Table Categories Of Constraints

Time Cost Performance

A. One Element Fixed at a Time

A-1 Fixed Variable Variable

A-2 Variable Fixed Variable

A-3 Variable Variable Fixed

B. Two Elements Fixed at a Time

B-1 Fixed Fixed Variable

B-2 Fixed Variable Fixed

B-3 Variable Fixed Fixed

C. Three Elements Fixed or Variable

C-1 Fixed Fixed Fixed

C-2 Variable Variable Variable

Trade-offs are always based on the constraints of the project. Table 16-1 illustrates the types of constraints commonly imposed. Situations A and B are the typical trade-offs encountered in project management. For example, situation A-3 portrays most research and development projects. The performance of an R&D project is usually well defined, and it is cost and time that may be allowed to go beyond budget and schedule. The determination of what to sacrifice is based on the available alternatives. If there are no alternatives to the product being developed and the potential usage is great, then cost and time are the trade-offs.

Most capital equipment projects would fall into situation A-1 or B-2, where time is of the essence. The sooner the piece of equipment gets into production, the sooner the return of investment can be realized. Often there are performance constraints that determine the profit potential of the project. If the project potential is determined to be great, cost will be the slippage factor, as in situation B-2.

Non-process-type equipment, such as air pollution control equipment, usually develops a scenario around situation B-3. Performance is fixed by the Environmental Protection Agency. The deadline for compliance can be delayed through litigation, but if the lawsuits fail, most firms then try to comply with the least expensive equipment that will meet the minimum requirements.

The professional consulting firm operates primarily under situation B-1. In situation C, the trade-off analysis will be completed based on the selection criteria and constraints. If everything is fixed (C-1), there is no room for any outcome other than total success, and if everything is variable (C-2), there are no constraints and thus no trade-off.

Many factors go into the decision to sacrifice either time, cost, or performance. It should be noted, however, that it is not always possible to sacrifice one of these items without affecting the others. For example, reducing the time could have a serious impact on performance and cost (especially if overtime is required).

There are several factors, such as those shown in Figure 16-3, that tend to "force" trade-offs. Poorly written documents (e.g., statements of work, contracts, and specifications) are almost always inward forces for conflict in which the project manager tends to look for performance relief. In many projects, the initial sale and negotiation, as well as the specification writing, are done by highly technical people who are driven to create a monument rather than meet the operational needs of the customer. When the operating forces dominate outward from the project to the customer, project managers may tend to seek cost relief.

FIGURE 16-3. Trade-off forcing factors.
Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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