MAT/543 MAT543 MAT 543 WEEK 8 Homework

MAT 543 WEEK  8 Homework

Week 8 Homework

• Homework
• Chapter 12: Exercises 12-1 through 12-3 (page 248 of the text)
• Chapter 13: Exercises 13-1 through 13-3 (page 269 of the text)

Chapter 12 Program Evaluation Review Technique: PERT

LEARNING OBJECTIVES

    1. To define the scope and tools of project management.

    2. Understanding the components of PERT analysis.

    3. To understand how to use PERT for project management.

REAL WORLD SCENARIO

As the administrator of the Sunrise Care Center, a long-term care facility, Michael Sharp is preparing to add on a new assisted living wing. The wing will be built as an addition to the existing facility. There are many steps involved with building the addition, and care must be taken to fully prepare for all of them. Further, timing is vitally important, as units have already been sold to prospective patients. If the project takes longer than anticipated, there are financial implications. Mr. Sharp also needs to be aware of disruptions to ongoing care being provided in the facility. A project of this scope requires that each step be mapped out in detail and estimates be developed for completion time for each. Mr. Sharp has elected to use PERT analysis to manage the project.

This chapter presents Program Evaluation and Review Technique (PERT) and its application as a planning, scheduling, and control system to use with large scale projects. PERT was developed to support complex research and development projects. PERT provides the manager with a method to identify and sequence the many activities that comprise a complex project. It allows the manager an analytic tool to assess impacts when a change to the sequence or timing of required activities is needed. Such changes occur to finish the project by a specific date or as adjustments to changing circumstances once the project has begun.

Here we present single time estimate PERT, although other forms exist. Single time estimates create a “most probable” completion time when assessing proposed tasks. Other methods use multiple time estimates, such as optimistic and pessimistic time ranges. These may be desirable when project tasks are detailed, or when environmental factors could be an issue, such as cold weather or shipping time uncertainty. Here we examine single time estimate PERT to more easily develop the concept.

LEARNING OBJECTIVE 1: TO DEFINE THE SCOPE AND TOOLS OF PROJECT MANAGEMENT

A project is an activity done once. Building a new nursing home or modernizing a part of an existing hospital are examples of projects. Installing a new machine in a laboratory is a project. Developing a new capability, such as installing labor and delivery rooms in a hospital, is also a project. Installing a new computer system or a new computer capability to process patient accounts is a project. A project is a one-time activity intended to change the capabilities or capacity of the organization.

The antonym of a project is a program. A program is a repetitive activity. So while developing and installing a system for mothers to give birth in the same hospital room that they will use for the duration of their maternity stay is a project, using this new capability over and over again for many mothers is a program. Doing surgery in a newly renovated same day surgical suite is a program.

A project has defining attributes. It usually seeks to achieve a desired capability or capacity, and when that capability is achieved the project is, by definition, completed. As such, projects have formal beginning and ending points and do not continue past the point when the desired capability has been achieved.

Projects also evolve through many phases. Any project must move through at least three phases of development. The first is the concept phase. During this phase different ways to achieve the desired capabilities are considered and evaluated. Broadly defined project options are identified. Usually one or two of these conceptual options are taken further by gathering information and examining alternative methods to achieve the capability. Some projects spend hours or days in this phase, whereas others spend years depending on scope.

During the second, or definition phase, managers define exactly what resources are needed to achieve the desired capabilities associated with the specific project option chosen. These resources are defined in as much detail as possible. Usually a business plan or similar type of report is developed. At the completion of this phase, some type of organizational approval is sought to continue the project into its next phase. This approval may be based upon a detailed economic and/or financial analysis. In health care, some projects must also secure regulatory approvals, such as approval granted in the form of a Certificate of Need. If approvals are not received to move the project into the next phase—the project implementation phase—managers are expected to repeat the definition phase using different parameters, return to the concept phase, or are told that the organization no longer desires the capability.

The third phase is the implementation phase. During this phase of project management, resources and capabilities are installed in the organization in keeping with the intent of the overall project. It is during this phase that a project may involve new construction, buying new equipment, training staff, hiring new staff, revising job descriptions, and any other activities needed to implement the desired capability. This phase may also include an evaluation component to ensure the outcomes achieved were those planned, and if not, how the two differ and by how much. PERT is used in all phases of a project.

Projects typically involve altering existing capabilities as well as installing or implementing new capabilities. For example, expanding the capacity of a nursing home by 20% will require more rooms, beds, and staff to administer to the needs of additional residents. However, such a project may also require altering the nursing home’s existing capacity to park cars (e.g., more visitors and staff), process laundry (e.g., increased amount), feed patients and staff (e.g., more meals), and store heating oil.

As a project manager, you will have total system (or subsystem) performance responsibility (TSPR). TSPR characterizes all project management activities. As the project manager, you will be expected to install the “total package” of capabilities necessary to complete the project. Installing a new computer system that exceeds the capability of existing electrical circuits violates TSPR. Installing the equipment to do laser surgery without training the operating room staff to use the equipment violates TSPR. Consider the following example: An organization that specializes in eye and ear sub specialties contracts to provide those services to another major hospital’s emergency department. A cart containing all of the necessary equipment is installed in that hospital’s ED with the appropriate security measures (locks, etc…) and the key locations are known by all staff who would need access to the cart. Upon first use, the cart is wheeled to the hospital’s sanitation room for sterilizing which is required after each use. There it is found that the existing sterilization service volume does not accommodate a new cart and because the cart originates from an outside facility, the staff are even more reluctant to attempt to rework the schedule. In this instance the manager with project responsibility at the eye and ear facility violated TSPR by failing to consider the need for sterilization of the cart. As a result, the cart had to be transported back to the eye and ear facility after each use, which carried added cost and potential quality issues if during that time, other patients were in need of the cart. Having total system performance responsibility means defining the project to include all the capabilities needed to fully complete the project, which in turn also entails the effective integration of the project into existing work flows and capacity of the organization, or in the above example, the contracted organization.

Some projects are complex, involving many action steps, significant resources, and a number of people. However, the definition of complex is often situational. What may be complex to one organization may not be to another. Complex can also refer to the duration of a project. A project that will require 2 years to complete may be complex; a project that takes 1 day may not be considered complex.

Formal project management methods, such as PERT, are reserved for complex projects. Often these projects have significant financial implications created by the expenses associated with installing the new capability as well as the expense (e.g., lost revenue) associated with any delay in achieving the capability. Using PERT to meet the deadline to submit a Certificate of Need application may be justified by the implications associated with being late or unprepared.

Generally project activities are performed in a predetermined sequence. Some steps must occur before others can begin. For example, the framing of an addition must be complete before electrical work can begin. Further, some sequences are more efficient than others. In other instances, the timing of activities is also very important. For a project that requires a significant amount of time, it may be inappropriate to train staff as an initial step. Training needs may change over the course of the project. Some trained staff may leave before the project comes on-line. Staff may forget their training given the long gap between when training occurred and when they begin to use the skills acquired. Similarly it would be inappropriate to hire new staff for an expanded nursing home months before the staff was actually needed. PERT assists managers in identifying and sequencing all the activities that must be completed to complete the project.

Consider the project to expand a nursing home by 20%. The initial list of the needed activities or steps could include the following:

    1. Get Certificate of Need (CON) approval.

    2. Get zoning approval.

    3. Hire an architect and approve plans.

    4. Get the necessary construction financing.

    5. Hire a construction company.

    6. Build it.

    7. Advertise for staff.

    8. Interview staff.

    9. Select staff and train.

    10. Revise existing insurance policies.

    11. Change the operating budget to reflect the project.

    12. Determine the necessary new equipment, issue bids, and select the equipment.

    13. Get the equipment delivered, unpack it, and set it up. Test equipment and secure replacements for any defective equipment.

When the steps necessary to implement project capabilities are defined, they should be listed in sequential order to the extent possible. For example, for this project we would seek CON approval before obtaining construction financing, etc. However, although some activities must be accomplished in a sequential order, other activities can be accomplished simultaneously or in parallel with others. Accomplishing activities in parallel can shorten the total time between when a project is begun and when it is completed. By authorizing and managing activities to proceed in parallel, projects can become more efficient, but also more difficult to manage and coordinate. PERT facilitates managing parallel activities, especially when the order of activities influences the overall time a project will take.

The Work Breakdown Structure

Before using PERT, any complex project must be first broken down into its component parts. Each piece of the project must be identified. A Work Breakdown Structure (WBS) is used to divide the project into appropriate and logical components and then subdivide each component of the project into even more specific parts. The WBS is a comprehensive listing of the components of the project listed in outline form. Some use a numbering system to ensure that macro as well as micro components of the project are identified and ordered. For example, the project to increase the capacity of the nursing home by 20% could be broken down into the following work breakdown structure: