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Software Cost and Effort Estimation in Software Engineering Process

Software Cost and Effort Estimation in Software Engineering Process

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Published by Taqi Shah

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Published by: Taqi Shah on Jun 17, 2012
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BY: Taqi Shah Page 1
Table of Contents
............................................................................................................................ 63.1.4. Price-to-Win Model ............................................................................................................................. 63.1.5. The Definitive Estimate (or bottom-up estimate) ............................................................................... 73.1.6. The Budget Estimate (or top-down estimate) ..................................................................................... 73.1.7. Reserve Analysis: ................................................................................................................................. 73.2. Algorithmic methods .................................................................................................................................... 73.2.1. Cost factors .......................................................................................................................................... 83.2.2. Linear models ...................................................................................................................................... 83.2.3. Power function models ....................................................................................................................... 83.2.4. COCOMO 1 .......................................................................................................................................... 83.2.5. COCOMO 2 ........................................................................................................................................ 114. Effort Estimation? ............................................................................................................................................... 135. Why Effort Estimation? ....................................................................................................................................... 136. How Effort Estimating? ....................................................................................................................................... 136.1. Deductive or Top-down Methods .............................................................................................................. 156.2. Inductive or Bottom-up Methods .............................................................................................................. 156.2.1. Factor Analysis: .................................................................................................................................. 156.2.2. Multiplication Method: ..................................................................................................................... 156.2.3. Analogy Method: ............................................................................................................................... 156.2.4. Function Point Method: .................................................................................................................... 166.2.5. Delphi Method: ................................................................................................................................. 16
 
BY: Taqi Shah Page 2
1.
 
What is Costs Estimation?
In a book '
How to be a Better Project Manager'
,
Trevor L Young
defines estimating as;
"
A decision about how much time and resource are required to carry out a piece of work to acceptable standardsof performance.
"
 And Cost Estimate as;
The process of forecasting a future result in terms of cost, based upon information available at the time.
"
 Projects normally have a budget, and continual cost estimation is necessary to ensure that spending is in line withthe budget. Accurate software cost estimates are critical to both developers and customers. It answers thequestions what are the costs associated with the effort required to produce each major deliverables, what are thecosts associated with hardware and software, what other non-labor costs need to be considered, and whatoperating costs need to be considered and identified.
1.1.
 
Types of Cost Estimate
Cost estimates fall into two groups: conceptual estimates and detailed estimates. Each can be broadly defined asfollows:
1.1.1.
 
Conceptual Estimate
Conceptual estimating or parametric estimating is the process of establishing a project’s cost, often before any
graphical representation of a facility has been developed.
1.1.2.
 
Detailed Estimate
The detailed construction estimate is the product of a process whereby the cost of a proposed construction projectis predicted. The estimate is prepared by breaking down the items of work in an orderly and logical basis,determining the cost of each item from experience, and summarizing the total.
2.
 
Why Costs Estimation?
IT suffers from a universal law
: the first-time, first-use penalty
. The concept of the first-time, first-use penalty isthat it's next to impossible to accurately estimate the cost of something that has never been attempted. IT is sounique, so multifaceted, and has so many fronts that the constant movement of its variables creates a love-haterelationship for any organization trying to create an IT cost estimate.
 
Management asks, "Would you like more time?" We respond, "Thank you, no. I'll take some M-O-N-E-Y."
 
Customers offer, "Would you like to reduce the scope?" We answer, "Thank you, no. I'll take some M-O-N-E-Y."
 
Sponsors demand a speedier schedule. We respond, "Thank you, no. I'll take some M-O-N-E-Y."
 
BY: Taqi Shah Page 3
From IT to construction, most projects have to purchase materials: routers and cables, shingles and cement, and soon. We almost always must buy some things to complete the project work.Regardless of scope or schedule, projects need funds to complete the work. Technically, even projects that useonly labor have funds attached to them; someone, somewhere is paying for that labor. What happens if you don'thave the correct amount of funds to complete the project scope? Your project is doomed.
 
The ultimate goal of cost estimation is to determine the amount of fixed and variable costs so that a costequation can be used to predict future costs. The function that represents the equation of a line willappear in the format of:
y = m x + b
Where y = total costm = the slope of the line, i.e., the unit variable costx = the number of units of activityb = the y-intercept, i.e., the total fixed costs
 
To avoid project cost overruns.
 
Minimizing the differences between preliminary project planning cost estimates and final project designcost estimates.
 
Accurate cost estimation is important because It can help to classify and prioritize development projectswith respect to an overall business plan.

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