Economic Analysis for Project

Selection
Investment Analysis
 THE WORK
BREAKDOWN
STRUCTURE
Simple Approach for Creating the WBS

• Gather project team

• Provide team members with pad of sticky-notes

• Team members write down all tasks they can think of

• Sticky-notes placed and arranged on wall

A Partial WBS (Gozinto Chart) for an Annual Tribute Dinner
Project
A Linear Responsibility Chart
 What is WBS ?
 What the WBS is used for ?
 Why and how to use the WBS
WORK BREAKDOWN STRUCTURE
Examples
Job creation process
Group WBS exercise
• What is WBS:
In planning a project, the manager must structure the work into small
elements. It is

• An outline of the work that is to be done to complete the project

• A way to organize and control the project
• A method to ensure that the plan is complete
• A basis for all of your formal project management steps
• Anything not in the WBS is not in the project
• WBS Terminology:

• WBS summary tasks

The categories organizing the work.
This is a higher level than the actual work packages

• Code of accounts
Uniquely identifies each element of the WBS.

• Work packages
A deliverable at the lowest level of the WBS.

• WBS dictionary
Includes work package instructions for the assigned team member.
• Example
• Landscape project

• 1. Design landscape
• 2. Lawn
• 2.1 Acquire lawn material
• 2.2 Install sprinkler system
• 2.2.1 Identify sprinkler locations
• 2.2.2 Dig trenches
• 2.2.3 Install pipe and hardware
• 2.2.4 Cover sprinkler system
• 2.3 Plant grass
• Summary Tasks:

• Lawn
• Install sprinkler system
• Code of Accounts:

• 1.
• 2.
• 2.1
• 2.2
• 2.2.1
• 2.2.2
• 2.2.3
• 2.2.4
• 2.3
• Work Packages:

• Design Landscape
• Acquire land material
• Install sprinkler system
• Identify sprinkler locations
• Dig trenches
• Install pipe and hardware
• Cover sprinkler system
• Plant grass
• Work Packages:

• Represent units of work at a level where work is performed

• Clearly distinguish work packages from others

• Assigned to a functional group

• Limit the work to be performed to relatively short periods of time

• Example: Job Creation Process:

• Task description
Hire new employee for Product Specialist position.
• Goals and Objectives:
Fill position by June 15, 2011 and have trained by end of July.
• Job Description:
Provide the job description here with performance criteria.
• Acceptance Criteria:
Mr. Jamal must provide approval of selected candidate before the job offer is made, and provide
acceptance upon completion of probationary period.
• Work packages should be…

• Relatively short in time span

• Measurable by cost
• Assignable to an individual, department, or company

• Two Approaches:
• Low-level WBS
Created from a perspective of activities or tasks expressed as action
verbs
Example: Low-level WBS

Making Chocolate cakes

1. Preparation
1.1 Read recipe
1.2 Check ingredients at home
1.3 Make shopping list
1.4 Go on shopping trip
and so on…
• High-level WBS

Based on products, requirements, or deliverables

Created from a perspective of the project scope
definition
Expressed as nouns

Example:
Program: New plant Construction and start up
Project 1: Analytical study
Task 1: Marketing/Production study
Task 2: Cost Effectiveness Analysis
Project 2: Design and Layout
Task 1: Product Processing Sketches
Task 2: Product Processing blueprints
• How should I break down the project?

• By geographically separated areas for product or activities

• By major chronological time periods
• By structural, process, system, or device components
• By “intermediate” deliverables required in the production of the “end”
deliverables
• By separate areas of responsibility, departments, or functional areas
• By geographically separated areas for product or activities:

Rock Tour

Europe USA Asia

New York
City

October
15, 2011
• By structural, process, system, or device components:

Airplane

Pilot
HVAC Engine
Controls

AC

Refrigerants
• By “intermediate” deliverables required in the production of the “end”
deliverables:

Software

Requirements Prototype Products

Interface

Graphics
Action Plan:
In the hierarchical planning system, the objectives
are taken from the project plan. these objectives help in
identifying the set of required activities for the objectives to be
met, a critical part of the action plan. Each activity has a specific
outcome associated with it, and these activities are further
decomposed into sub activities and sub events, which in turn
are further sub divided.
 Action Plan

 
Deliverables
 

 
Measure
Accomplishment  

 
Key Constraints
 

Estimated Immediate  
Tasks Estimated Duration Assigned to
Resources Predecessors  

         
 Objective Career Day
Steps Responsibility Time Predecessor Resources
(weeks)
1. Contact Organizations
a. Print Forms Secretary 6 ----------- Print Shop
b. Contact Organizations Program manager 15 1.a Word Processing
c. Collect Display Information Office Manager 4 1.b
d. Gather College Particulars Secretary 4 1.b

Partial Action Plan for a

e. Print programs Secretary 6 1.d Print Shop
f. Print participant certificates Graduate Assistant 8 -------- Print Shop
2. Banquet and Refreshments

College Career Day

a. Select Guest Speaker Program manager 14 ---------
b. Organize Food Program manager 3 1.B Career
c. Organize Refreshments Director 10 1.b Purchasing
 Linear Responsibility Chart
Responsibility
WBS Project office Field Operations

Sub Project Task Project Contract Project Industrial Field Manager

manager Administrator Engineer Engineer

Determine A1
Need
A2

Solicit B1
Quotations

Write C1
Appropriate
Request
C2

C3

Legend
“ “ Notification Responsible Approval
Support
 Vice President

General Manager

Project Manager

Manager Engineering

Manager Software

Manager Manufacturing

Manager Marketing

Manufacturing
Subprogram Manager

Subprogram Manager software

Subprogram Manager Hardware

Subprogram Manager Services

Establish Project Plan 6 2 1 3 3 3 3 4 4 4 4

Define WBS 5 1 3 3 3 3 3 3 3 3

Establish Hardware Specs 2 3 1 4 4 4

Establish Software Specs 2 3 4 1 4

Establish Interface Specs. 2 3 1 4 4 4

Establish Manufacturing Specs. 2 3 4 4 1 4

Define Documentation 2 1 4 4 4 4

Establish Market Plan 5 3 5 4 4 4 1

Prepare Labor Estimates 3 1 1 1 4 4 4 4

Prepare Equipment cost estimates 3 1 1 1 4 4 4 4

1 Actual responsibility 2 General Supervision 3 Must be Considered
4 May
Prepare beCosts
Material Consulted 5 Must be notified
3 1 16 Final
1 Approval 4 4 4 4
Simplified Linear Responsibility Chart