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Theory of Constraints Handbook - James Cox Iii [34]

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variability of activities W and X1. However, when activity duration variability results in longer than expected duration of project 1, a resource contention problem between activity X1 and activity X2 causes the completion date of project 2 to be later than planned. PERT/CPM does not recognize the existence of these three core drivers and does not provide a mechanism to reduce their collective impact on project completion.

Cause: Murphy exists.

Cause: PERT/CPM does not protect against Murphy.

Cause: PERT/CPM does not recognize that multiple projects are interrelated due to the shared use of common resources.

These are addressed by Guidelines VI, VIII, and XII.

Problem 5: Early Consumption of Project Slack Figure 2-4 Problem 5 shows two simple projects diagramed as a single mega-project. The critical paths of each project are as follows: project 1 A-B-C = 16; project 2 E-D2 = 15. The non-critical path of project 1 (A-D1-C) has two periods of associated slack. Typical PERT/CPM management would delay starting activity D1 in project 1 by the amount of slack available. If activity D1 is started on its late start date, activity D2 in project 2 and thus the completion of project 2 will be delayed by one period. PERT/CPM does not look at the impact of contention across projects on project lateness.

Cause: PERT/CPM does not view activity slack strategically.

Cause: The project is a major undertaking that determines the success or profitability (goal) of the organization.

Cause: Project managers delay expenses by starting activities as late as possible.

These are addressed by Guidelines I, II, III, IX, and XII.

Problem 6: Planning to Time Rather Than Activity Completion Figure 2-4 Problem 6 shows two simple projects diagrammed as a single mega-project. Each of the two projects has only two activities, and each activity has some associated activity duration variability. The expected duration of each activity is as follows: E(A) = 4, E(B1) = 2, E(B2) = 5, and E(D) = 5. Typical PERT/CPM planning would yield the following estimates of the date of project completion: project 1 complete in period 9, and project 2 complete in period 7.

The typical PERT/CPM manager would try to plan to start each activity based on the estimated time of completion of the preceding activity. Since E(A) = 4 and E(B1) = 2, the manager would plan to start activities B2 and D in periods 4 and 2, respectively. If all possible activity durations are enumerated and activities B2 and D are started based on the expected time of completion of A and B1, respectively, the expected completion dates of project 1 and project 2 exceed their PERT/CPM-planned completion dates. The expected completion date of project 1 is 9.5 periods versus 9; the expected completion date of project 2 is 7.625 periods versus 7. PERT/CPM does not look at the impact of scheduling to time instead of completion of proceeding activity across projects on project completion.

Cause: PERT/CPM does not recognize that some resources might be required for more than one activity.

Cause: PERT/CPM provides resource schedules based only on technological relationships and time estimates.

These are addressed by Guidelines XI and XII.

Problem 7: Increasing Planned Activity Duration Estimates In this case (Fig. 2-4 Problem 7), the activity duration estimates have been increased by one period to reflect that managers may recognize that activity duration variability exists (see Fig. 2-3). The revised estimates of activity duration are as follows: E(A) = 5, E(B2) = 3, E(B1) = 6, and E(D) = 6. If the reader examines Fig. 2-3 Problem 4, he will find that increasing activity duration estimates leads to PERT/CPM-planned projects being late; increasing planned activity times in the multiple project environment also causes projects to be late.

If all possible combinations of activity duration are enumerated and activities B2 and D are started based on the (revised) expected time of completion of A and B1, respectively, the expected completion date of project 1 is equal to its planned

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