Business Operations: Formulas for Project Management

Part of the Operations Management For Dummies Cheat Sheet

The management of one-time projects to install new operations or change existing operations is a major discipline for operations managers. Though based on similar skills used in optimizing ongoing operations, project management focuses on the completion of a discrete project on time, on budget, and in scope, as planned and approved.

Project managers use the following formulas to estimate the shortest and most likely project completion time, along with expected variation, expected cost, and variation.

CPM (critical path method)

Let ES = earliest start time, EF = earliest finish time, LS = latest start time, and LF = latest finish time for an activity.

Slackactivity = LFEF = LSES

PERT (program evaluation and review technique)

Let a = the optimistic, m = the most likely, and b = the pessimistic estimates for the duration of an activity.

For PERT, the expected duration of an activity and its variance are:

image0.png

 

This formula also works for estimating individual activity costs.

image1.png

  • Add a Comment
  • Print
  • Share
blog comments powered by Disqus

SERIES
Operations Management For Dummies Cheat Sheet

Advertisement

Inside Dummies.com

Dummies.com Sweepstakes

Win $500. Easy.