Project Management Exclusive Interview Questions and Answers (49) - Page 1

WBS (Work Breakdown Structure) is a structured way of breaking / decomposing project in to various components. In one sentence WBS is a way to breakdown project in to logical lower level details. Below figure ‘WBS’ shows how a typical WBS looks like. There are six levels till where we can drill down and breakdown the job structure.
 

Figure: - WBS
 

Level 1:- The first level is the project name or the name of the assignment.
Level 2:- Level 2 represents the subsystem which will make up the project.
Level 3:- Level 3 shows the task to be performed to complete the subsystem from a managerial aspect.
Level 4:- The main task is further broken down in to sub tasks from a technical aspect.
Level 5:- This is the final deliverable also termed as work package.
Level 6:- These are components needed to form the work package.

From Level 1 to Level 3 are all managerial activities. From Level 4 to Level 6 are all technical activities.

Below figure ‘WBS for CPU’ shows detail breakdown for assembling a CPU of a computer.
 

Figure: - WBS for CPU
 

The first number in WBS denotes the project. For instance in figure ‘WBS numbering’ we have show the number ‘1’ as the project number which is further extended according to level. Numbering and numeric and alphanumeric or combination of both. Figure ‘Different Project Number’ shows the project number is ‘528’
 

Figure: - WBS Numbering

Figure: - Different Project Number
 

This answer can vary from individual to individual. But here’s how we think it should work. There are two steps for doing resource allocation: -

• Break up the project in to WBS and extract the task from the same. For instance below figure ‘Task from WBS’ shows how we have broken the accounting project in to small section and the final root is the tasks.
 

Figure: - Task from WBS
 

• Now the tasks at the final root are assigned to the resources. Table ‘Assign task to resource’ shows how the task are now allocated to resource.
 

Figure: - Assign task to resource
 

Below is a pictorial view of numerous uses of WBS.
 

Figure: - Use of WBS
 

One of the main uses of WBS is for scheduling. WBS forms as a input to network diagrams from scheduling aspect.
 

Figure: - WBS and Network
 

Network diagram shows logical relationship between project activities. Network diagram helps us in the following ways: -

• It helps us understand which activity is independent of other activity. For instance you can start coding/execution of transactional screens with out master screens being completed. This also gives an other view saying that you can execute both the activities in a parallel fashion.

• Network diagram also gives list of activities which can not be delayed. Like we can delay the master screens of a project, but not the transactional.
 

There are two types of diagrams: -

• Activity on Arrow diagram ( Arrow diagram )
• Activity on Node diagram ( Precedence diagram )

AOA (Activity on Arrow) diagram
Before we understand what AOA is, let’s consider the table below which has list of
activities to start a computer institute. It has five columns below is description about the
same:
• First column is just a sequence number for the activity.
• Second column is a short activity description,
• Third column has number of days needed to complete the activity.
• Fourth column describes which activity needs to be completed to start this activity
• Fifth column shows what the final output of the activity is.

Table: - Computer institute Activity list
 

Figure: - AOA
 

As the name suggests Activity on Arrow (i.e. AOA) which means arrows represent activity and the nodes represent finished activities. Figure ‘AOA’ represents how the activity is shown on the arrow and how the node shows the finished activity. So the node represents completed activities and arrows represent activities.

So let’s join the activities and nodes defined in table ‘Computer Institute Activity List’. Figure ‘AOA for Computer Institute’ shows how the AOA diagram is built. We have put
the activities on the arrow and the nodes represent the finished activity. On the arrow
itself we have put the number of days for every activity.
 

Figure: -AOA for Computer Institute
 

AON (Activity on Node) diagram
 

Figure: - AON
 

In AOA we view Activity on arrow while in AON we view Activity on the Node. So
the change of thinking shifts from viewing activities as events (AON) rather than
activities happening between milestones.

Figure ‘AON’ represents the same in a pictorial manner. Below is the same redrawn AON diagram for the computer institute activity.
 

Figure: - AON for Computer Institute
 

Network diagrams help us in the following ways: -

• Helps us find our critical / non-critical activities. So if we know our critical activities we would like to allocate our critical people on the critical task and medium performing people on the non-critical activities.

• This also helps us to identify which activities we can run in parallel, thus reducing the total project time.
 

AOA is nothing but Arrow Diagram and AON is nothing but precendence diagram.
 

As discussed in the previous section we have two types of network diagrams one is AON (Activity Networks) and other is AOA (Arrow Networks). Below figure ‘Types of Network Diagrams’ shows the classification in a more visual format. CPM / CPA (Critical Path Method / Critical Path Analysis) and PERT (Program Evaluation and Review Technique) come under Arrow networks. PDM (Precedence Diagrams) comes under activity diagram.
 

Figure: - Types of Network Diagrams
 

CPA / CPM (Critical path analysis / method) are an effective way to analyze complex projects. A project consists of set of activities. CPA represents the critical set of activities to complete a project. Critical path helps us to focus on essential activities which are critical to run the project. Once we identify the critical activities we can devote good resources and prioritize the same accordingly. CPA also gives us a very good basis for scheduling and monitoring for progress. One of the most important thing it does is allows the project manager to concentrate on important activities.

Critical Path is the path which takes the longest time. In the above example we have three paths (please refer AOA for computer institute or AON for computer institute in the previous questions) path1, path2 and path3. Let’s sum up the number of days allocated on those paths, so path1 = 19 days, path2 = 29 days and path3 = 9 days. Both figures also show the number of days required on the path.

So path2 is the longest path on the network diagram and also the most important path. In short path2 is the critical path and this method is termed as Critical Path Method /Analysis. Putting in other words the task on the critical path needs careful monitoring and any delays on the critical path will lead to delay of the project. You can easily visualize from the CPM diagram that we if we do not decide location, sign a lease, fix interior and paint we will not have the actual institute at place in given time span.
 

CPM (Critical Path Method) uses the following times for an activity.

• (EST)Early start Time is the earliest time the activity can begin.
• (LST)Late start Time is the latest time the activity can begin and still allow the project to be completed on time.
• (EFT) Early finish Time is the earliest time the activity can end.
• (LFT) Late finish Time is the latest time the activity can end and still allow the project to be completed on time.
We will use the same example of the computer institute described in the previous
example for calculating and understanding EST and EFT.
 

Figure: - Start and End
 

According to CPM calculation the start date should be minimum 1-Jan-2009 and maximum end date is 30-jan-2009. Our EST, EFT, LST and LFT should fall between these lines.
 

Figure: - Forward Calculation
 

First we need to calculate EST and EFT. EST and EFT are calculated using the forward pass methodology. Figure ‘EST and EFT’ shows how the forward calculation works. We add "0" to the start date i.e. 1-Jan-2009 which becomes the EST of ‘Get Faculties’. ‘Get Faculties’ task takes the 6 days and adds to EST which gives us 7-Jan-2009 which is the EFT for ‘Get Faculties’. EFT becomes the EST of the next task i.e. ‘Buy Computers’. Again we add number of days of ‘Buy Computers’ task to get EFT and so on. In short EFT is calculated by subtracting number of days from EST. EFT of this task becomes the EST of the next task.
 

Figure: -EST and EFT

Figure: - Backward Calculation
 

In order to calculate LST and LFT we need to calculate backward from the dead line date.

Figure ‘LST and LFT’ show how the calculation actually happens. As concluded
previously the latest date till which the institute should be ready is 30-Jan-2009. The latest dead line date becomes the LFT of the last activity i.e. ‘Prepare Course’. We subtract the number of days from the LFT and get LST of ‘Prepare Course’ activity which is 20-Jan2009. LST of this activity becomes the LFT of the activity which needs to finish before this i.e. ‘Install Software’ and so on. Figure ‘Backward Calculation’ shows how the calculation moves. LST of the current task is LFT minus number of days. Current Activity LST is then assigned to the previous task’s LFT.
 

Figure: -LST and LFT
 

Below figure ‘EST, EFT, LST and LFT’ shows the complete figure after the full
calculation forward and backward.
 

Note: - Try calculating manually to understand how we reached to every figure in the diagram below. In real time scenario you will be using a tool…So do not worry. But you should understand the concept that’s important.
 

Figure:- EST, EFT, LST and LFT
 

Float (also known as slack, total float and path float) is computed for each task by subtracting the EFT from the LFT (or the early start from the late start). Float is the amount of time the task can slip without delaying the project finish date. Free float is the amount of time a task can slip without delaying the early start of any task that immediately follows it. In the previous question figure ‘EST, EFT, LST and LFT’ we have computed the float for every activity. For instance ‘Get Faculties’ has a slack of 10, ‘Advertisement’ task has a slack of 20 days and so on.
 

PERT is again a network diagram. In CPM the activity durations are based on historic data which has been performed many times. But what if an activity is not performed and this is the first time the activity is performed in the organization, that’s when PERT comes to help. CPM is used when the time lines of the activities are determestic while PERT is used when the timelines are not determestic.

PERT uses three time estimates to come to a conclusion regarding time estimates for a activity.

Optimistic Time :-It’s the shortest time in which the activity can be completed.

Pessimistic Time :-It’s the longest time an activity might require.

Most Likely Time (m):-It’s the completion time which has the highest probability.
 

Figure: - PERT Computations
 

Now using the above three estimates we can calculate the expected time. Figure ‘Pert Computations’ shows the formulae in more detail where ‘a’ is the optimistic time, ‘b’ is the pessimistic time, ‘m’ the most likely and ‘te’ the expected time.

Figure: - Standard Deviation

Other than expected time there are two more important formula’s one is calculating the ‘standard deviation (Sd)’ and the other is ‘total standard deviation (St)’. Both the formulas are given in the figure ‘Standard Deviation’ and ‘Total Standard Deviation’. Terminology ‘a’,’b’ and ‘c’ remain same. SA1, SA2 are standard deviations which are calculated on the individual activity.

Let’s not talk about theory and let’s apply the above fundamentals to our institute project. What we will do is apply the PERT fundamentals to two different probabilities only on the CPM path of the computer institute. Below figure shows the two probability and the calculations. We can see from the calculations the two probabilities one and two. We can also see the standard deviation of probability one is less than probability two. So
probability one has more stability and can hence become our valid plan. Apply the formulas (PERT, Te, Sd and St) explained previously to the diagram.
 

Figure: - Probability One

Figure: -Probability Two
 

Note: - We use PERT when we have not performed that activity any time before. We use CPM when we have history about the acitivity and we have perfomed the activity atleast once. So a project manager should be aware of when to use both the diagrams.
 

GANTT chart is a time and activity bar chart. Gantt charts are easy-to-read charts thatdisplay the project schedule in task sequence and by the task start and finish dates. Gantt charts are simple chart which display the project schedule in task sequence and by thetask start and finish dates. Lets consider the below given simple four activity network figure.
 

Figure: -Simple Activity Network
 

We have circled the activity and also mentioned the time duration required in weeks. For instance Activity A requires 1 week, Activity B requires 2 weeks and so on. Now let’s construct a simple GANTT chart for the simple network activity diagram. GANTT chart
is an illustration of time and activities. Below figure ‘GANTT CHART’ is how the network activity will look when viewed in GANTT chart format. In GANTT chart we put down the activities in the vertical axis and the time scale on the horizontal axis. So on the vertical axis we have listed down ‘Task A’, ‘Task B’, ‘Task C’ and so on. While on the horizontal axis we have listed down the time in weeks. There is one more column
duration added for reference. One the most important component in GANTT chart is the activity bar which represents an activity. Below figure ‘Activity Bar’ shows how we represent an activity. The start of the activity is represented by a top arrow and the end by a down arrow.
 

Figure: -Activity Bar
 

So we list down all activities and start drawing the activity bar according to duration. Once done the final output is as shown in figure ‘GANTT chart’. The top bar shows the total activity period. Dependencies are shown by one arrow connecting to the other arrow; we have circled how the dependencies are shown. Task B can only start if task A is completed. GNATT chart is a helpful way to communicate schedule information to top management since it provides an easy-to-read visual picture of the project activities.
 

Figure: -GANTT Chart
 

It does not show clear dependencies/relationships between tasks, for instance, which task comes first, then second, and so on. It also fails in showing the critical and non-critical tasks. GANTT chart is best used to show summary of the whole project to the top management as it does not show detail information for every activity.

Figure: - Monte-Carlo Applied
 

In Monte-Carlo simulation random value is selected from the range and possibility / model is generated. This model is saved and then the second random value is selected and so on. For instance consider the below figure ‘Task1 and Task2’. ‘Task2’ can be finished only when ‘Task1’ is completed. We have also chosen the min and max range in which both the task can be completed. ‘Task1’ can be completed in a minimum time of 1 day and maximum of 3 days. ‘Task2’ can be completed in minimum 2 days and in maximum 4 days.
 

Figure: - Task1 and Task2
 

Now let’s apply Monte Carlo simulation. Below figure ‘Monet Carlo on Both Tasks’ shows the different combinations.
 

Figure: - Monte Carlo on Both Tasks
 

Now let’s collect the number of times the days have occurred. Below figure ‘Number of Possibilities’ shows that 5 days has occurred the most times. There is a high possibility that task1 and task2 will be completed in 5 days.
 

Figure: - Number of possibilities

PV (Planned Value):- PV is also termed as (BCWS) Budgeted cost of work scheduled. It answers “How much do we plan to spend till this date?”. It’s the total budgeted cost for the project.

AC (Actual Cost):- AC is also termed as ACWP (Actual cost of Work Scheduled). It answers “How much have we actually spent?”.

EV (Earned Value):- EV is also termed as BCWP (Budgeted Cost of Work Performed). It answers “How much work has actually been completed?”.
 

Figure: - PV, AC and EV
 

Many project managers traditionally use only Actual and Planned values. But it’s very much possible that you will not get proper results from the same. For instance consider the project shown in figure ‘Actual and Planned’. The project duration is 5 weeks. According to the planned value graph in Week1 we will spend 600$, in week3 we will spend 3800 $ and on the completion of project it is 6000$.

But we where getting computers at a discounted cost in Week1 itself so we bought the computer. According to plan we are supposed to spend in Week1 750 $ but in actual we have spent 3000$. By comparing with the actual plan value we have concluded that we over budget by 2250 $ in the first week. But that’s not the actual case; in reality we bought the computers on discounted rate. So the graph is showing something really wrong. This issue is solved by using EV (Earned Value).
 

Figure: - Actual and Planned
 

Earned Value measures progress and gives us forecasting, thus giving us an actual measure of the health of the project. For instance see the figure ‘Earned Value’. We have given two views one is the planned value and the other is the earned value. According to the planned value it’s a four week project with 25% (2500 $) work completed on Week1, 50 % (5000$) work completed on Week2 and so on. Now when the project starts executing on Week1 only 20% work is completed which means we have spent 2000$ and on week2 only 30 % work is completed. 2000$ and 3000$ shows the earned value for Week1 and Week2.
 

Figure: - Earned Value
 

Earned Value gives us three metric views for a project.
 

Figure: - Earned Value Metrics
 

Current Progress: - This shows how we are performing in the project.
Forecasting: - Will help us answer how we will do in the project in future.
How will we catch up: - In case the project is moving behind schedule or over budget how do we make up?

Current Progress metrics

Schedule Variance (SV)

Schedule variance is the difference between Earned value and planned value
 

Cost Variance (CV)

Cost variance is the difference between earned value and the actual cost.
 

Cost performance Index (CPI)

CPI is the ratio of Earned value to Actual cost.
 

Schedule performance Index

SPI is the ratio of (Earned Value) EV to (Planned Value) PV.
 

Forecasting

EVA helps us to also forecast our project schedule below is the metrics for the same
 

How will we catch up?
 

This is the third view which EV gives us. If the project is not on schedule how do we catch up with the same?. EV gives us something called as To-Complete performance Index (TCPI). TCPI is in an indication of how much we should perform to meet the project schedule.
 

Let’s take a small sample project. We need to make 400 breads and following is the estimation of the project:-

• We need to make 400 breads.
• It will take 10 hours to make 400 breads.
• Each bread will cost 0.02 $.
• Total cost of making 400 breads is 400 X 0.02 = 8$.
• In one hour we should be able to make 40 breads.

Below graph “Bread Project” shows the planned value and the actual cost graph. According to the planned value in 3 hours we will make 120 breads, in 7 hours we will make 280 breads and finally we will complete the 400 bread target in 10 hours. As the project moves ahead actually in the 3 rd hour we have only completed 80 breads with 3$ spent.
 

Figure: - Bread Project
 

Ok, now that we know the actuals its time to calculate the EV, PV and the AC.

In the 3rd hour below is the analysis.

 

Now it’s the time to calculate the earned value. Below figure ‘Earned Value for Bread’ shows the simplified view of the bread project
 

Figure: - Earned Value for Bread
 

EV (Earned Value) = 80 * 0.02 = 1.6$ (How much work has been completed?). So let’s do all calculations.