PROJECT GASE STUDY ¢ - Bilkent .A CASE STUDY IN CONSTRUCTION INDUSTRY A THESIS ... 2.3.2.3

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Transcript of PROJECT GASE STUDY ¢ - Bilkent .A CASE STUDY IN CONSTRUCTION INDUSTRY A THESIS ... 2.3.2.3

PROJECT GASE STUDY

COfeSrpT^CTI liiOUST/

j i H A m ' V u a '

4 fi - -'J

PROJECT MANAGEMENT:

A CASE STUDY IN

CONSTRUCTION INDUSTRY

A THESIS

SUBMITTED TO THE FACULTY OF MANAGEMENT

AND THE GRADUATE SCHOOL OF BUSINESS ADMINISTRATION

OF BILKENT UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

By

DDEM KLKSZ

JULY 1996

3?(5

AZ

053775

I certify that I have read this thesis, and in my opinion it is fully adequate, in scope

and quality, as a thesis for the degree of the Master of Business Administration.

Assoc. Prof. Erdal Erel

I certify that I have read this thesis, and in my opinion it is fully adequate, in scope

and quality, as a thesis for the degree of the Master of Business Administratiorj,.-

Assoc. Prof. Dilek nkal

I certify that I have read this thesis, and in my opinion it is fully adequate, in scope

and quality, as a thesis for the degree of the Master of Business Administration.

Assist. Prof. Nee Akkaya

Approved for the Graduate School of Business Administration.

JProf. Dr. ^ b id e y Togan

ABSTRACT

PROJECT MANAGEMENT;

A CASE STUDY IN

CONSTRUCTION INDUSTRY

Didem Koluksuz

M.B.A.

Supervisor; Assoc. Prof. Erdal Erel

July 1996, 80 Pages

One of the application areas that project management can effectively be applied is

the construction industry. In this thesis, a case study is carried out in order to point

out the importance and essentiality of project management, especially project

scheduling and control. For this purpose, Microsoft Project Version 4.0 (a project

management software) is used, and the applicability of Project Evaluation and

Review Technique (PERT) and Critical Path Method (CPM) are considered.

Key Words: Project management, planning and scheduling, critical path method,

project evaluation and review technique.

ZET

PROJE YNETM

NAAT SEKTRNDE

BR VAKA ALIMASI

Didem Klksz

Yksek Lisans Tezi, letme Bilimleri Enstits

Tez Yneticisi: Do. Dr. Erdal Erel

Temmuz 1996, 80 Sayfa

Proje ynetiminin en etkin ekilde uygulanabildii alanlardan biri inaat sektrdr.

Bu tezde, proje ynetiminin, zellikle de izelgeleme ve kontroln, nemini ve

gerekliliini belirlemek amacyla bir vaka almas yaplmtr. Bunun iin, Microsoft

Project Version 4.0 (bir proje ynetimi program) kullanlm; Proje Deerlendirme ve

nceleme Tekniinin, ve Kritik Yol Metodunun uygulanabilirlii incelenmitir.

Anahtar Kelimeler: Proje ynetimi, planlama ve izelgeleme, kritik yol metodu,

proje deerlendirme ve inceleme teknii.

I would like to express my thanks to Assoc. Prof. Erdal Erel for his valuable

guidance and supervision throughout the study. I would also like to thank

Assoc. Prof. Dilek nkal and Assist. Prof. Nee Akkaya for their useful

suggestions and comments.

I would also like to express my gratitude to my family for their endless

supports and encouragement.

Finally, I would like to thank Ms. Ruhsar Arikan for devoting considerable

time to the work.

ACKNOWLEDGEMENTS

Ill

TABLE OF CONTENTS

ABSTRACT.

ZET..........

ACKNOWLEDGEMENTS................................................................................... ii

TABLE OF CONTENTS..................................................................................... iv

LIST OF FIGURES............................................................................................. vi

LIST OF TABLES...............................................................................................vii

1. INTRODUCTION............................................................................................ 1

1.1. Scope and Purpose of the Thesis......................................................... 2

1.2. Outline of the Thesis............................................................................... 2

2. LITERATURE REVIEW..................................................................................4

2.1. What is a Project?.................................................................................. 4

2.2. Project Management Concept.................................................................5

2.3. Project Planning and Scheduling............................................................7

2.3.1. Project Scheduling Tools...................................................................8

2.3.1.1. Work Breakdown Structure (WBS)............................................. 9

2.3.1.2. Gantt Chart.................................................................................10

2.3.1.3. Network Chart (PERT/CPM Chart)...........................................11

2.3.2. Project Scheduling Techniques.......................................................14

2.3.2.1. CPM Features........................................................................... 15

2.3.2.2. PERT Features.......................................................................... 17

2.3.2.3. PERT/CPM Features.................................................................22

2.3.3. Implications of PERT/CPM..............................................................24

3. CASE ANALYSIS.........................................................................................26

3.1. General Information About the Firm..................................................... 26

3.2. General Information About the Project.................................................27

IV

3.3. Project Scheduling With PERT/CPM Method.......................................28

3.3.1. Breakdown and Activity List of the Project.....................................28

3.3.2. Precedence Relations.....................................................................29

3.3.3. Estimations.......................................................................................30

3.3.3.1. Estimation of Task Durations................................................... 30

3.3.3.2. Estimation of Costs...................................................................33

3.3.4. Data Entry........................................................................................34

3.3.5. Determination of the Critical Path.................................................. 35

3.3.6. Crashing the Project........................................................................40

3.4. Results................................................................................................... 46

4. SUMMARY AND RECOMMENDATIONS...................................................48

4.1. Summary and Discussion......................................................................48

4.2. Recommendations................................................................................. 53

REFERENCES.................................................................................................. 55

APPENDICES................................................................................................... 57

APPENDIX A - ORGANIZATIONAL CHART OF ANKARA ALMNYUM

INDUSTRY AND TRADE INC.....................................................................58

APPENDIX B - WORK BREAKDOWN AND LIST OF ACTIVITIES............60

APPENDIX C - PREDECESSORS AND PRECEDENCE RELATIONS.....64

APPENDIX D - TIME AND COST ESTIMATES OF ACTIVITIES (REAL

W BS)...........................................................................................................69

APPENDIX E - SCHEDULING TABLE FOR THE PROJECT......................72

APPENDIX F - SCHEDULING TABLE FOR THE PROJECT AFTER

CRASHING ACTIVITY 52.......................................................................... 75

APPENDIX G - SCHEDULING TABLE FOR THE PROJECT AFTER

CRASHING ACTIVITIES 52 AND 53 ........................................................ 78

LIST OF FIGURES

Figure 1. A graphical representation of WBS............................................. 10

Figure 2. Precedence relationships..............................................................12

Figure 3. Beta probability distribution with three estimates........................19

Figure 4. Network diagram and the critical path......................................... 37

VI

LIST OF TABLES

Table 1. Expected time and variance computations for activities with

uncertain activity times..................................................................................... 32

Table 2. Durations, start and finish dates of critical activities 36

Table 3. Normal and crash time and cost estimates for activities that can

be crashed........................................................................................................42

Table 4. Finish dates estimated in the project.......................................... 47

VII

1. INTRODUCTION

Today, all business entities around the world are in a state of competition

and this competition will inevitably increase as a result of globalization. The

importance of this fact for Turkey is that Turkish firms have recently been

introduced to the conce