economic, environmental, social and
budget analyses of all short listed options. The degree of analysis undertaken
should be tailored to appropriately manage risks associated with individual
projects. In undertaking the analysis, departments should give consideration to
departmental priorities, government policies and legislation.
Economic analysis
Techniques used for economic analysis such as Cost/Benefit Analysis and
Cost/Effectiveness Analysis. For building projects, the net economic benefits of
each option are assessed by calculating the Net Present Value (NPV) using the
Cost/Benefit Analysis technique. Cost/Effectiveness Analysis is appropriate for
projects with strong community or social welfare objectives that may be
difficult to value and should only be used when the project and the benefits are
of reasonable significance. NPV is today's value of all future cash inflows and
outflows of a project option. The NPV is the difference between the streams of
costs and benefits of an option, both discounted to a present value by the
application of a discount rate. Discounting takes into account the time value of
money so that options with different cash flows can be compared.
Analysis of the cost of service delivery associated with an option should
consider total asset management and service delivery costs. This will involve
analyses of life cycle costs including capital, recurrent and disposal costs. In
some cases, such as the delivery of health services, the recurrent costs
associated with projects can exceed the capital investment after a relatively
short period of use. The NPV is a key decision criterion used to rank project
options. All other considerations being equal, the project option with the highest
NPV represents the option with the greatest economic benefit. In these cases,
4. social benefits and other qualitative issues may be important considerations. As
there will always be some degree of uncertainty surrounding the outcome of an
evaluation, the projected outcomes should be tested under different scenarios.
This may be undertaken by determining realistic ranges (i.e. worst to best) for
all key variables. NPV calculations are performed using different combinations
of worst and best case scenarios. These analyses can identify minimum sets of
changes in key assumptions that would alter the ranking of project options.
Techniques include sensitivity analysis, risk analysis and scenario planning.
Sensitivity analysis is used to determine the sensitivity of the NPV to changes in
key project variables. This process enables the identification of variables that
are critical to the robustness of the estimated values. Sensitivity analyses should
be undertaken to establish:
sensitivity of the options' NPVs to changes in the discount rate; and
sensitivity of the options' NPVs to changes in at least one key project
variable.
Risk analysis can be used where there are a limited number of key variables.
Major assumptions made in the analysis will assist in identifying risks
associated with the options. For capital building projects, risks may be
associated with the following areas:
benefits - the areas of exposure or major assumptions associated with the
estimated benefits;
time, cost and quality - the major factors in selecting either a traditional or a
non-traditional form of project delivery to manage the project specific risks.
Risks may be associated with reliability of cost estimates (including potential
cost exposures) or with management of particularly large projects, and
social and environmental impacts - assumptions made in estimating the
social and environmental impact of options. Risks may be associated, for
example, with particular local requirements for disaster mitigation strategies,
including preventative measures to safeguard or minimize impact on or of all
new building projects.
Scenario planning may also be used to assess risk associated with project
options if there is a number of assumptions and variables used in the
analysis. Clear statements of assumptions made in analyses and the reasons
for making such assumptions must be given so that decision-makers are fully
informed. For example, if analysis of an option for construction of office
accommodation is undertaken on the assumption that office rents will
increase at more than the rate of inflation, the assumption could be justified
by evidence of market trends including the projected returns and demand for
office space in the particular area. Where necessary, independent expert
assessments should be obtained in order to develop and justify the costs and
demand estimates.
Environmental analysis
5. As well as its general benefits and its financial and economic performance, a
project should also be assessed as to whether it might have any negative impact
on the environment.
The negative environmental impact of a project normally relates to the
development of the market site itself. If this not undertaken properly and in
conformity with an agreed master plan the development could: increase traffic
congestion in the vicinity of the market site, particularly if the site entry is
poorly located;
cause flooding to adjacent land, because of increased surface water run-off, a
restricted site outlet or lack of on-site storage; and
produce glare and noise impact on adjacent land uses if insulation, screening
and planting proposals are not carefully integrated into the development
programme.
Social analysis
Budget analysis
This analysis should identify outlays and revenues over the forward estimates
period for all resource strategies (i.e. human resource, information technology
and asset strategies) and include capital and recurrent outlays, revenues and the
funding source for each project option. The effects each option has on the State
Budget should also be identified, and include consideration of the impact on the
department's capital and recurrent budgets. The impact on other organisations
(such as the impact of any inter-departmental charges) should also be included.
Selecting the preferred option
The short-listed options should be ranked according to the NPV when the
Cost/Benefit Analysis technique has been used. For Cost/Effectiveness
Analysis, the NPV of costs should be used to determine the lowest cost option.
Where the impacts of environmental, social and budget analysis have not been
factored into the economic evaluation, the ranking of options established by the
economic analysis should be adjusted based on a synthesis of these analyses.
This may be undertaken by assessing costs associated with the major
environmental, social and budget impacts to adjust the NPVs to reflect
departmental and Government priorities.
The preferred option, which is the outcome of the project feasibility stage,
contributes to the formulation of capital investment plans and capital works
programs.
Business case
6. The business case stage involves documentation of the analyses undertaken in
the project feasibility stage. Where required for building projects,
documentation of a business case is undertaken when the project analysis has
arrived at a preferred option that incorporates building elements.
In these cases, the functional requirements justified by the project feasibility and
documented in the business case will form the basis of project delivery and
assist in keeping building projects focused on service delivery outcomes.
A generic outline for business cases
The following generic table of contents has been developed to provide guidance
on the content and requirements for business cases. Departments may choose to
adopt this structure for documentation of business cases.
Table of contents
Executive summary
1 Project background
2 Objectives and scope of project
3 Project options
4 Project analysis
5 Preferred option
6 Recommendations
Attachments
Executive summary
An executive summary should provide an outline of the capital investment
proposal and, consistent with the requirements for project evaluation reports and
it should state:
whether the project advances government priorities and contributes to
outcomes established through the department's strategic plan;
if the project forms part of an interdepartmental strategy (such as for co-
location of facilities);
the impact the project will have on service delivery and departmental
outcomes;
how the project contributes to outputs and increased productivity;
what budgetary impact and economic return the project will produce;
whether options other than the government as owner and operator have been
considered; and
how the project is to be funded.
Project background
The project background should document:
7. earlier planning for service delivery through corporate planning and
development of service delivery and resource strategies, and in particular,
identified needs for capital building elements incorporated in asset strategies;
any earlier activities relating to project development; and
an explanation of the process and analyses undertaken in developing the
business case.
The emphasis, here, should be on the major benefits of the project, including the
impact it will have on service delivery outcomes.
Objectives and scope of project
Based on the results of the project feasibility stage of project development, the
purpose of the project must be defined in terms of the benefits the project will
provide. The main issues to be documented relate to:
current and projected demand for services;
identification of functional requirements of the building project proposal;
and
the functional relationship with other infrastructure segments.
Project options
Project options identified and selected in the project feasibility stage should be
documented. The concept of each option including details of joint ventures,
outsourcing and private sector involvement as well as details of the take no
action scenario and both building and nonbuilding solutions should be outlined.
Particular information to be included should relate to:
meeting functional and service delivery requirements, such as location and
details of space and floor area provisions;
capital costs including land acquisition, design and construction costs,
furniture and equipment costs, fees and charges, relocation and
commissioning costs and allowances for contingencies;
recurrent costs including operating costs (for the asset, human resources and
information technology) and maintenance costs;
associated financial strategies including funding of capital and recurrent
costs; and
site and other project implications.
Project analysis
This section should summarise the analysis of the building and non-building
options undertaken in the project feasibility stage. It should present findings of
analyses undertaken in the project feasibility stage, including:
the economic analysis presenting a comparison of the net benefits of each
option and the associated sensitivity and risk analyses;
8. the environmental analysis outlining all environmental consequences and the
short-term and long-term environmental effects and mitigation strategies
relating to each option;
the social analysis outlining significant social issues, impacts, costs or
opportunities associated with each option as well as their impact and
proposed strategies;
the budget analysis outlining the outlays and revenues for each option over
the forward estimates period and documenting the impact of each option on
the State Budget and other organisations; and
the synthesis of the above analyses including results of application of
performance criteria reflecting departmental and government priorities.
Preferred option
A summary of the preferred option should be presented along with a statement
outlining the reasons for selecting this option. Where the preferred option
includes a building solution, the summary should describe the concept including
details of any joint ventures, outsourcing and private sector involvement.
Particular information to be summarised should relate to:
location and details of the building concept, including space and floor area
provisions;
capital costs including land acquisition, design and construction costs,
furniture and equipment costs, fees and charges, relocation and
commissioning costs, and allowances for contingencies;
recurrent costs including operating costs (for the asset, human resources and
information technology) and maintenance costs;
associated financial strategies including funding of capital and recurrent
costs as well as cash flows for each financial year over the three year
forward estimates period (and subsequent years as appropriate);
site and other project implications; and
a procurement strategy including delivery and programming aspects.
Recommendations
The recommendations should be introduced by referring to the preferred option,
the reasons for selecting this option and the impact should the project not
proceed. This section should then provide specific recommendations relating to
adoption of the preferred option and make further recommendations as
appropriate to progress the project. Particular recommendations may relate to:
any site designation or approval processes;
further considerations required by government committees, such as the
Cabinet Budget Review Committee; and
Cabinet submissions required such as when the proposal provides for private
sector participation.
Attachments
9. The extent of information required to support the project will depend on the
level of analysis undertaken and, where appropriate, may be attached to the
business case.