1. An important aspect of any software project is to know how much it will cost. Software project estimation is one of the most important, critical and challenging activities in software project development. Effective planning and control is not possible without a sound and reliable estimate. In order to make accurate estimation and avoid gross misestimations, several cost estimation techniques have been developed over the years. Among all those techniques, estimations based on analogies stands to be more effective. 2. A fundamental question that needs to be asked about any software cost estimation method is how accurate and effective are the predictions. For more accurate estimates we need to perform a lot of calculations that will demand …show more content…
Over the past few years there have been considerable activity in the area of software project estimation with various effort estimation techniques. These techniques can be grouped into two major categories. I. Algorithmic Models II. Non algorithmic models The first category includes most popular techniques, which are illustrated by estimation models such as COCOMO (Constructive Cost Model), PUTNAM-SLIM and Function point analysis. All of the algorithmic models are derived by statistical and numerical data. Whatever is the form of model the generic form tends to be: E=aSb Where E is the effort, S is the size typically measured as lines of code (LOC) or function points, a is the productive and b is the economic parameter. Another approach is …show more content…
However, the most straightforward method is to assume a linear model, that is to set b to one and then use regression analysis to estimate the slope i-e a and possibly introduce an intercept so that the model becomes: E = a1 + a2S Where a1 represents fixed development cost and a2 represents productivity. Furthermore, there have been number of attempts to use regression and decision trees to predict aspects of the software engineering. Srinivasan and Fisher described that the results gained by decision tree and regression, outperformed COCOMO and SLIM but they were less effective then function point approach. Finally, there was some early work using a hybrid Case based Reasoning (CBR) and rule based system. The results of that approach were outstanding too but again they were based on statistical datasets. 4. Although, there are several efficient approaches but they all require enormous amount of effort and statistical data calculations. Since there is not much budget and time available for these sorts of activities, we need to have some approach that is less time consuming and more effective in terms of accurate
how applying six sigma methodology can do to address these problems. According to the author the two most common causes of software project failures are customer requirement problems and estimating problems. He offers two case studies as examples of how six sigma can address these aspects of software implementation. The first case study discusses some of the ways six sigma can help with customer requirements, and the second case discusses the role of six sigma in schedule estimating.
The t-test, http://trochim.human.edu/kb/stat_t.htm
Decision tree approach: This approach is suitable for projects that do not have to be funded all at one time. The alternatives, probability of payoffs are identified using diagrams which are simple to understand and interpret with brief explanation giving important insights. It identifies managerial flexibility to reevaluate decisions using new information and then either invest additional funds or terminate the project.
In order to make my calculations accurate enough to reach a valid
Time-phased project work is the basis for project cost control. Work package duration is used to develop the project network. Further, the time-phased budgets for work packages are timetabled to establish fiscal measures for each phase throughout the project. The time-phased budgets are to emulate the real cash needs of the budget, which will be used for project cost control. This information is useful to estimate cash outflows. The project manager's attention is on when the costs are to occur, when the budgeted cost is earned, and when the actual cost materializes. This information is made up to measure project schedule and cost variances (Gray & Larson, 2005). The following are typical types of costs found in a project:
Because the risk is determined by the degree of difficulty in the quantitative measures established for cost and schedule. The director or planner, and more powerful, the customer should understand and realized the reality of variability in software requirements means of instability in cost and schedule (Sommervill, 2009).
Project managers must take cost estimates seriously if they want to complete software projects within budget constraints. After developing a good resource requirements list, project managers and their software development teams must develop several estimates of the costs for these resources. There are several different tools and techniques available for accomplishing good cost estimation.
These estimates aim to determine the total costs and come into the wider field of cost planning. The use of this type of estimating would be brought about where a stringent requirement for cost control has been requested by the client. These estimates attempt to utilise ideas supported by Dysert (2006) that where uncertainty is present, a range of figures to represent the works rather than committing to a single point figure, would leave the client more informed about the scale of the project.
To determine the labour cost of a new style or order its SAM value is estimated and then multiplied to cost per minute and efficiency to get the actual labour cost.
To test the financial feasibility and plan acceptability, there must be information on the magnitude, and share of estimated project cost that are reimbursable. This information can be derived from cost allocation. Also where cost sharing is required in the multipurpose planning process cost allocation can be applied. Cost allocation also provides information necessary for allocating the real expenditures ensuring that the cost account are maintained in line with plan formulation and allocation principles during the subsequent c...
calculated from experimental data. It becomes of great importance at the moment when we don’t have
We can estimate the completion time of the project using this method and can reduce the factor of uncertainty by considering both the shortest and longest time calculation for the critical path.
"Both methods estimate overhead costs related to production and then assign these costs to products based on a cost-driver rate. The differences are in the accuracy and complexity of the two methods" (1) , Now we will discuss why ABC can result in more reliable products costs than conventional labor based product costing system . In recent years, the nature of industrial production has fundamentally altered; we will discuss their characteristics. First we have machine production and capital intensive, Now machines are the main tool and at the heart of production; labors maintain machines and supervise them, and machines are the ones that dictates the pace and rate of production. The second characteristic is high level of overheads relative to direct cost; in modern businesses they tend to use overheads in different ways for example: some products need engineering time and some products require machine time so that products will use overheads differently. The third characteristic is highly competitive international market, transportation including fast freight and relatively cheap; one of the advantages is the use of internet ensures that customers can easily and quickly reach and find products and also cheaply, this environment is highly competitive so companies need to know accurately their range of prices in order to use this information to gain competitive advantage over other
Others feel that ABC would be more widespread in industry if it were marketed better by the cost accounting profession itself [1]. As the dust has settled, ABC has turned out to be less a revolutionary technique than a useful refinement to proven systems. The costs of products and services must be accurate, or management can be misled. Decisions... ...
...pplied. Cost estimation and analysis could ultimately determine major decisions in both the business and political worlds today, and play a crucial role even in our day to day lives. Through activity based costing one is able to see what areas need improvement and also whether or not a business will be successful after considering all the factors. These tools are very powerful in drawing wise conclusions from cost analysis and can be a priceless tool to have even in the field of engineering.