Handstar Inc Case Study

1 The World of Project Management 1

1.1 What Is a Project? 1

Trends in Project Management 3

1.2 Project Management vs. General Management 4

Major Differences 4

Negotiation 5

1.3 What Is Managed? The Three Goals of a Project 7

1.4 The Life Cycles of Projects 10

1.5 Selecting Projects to Meet Organizational Objectives 11

Nonnumeric Selection Methods 12

Numeric Selection Methods 13

1.6 The Project Portfolio Process 22

Step 1: Establish a Project Council 23

Step 2: Identify Project Categories and Criteria 23

Step 3: Collect Project Data 25

Step 4: Assess Resource Availability 25

Step 5: Reduce the Project and Criteria Set 25

Step 6: Prioritize the Projects within Categories 26

Step 7: Select the Projects to Be Funded and Held in Reserve 26

Step 8: Implement the Process 26

1.7 The Materials in this Text 27

Review Questions 29

Discussion Questions 29

Problems 30

Incident for Discussion 31

Case: United Screen Printers 31

Case: Handstar Inc. 32

Bibliography 34

2 The Manager, the Organization, and the Team 35

2.1 The PM’s Roles 36

Facilitator 36

Communicator 38

Virtual Project Manager 39

Meetings, Convener and Chair 40

2.2 The PM’s Responsibilities to the Project 41

Acquiring Resources 41

Fighting Fires and Obstacles 42

Leadership and Making Trade-Offs 42

Negotiation, Conflict Resolution, and Persuasion 43

2.3 Selection of a Project Manager 44

Credibility 44

Sensitivity 45

Leadership, Style, Ethics 45

2.4 Project Management as a Profession 47

2.5 F itting Projects Into the Parent Organization 48

More on “Why Projects?” 48

Pure Project Organization 50

Functional Project Organization 51

Matrix Project Organization 52

Mixed Organizational Systems 55

The Project Management Office and Project Maturity 55

2.6 The Project Team 57

Matrix Team Problems 58

Intrateam Conflict 59

2.7 Multidisciplinary Teams—Balancing Pleasure and Pain 62

Integration Management 63

Interface Coordination—Interface Management 64

The Design Structure Matrix 65

Comments on Empowerment and Work Teams 66

Review Questions 69

Discussion Questions 69

Incidents for Discussion 70

Case: The Quantum Bank 70

Case: Southern Care Hospital 72

Bibliography 73

3 Project Activity and Risk Planning 76

3.1 The Basis of a Project Plan—The “Project Charter” 76

3.2 The Planning Process—Overview 79

3.3 The Planning Process—Nuts and Bolts 81

The Launch Meeting—and Subsequent Meetings 81

Sorting Out the Project—The Work Breakdown Structure (WBS) 83

Extensions of the Everyday WBS 85

3.4 More on the Work Breakdown Structure and Other Aids 92

The Raci Matrix 92

A Whole-Brain Approach to Project Planning 94

3.5 R isk Management 97

Risk Management Planning 98

Risk Identification and Qualitative Risk Analysis 98

Quantitative Risk Analysis 99

Risk Response Planning 102

Risk Monitoring and Control 103

Review Questions 104

Discussion Questions 104

Problems 105

Incidents for Discussion 106

Case: St. Dismas Assisted Living Facility—1 106

Case: John Wiley & Sons 108

Case: Samson University 109

Bibliography 110

4 Budgeting the Project 112

4.1 Methods of Budgeting 113

Top-Down Budgeting 115

Bottom-Up Budgeting 116

4.2 C ost Estimating 117

Work Element Costing 117

The Impact of Budget Cuts 118

An Aside 119

Activity vs. Program Budgeting 121

4.3 Improving Cost Estimates 122

Forms 123

Learning Curves 123

Tracking Signals 126

Other Factors 128

4.4 Budget Uncertainty and Project Risk Management 130

Budget Uncertainty 130

Project Budgeting in Practice 133

4.5 Project Risk Simulation with Crystal Ball® 134

Considering Disaster 143

Review Questions 144

Discussion Questions 144

Problems 144

Incidents for Discussion 146

Case: St. Dismas Assisted Living Facility Project Budget Development—2 147

Case: Photstat Inc. 149

Case: Building the Geddy’s Dream House 149

Bibliography 151

5 Scheduling the Project 152

5.1 Pert and Cpm Networks 153

The Language of PERT/CPM 153

Building the Network 154

Finding the Critical Path and Critical Time 156

Calculating Activity Slack 158

Doing It the Easy Way—Microsoft Project (MSP) 159

5.2 Project Uncertainty and Risk Management 162

Calculating Probabilistic Activity Times 162

The Probabilistic Network, an Example 163

Once More the Easy Way 165

The Probability of Completing the Project on Time 166

Selecting Risk and Finding D 172

The Case of the Unreasonable Boss 172

The Problem with Mergers 173

5.3 Simulation 174

Incorporating Costs into the Simulation Analysis 177

Traditional Statistics vs. Simulation 179

5.4 The Gantt Chart 181

The Chart 181

5.5 Extensions to Pert/Cpm 186

Precedence Diagramming 186

Final Thoughts on the Use of These Tools 187

Review Questions 189

Discussion Questions 189

Problems 189

Discussion Problem 191

Incidents for Discussion 192

Case: St. Dismas Assisted Living Facility Program Plan—3 193

Case: NutriStar 196

Case: Launching E-Collar 197

Bibliography 199

6 Allocating Resources to the Project 200

6.1 Expediting a Project 201

The Critical Path Method 201

Fast-Tracking a Project 205

Project Expediting in Practice 205

6.2 Resource Loading 207

The Charismatic VP 212

6.3 Resource Leveling 213

Resource Loading/Leveling and Uncertainty 219

6.4 Allocating Scarce Resources to Projects 221

Some Comments about Constrained Resources 222

Some Priority Rules 222

6.5 Allocating Scarce Resources to Several Projects 223

Criteria of Priority Rules 225

The Basic Approach 225

Resource Allocation and the Project Life Cycle 226

6.6 Goldratt’s Critical Chain 227

Estimating Task Times 230

The Effect of Not Reporting Early Activity Completion 231

Multitasking 231

Common Chain of Events 234

The Critical Chain 235

Review Questions 236

Discussion Questions 237

Problems 237

Incidents for Discussion 238

Case: St. Dismas Assisted Living Facility Resource Usage—4 239

Case: Charter Financial Bank 241

Case: Rand Contractors 242

Bibliography 243

7 Monitoring and Controlling the Project 244

7.1 The Plan-Monitor-Control Cycle 244

Designing the Monitoring System 246

7.2 Data Collection and Reporting 247

Data Collecting 247

Data Analysis 248

Reporting and Report Types 249

Meetings 251

Virtual Meetings, Reports, and Project Management 252

7.3 E arned Value 253

7.4 Project Control 260

Purposes of Control 261

7.5 D esigning the Control System 262

Types of Control Systems 264

Tools for Control 266

7.6 Scope Creep and Change Control 269

Review Questions 271

Discussion Questions 271

Problems 272

Incidents for Discussion 273

Case: St. Dismas Assisted Living Facility Case—5 274

Case: Palmstar Enterprises, Inc. 277

Case: Peak Lighting, Inc. 277

Bibliography 279

8 Evaluating and Terminating the Project 280

8.1 Evaluation 280

Evaluation Criteria 281

Measurement 282

8.2 Project Auditing 283

The Audit Process 283

The Audit Report 285

8.3 Project Termination 288

When to Terminate a Project 288

Types of Project Termination 289

The Termination Process 290

The Project Final Report 292

Review Questions 293

Discussion Questions 293

Incidents for Discussion 294

Case: St. Dismas Assisted Living Facility Case—6 294

Case: Datatech 297

Case: Ivory Tower Systems 298

Bibliography 300

Appendix: Probability and Statistics 301

A.1 Probability 301

Subjective Probability 302

Logical Probability 302

Experimental Probability 302

A.2 Event Relationships and Probability Laws 302

The Multiplication Rule 303

The Addition Rule 304

A.3 Statistics 304

Descriptive versus Inferential Statistics 305

Measures of Central Tendency 306

Measures of Dispersion 307

Inferential Statistics 308

Standard Probability Distributions 309

Bibliography 310

Index 311

  • Addresses the newest version of Crystal Ball 11.1.
  • Expanded references to locations in PMBOK® that discuss the topic at hand for those who are also studying for the Project Management Professional® (PMP) or other certification exams offered by the Project Management Institute.
  • To improve the student’s perspective as a project managers in practice, the authors describe the role as constantly making trade-offs between the three main goals of scope, time, and cost but also risk and ancillary goals such as organizational improvement, strategic goals, and future opportunities. New icons in the book’s margins call out where important discussion on these topics appears.
  • The authors added a large number of additional problems and mini-cases to the 5th Edition of the text.
  • Focuses on the basic fundamentals of project management.
  • Practical, hands-on approach, using Microsoft Project and Crystal Ball (risk analysis software). Free trial version of Crystal Ball is available to adopters of the text. 
  • Organization of the book follows project management life cycle, mirroring the way a real-world project would be executed

1 The World of Project Management 1

1.1 What Is a Project? 1

Trends in Project Management 3

1.2 Project Management vs. General Management 4

Major Differences 4

Negotiation 5

1.3 What Is Managed? The Three Goals of a Project 7

1.4 The Life Cycles of Projects 10

1.5 Selecting Projects To Meet Organizational Objectives 11

Nonnumeric Selection Methods 12

Numeric Selection Methods 13

1.6 The Project Portfolio Process 21

1.7 The Materials in this Text 25

Review Questions 27

Discussion Questions 27

Exercises 28

Incident for Discussion 28

Case: Friendly Assisted Living Facility—1 29

Case: Handstar Inc. 30

Bibliography 32

2 The Manager, the Organization, and the Team 33

2.1 The PM’s Roles 34

Facilitator 34

Communicator 36

Virtual Project Manager 39

Meetings, Convener and Chair 40

2.2 The PM’s Responsibilities to the Project 41

Acquiring Resources 41

Fighting Fires and Obstacles 42

Leadership 42

Negotiation, Conflict Resolution, and Persuasion 44

2.3 Selection of a Project Manager 46

Credibility 47

Sensitivity 47

Leadership, Style, Ethics 47

Ability to Handle Stress 48

2.4 Project Management as a Profession 50

2.5 Fitting Projects into the Parent Organization 51

Pure Project Organization 52

Functional Project Organization 53

Matrix Project Organization 54

Mixed Organizational Systems 57

The Project Management Office and Project Maturity 57

2.6 The Project Team 59

Matrix Team Problems 61

Intrateam Conflict 62

Integration Management 64

Review Questions 66

Discussion Questions 66

Incidents for Discussion 67

Case: Friendly Assisted Living Facility—2 68

Case: The Quantum Bank 68

Case: Southern Care Hospital 69

Bibliography 71

3 Project Activity and Risk Planning 74

3.1 From the Project Charter to the Project Plan 74

3.2 The Planning Process—Overview 76

3.3 The Planning Process—Nuts and Bolts 77

The Launch Meeting—and Subsequent Meetings 77

Sorting Out the Project—The Work Breakdown Structure (WBS) 80

Extensions of the Everyday WBS 83

3.4 More on the Work Breakdown Structure and Other Aids 86

The RACI Matrix 86

A Whole-Brain Approach to Project Planning 88

The Design Structure Matrix 91

Agile Project Management 92

3.5 Risk Management 94

Review Questions 101

Discussion Questions 101

Exercises 102

Incidents for Discussion 103

Case: Friendly Assisted Living Facility—3 104

Case: John Wiley & Sons 105

Case: Samson University 106

Bibliography 107

4 Budgeting the Project 109

4.1 Methods of Budgeting 110

Top-Down Budgeting 112

Bottom-Up Budgeting 113

4.2 Cost Estimating 113

Work Element Costing 114

The Impact of Budget Cuts 114

An Aside 116

Activity versus Program Budgeting 118

4.3 Improving Cost Estimates 119

Forms 119

Learning Curves 119

Other Factors 123

4.4 Budget Uncertainty and Project Risk Management 125

Budget Uncertainty 125

Project Budgeting in Practice 128

4.5 Project Risk Simulation with Crystal Ball® 129

Considering Disaster 136

Review Questions 137

Discussion Questions 137

Exercises 138

Incidents For Discussion 139

Case: Friendly Assisted Living Facility Project Budget Development—4 140

Case: Photstat Inc. 142

Case: Building the Geddy’s dream house 143

Bibliography 144

5 Scheduling the Project 145

5.1 Pert and CPM Networks 146

The Language of PERT/CPM 146

Building the Network 147

Finding the Critical Path and Critical Time 149

Calculating Activity Slack 151

Doing It the Easy Way—Microsoft Project (MSP) 152

5.2 Project Uncertainty and Risk Management 155

Calculating Probabilistic Activity Times 155

The Probabilistic Network, an Example 156

Once More the Easy Way 158

The Probability of Completing the Project on Time 159

Selecting Risk and Finding D 162

The Case of the Unreasonable Boss 162

A Potential Problem: Path Mergers 163

5.3 Simulation 164

Incorporating Costs into the Simulation Analysis 166

Traditional Statistics versus Simulation 167

5.4 The Gantt Chart 170

The Chart 170

5.5 Extensions to PERT/CPM 172

Precedence Diagramming 173

Final Thoughts on the Use of These Tools 174

Review Questions 175

Discussion Questions 176

Exercises 176

Discussion Exercise 179

Incidents for Discussion 179

Case: Friendly Assisted Living Facility Program Plan—5 180

Case: NutriStar 182

Case: Launching E-Collar 184

Bibliography 185

6 Allocating Resources to the Project 186

6.1 Expediting a Project 187

The Critical Path Method 187

Crashing a Project with Excel 191

Fast-Tracking a Project 195

Project Expediting in Practice 195

6.2 Resource Loading 196

The Charismatic VP 202

6.3 Resource Leveling 202

Resource Loading/Leveling and Uncertainty 209

6.4 A llocating Scarce Resources to Projects 211

Some Comments about Constrained Resources 211

Some Priority Rules 211

6.5 Allocating Scarce Resources to Several Projects 213

Criteria of Priority Rules 214

The Basic Approach 215

Resource Allocation and the Project Life Cycle 215

6.6 Goldratt’s Critical Chain 216

Estimating Task Times 219

The Effect of Not Reporting Early Activity Completion 220

Multitasking 221

Common Chain of Events 223

The Critical Chain 224

Review Questions 225

Discussion Questions 226

Exercises 226

Incidents for Discussion 228

Case: Friendly Assisted Living Facility Resource Usage—6 229

Case: Charter Financial Bank 231

Case: Rand Contractors 232

Bibliography 233

7 Monitoring and Controlling the Project 234

7.1 The Plan-Monitor-Control Cycle 234

Designing the Monitoring System 236

7.2 Data Collection and Reporting 237

Data Analysis 237

Reporting and Report Types 238

Meetings 240

Virtual Meetings, Reports, and Project Management 241

7.3 Earned Value 242

7.4 Project Control 249

Purposes of Control 249

7.5 Designing the Control System 251

Types of Control Systems 252

Tools for Control 254

Burnup and Burndown Charts 257

7.6 Scope Creep and Change Control 257

Review Questions 259

Discussion Questions 260

Exercises 260

Incidents for Discussion 261

Case: Friendly Assisted Living Facility Case—7 263

LIST 265

Case: Palmstar Enterprises, Inc. 266

Case: Peak Lighting, Inc. 266

Bibliography 267

8 Evaluating and Closing the Project 269

8.1 Evaluation 269

Evaluation Criteria 270

Measurement 271

8.2 Project Auditing 272

The Audit Process 272

The Audit Report 274

8.3 Project Closure 277

When to Close a Project 277

Types of Project Closure 278

The Closure Process 279

The Project Final Report 281

Review Questions 283

Discussion Questions 283

Incidents for Discussion 284

Case: Friendly Assisted Living Facility Case—8 284

Case: Datatech 287

Case: Ivory Tower Systems 288

Bibliography 290

appendix: Probability and Statistic 291

A.1 Probability 291

Subjective Probability 292

Logical Probability 292

Experimental Probability 292

A.2 Event Relationships and Probability Laws 292

The Multiplication Rule 293

The Addition Rule 294

A.3 Statistics 294

Descriptive versus Inferential Statistics 295

Measures of Central Tendency 296

Measures of Dispersion 297

Inferential Statistics 298

Standard Probability Distributions 299

Bibliography 300

Index 301

  • NEW online appendix on Time Management
  • NEW marginal icons call out where important discussions on improving the student’s perspective as a project managers in practice. The authors describe the role as constantly making trade-offs between the three main goals of scope, time, and cost but also risk and ancillary goals such as organizational improvement, strategic goals, and future opportunities.
  • UPDATED problems and mini cases
  • Expanded references to locations in PMBOK® that discuss the topic at hand for those who are also studying for the Project Management Professional® (PMP) or other certification exams offered by the Project Management Institute.
  • Focuses on the basic fundamentals of project management.
  • Practical, hands-on approach, using Microsoft Project and Crystal Ball (risk analysis software). Free trial version of Crystal Ball is available to adopters of the text. 
  • Organization of the book follows project management life cycle, mirroring the way a real-world project would be executed
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