PROJECT REPORT

ON
“EVALUATE THE COST OF THE SOFTWARE PRODUCT
USING THE GIVEN EMIRICAL METHOD”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE AWARD OF DIPLOMA IN COMPUTER ENGINEERING

SUBMITTED TO MAHARASHTRA STATE BOARD OF

TECHNICAL EDUCATION,MUMBAI

SUBMITTED BY

Sr No. Name of Student(s) Enrollment no.

1. PRIYANKA WARUDKAR 23313400174
2. JAGRUTI GADADE 23313400178
3. RUCHIKA GAJBHIYE 23313400184
4. SHARAN ASEKAR 23313400187
5. TARANJEET SINGH SAGGU 23313400190

GUIDED BY : Miss. Prerna Kadu

1
 J D COLLEGE OF ENGINEERING & MANAGEMENT
(1201)

CERTIFICATE

THIS IS TO CERTIFY THAT THE PROJECT REPORT ENTITLED “EVALUATE THE COST OF THE
SOFTWARE PRODUCT USING THE GIVEN EMIRICAL METHOD”WAS SUCCESSFULLY
COMPLETED BY STUDENTS OF FOURTH SEMESTER DIPLOMA IN COMPUTER
ENGINEERING.

PRIYANKA WARUDKAR 23313400174

JAGRUTI GADADE 23313400178
RUCHIKA GAJBHIYE 23313400184
SHARAN ASEKAR 23313400187
TARANJEETSINGH SAGGU 23313400190

IN PARTIAL FULFILLMENT OF THE REQUIRMENTS FOR THE AWARD OF THE DIPLOMA IN

COMPUTER ENGINEERING AND SUBMITTED TO THE DEPARTMENT OF JD COLLEGE OF
ENGINEERING AND MANAGEMENT,NAGPUR WORK CARRIED OUT DURING A PERIOD OF
ACADMEIC YEAR 2023-2024 AS PER CURRICULLUM.

NAME OF GUIDE NAME OF HOD

(MISS.PRERNA KADU) (MR.SWAPNIL WARADE)

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 TEACHER EVALUATION SHEET FOR MICRO PROJECT

COURSE TITLE AND CODE:SEN (SOFTWARE ENGINERING(22413)

TITLE OF THE PROJECT: EVALUATE THE COST OF THE SOFTWARE PRODUCT USING
THE GIVEN EMPIRICAL METHOD

GROUP NO:07
Co’s Addressed by The Microproject:

CO4 Estimate The Size And Cost Of Software Product

MARKS:

ROL NAME OF MARKS MARKS TOTAL REMARK

L NO. STUDENTS FOR BASED ON MARKS
GROUP VIVA(04) (10)
WORK(06)
45) PRIYANKA
WARUDKAR
49) JAGRUTI GADADE
55) RUCHIKA GAJBHIYE
58) SHARAN ASEKAR
61) TARANJEETSINGH
SAGGU

NAME AND SIGNATURE OF FACULTY :MISS.PRERNA KADU

SIGN: 

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 INDEX

Sr. CONTENTS PG NO.

No.
1. ABSTRACTS 5
2. INTRODUCTIONS 6
3. MODULES 7
4. FLOWCHART 9
5. ADVANTAGES 10
6. DISADVANTAGES 11
7. REQUIREMENTS 12
8. CONCLUSION 14
9. REFERENCES 15

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 ABSTRACT

Software Cost Estimation Is The Process Of Predicting The Effort Required To Develop A Software

System.Many Estimation Models Have Been Proposed Over The Last 30 Years . This Paper Provides A

General Overview Of Software Cost Estimation Methods Including The Recent Advanced In The Field

As The Number Of These Models Are Rely On a Software Size Estimation As Input, We First Provide

An Overview Of Common Size Matrices. We Than Highlight The Cost Estimation Modals That Have

Been Proposed And Used Successfully. Modals May Be Classified Into Two Major Categories:

Algorithmic & Non Algorithmic. Each Has Its Own Strengths And Weakness. A key Factor in Selecting

a Cost Estimation Modal Is the Accuracy of It’s Estimates. Unfortunately, Despite The Large Body Of

Experience With Estimation Modals, The Accuracy Of These Modals Is Not Satisfactory. The Paper

Includes Comments On The Performance On The Estimation Models And Description Of Several

Newer Approaces To Cost Estimation.

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 INTRODUCTION

In Recent Years Software Has Become The Most Expensive Component Of Computer System Projects. The Bulk Of

The Cost Of Software Development Is Due To The Human Effort And Most Cost Estimation Methods Focus On This

Aspect And Give Estimates In Term Of Person Months. Accurate Software Cost Estimates Are Critical To Both

Developers And Customers. They Can Be Used For Generating Request For Proposals, Contract Negotiations,

Scheduling, Monitoring And Control . Underestimating The Costs May Result In Management Approving Proposed

Systems That Then Exceed Their Budgets, With Underdeveloped Function And Poor Quality And Failure To

Complete On Time . Overestimating May Result In Too Many Resources Committed To The Project Or During

Contract Bidding, Result In Not Winning The Contract, Which Can Lead The Loss Of Jobs.

Accurate Cost Estimation Is Important Because:

 It Can Help ToClassify And Prioritize Development Projects With Respect To An Overall Business Plan.

 It Can Be Used To Determine What Resources To Commit To The Project And How Well These Resources

Will Be Used.

 It Can Be Used To Access The Impact Of Changes And Support Re-Planning.

 Projects Can Be Easier To Manage And Control When Resources Are Better Matched To Real Needs.

 Customers Expect Actual Development Costs To Be In Line With Estimated Costs. Software Cost

Estimation Involves The Determination OF One Or More Of The Following Estimates:

1. Efforts (Usually In Person-Months)

2. Project Duration (In Calendar Time)

3. Cost (In Dollars)

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 MODULES

 Empirical Estimation Technique:

Empirical estimation is a technique or model in which empirically derived formulas are used for

predicting the data that are a required and essential part of the software project planning step. These

techniques are usually based on the data that is collected previously from a project and also based on

some guesses, prior experience with the development of similar types of projects, and assumptions. It

uses the size of the software to estimate the effort. In this technique, an educated guess of project

parameters is made. Hence, these models are based on common sense. However, as there are many

activities involved in empirical estimation techniques, this technique is formalized. For example:

Delphi technique and Expert Judgement technique.

 Heuristic Technique:

Heuristic word is derived from a Greek word that means “to discover”. The heuristic technique is a

technique or model that is used for solving problems, learning, or discovery in the practical methods

which are used for achieving immediate goals. These techniques are flexible and simple for taking

quick decisions through shortcuts and good enough calculations, most probably when working with

complex data. But the decisions that are made using this technique are necessary to be optimal. In

this technique, the relationship among different project parameters is expressed using mathematical

equations. The popular heuristic technique is given by Constructive Cost Model (COCOMO). This

technique is also used to increase or speed up the analysis and investment decisions.

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 Analytical Estimation Technique

Analytical estimation is a type of technique that is used to measure work. In this

technique, firstly the task is divided or broken down into its basic component operations

or elements for analyzing. Second, if the standard time is available from some other

source, then these sources are applied to each element or component of work. Third, if

there is no such time available, then the work is estimated based on the experience of the

work. In this technique, results are derived by making certain basic assumptions about the

project. Hence, the analytical estimation technique has some scientific

basis. Halstead’s software science is based on an analytical estimation model.

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 FLOWCHART

Cost Estimation Models

Empirical Analytical
Heuristic
Estimation
Technique
Estimation
Technique Technique

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 ADVANTAGES

 Enhanced Accuracy:

Using Cost Estimation allows for a more accurate allocation of overhead costs to cost
objects. By linking costs to specific activities or factors that drive them, businesses can
avoid arbitrary allocations that may lead to distortions in product or service costs. For
example, if a company produces multiple products with different production processes,
Cost Estimationrates can help assign overhead costs more precisely to each product,
reflecting their actual resource usage.

 Improved Decision Making:

Accurate allocation of overhead costs can provide valuable insights for decision-
making. By understanding the true cost drivers behind different products or
services, businesses can make informed decisions regarding pricing, product mix,
process improvements, and resource allocation. For instance, if a company
identifies that certain products consume a disproportionate amount of overhead
resources, they can strategize accordingly to optimize their profitability.

 Transparency and Accountability:

Cost Estimation promotes transparency and accountability within an organization. By

clearly identifying the factors that contribute to overhead costs, businesses can create a
more transparent cost structure, enabling better communication and understanding
among stakeholders. This transparency also facilitates accountability, as it becomes

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easier to track and evaluate the performance of cost objects based on their actual
usage of resources.

DISADVANTAGES

 Complexity :

Implementing Cost Estimation can be a complex process, especially for organizations

with diverse product lines and numerous cost drivers. Identifying and quantifying the
appropriate cost drivers requires careful analysis and data collection, which can be time-
consuming and resource-intensive. Additionally, maintaining the accuracy of Cost

Estimationrates over time also requires ongoing monitoring and adjustments.

 Subjectivity and Estimation:

Determining the most suitable Cost Estimation often involves some level of subjectivity
and estimation. Businesses must make assumptions and judgments when selecting the
cost drivers and assigning costs to them. These subjective decisions can introduce biases
and potentially lead to inaccurate cost allocations. It is crucial to regularly review and
validate the chosen cost drivers to ensure they still reflect the actual resource
consumption patterns.

 Potential for Misinterpretation:

Cost Estimation Can Be Ministerpreted If Not Communicated Properly. If Stakeholders

Do Not Fully Understand The Rationals And Methodology Behind The Allocations.They

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May Question The Fairness And Accuracy Of The Result .Clear And Effective
Communication Is Essential To Avoid Misunderstanding And Maintain Trust In The
Cost Allocation Process.

REQUIREMENTS

 Required Inputs To The Estimate Costs Process:

1. Scope Baseline:

The scope baseline acts as a written agreement of the expectations and requirements
of the project stakeholders. It is referenced throughout the project to monitor progress
and measure actual vs. planned results. The scope baseline can only be modified
through a formal change control process.

2. Project Schedule:

A project schedule indicates what needs to be done, which resources must be utilized,
and when the project is due. It's a timetable that outlines start and end dates and
milestones that must be met for the project to be completed on time.

3. Human Resource Plan:

Human resource planning is a process that identifies current and future human
resources needs for an organization to achieve its goals. Human resource planning
should serve as a link between human resource management and the overall strategic
plan of an organization.

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4. Risk Register:

A risk register is a document that is used as a risk management tool to identify

potential setbacks within a project. This process aims to collectively identify analyze,
and solve risks before they become problems.

5. Enterprise Environmental Factor:

Enterprise environmental factors in project management knowledge are the factors

that originate from outside of the project or organization. These factors will impact
projects, programs or portfolios.

6. Organizational Process Assests:

An organizational process asset is a tangible resource that's used to guide the
management of an organization's projects and operations. These tangible assets can
be templates, contracts, processes, reports and financial statements which are usually
managed by the project management office (PMO).

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 CONCLUSION

Today, Almost No Model Can Estimate The Cost Of Software With High Degree Of
Accuracy. This State Of The Practice Is Created Because:

1. There Are A Large Number Of Interrelated Factors That Influence The Software
Development Process Of A Given Development Team And A Large Number Of
Project Attributes ,Such As Number Of User Screens, Volatility Of System
Requirements And The Use Of Reusable Software Components

2. The Development Environment Is Evolving Continously.

3. The Lack Of Measurement That Truely Reflects The Complexity Of A Software

System.To Produce A Better Estimate,We Must Improve Our Understanding Of
These Project Attributes And Their Casual Relationships,Model The Impact Of
Evolving Environment ,And Develop Effective Ways Of Measuring Software
Complexity.

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 REFERENCES

1. Abdel-Hamid. T.. and Madnick, S. Impact of schedule estimation on software project

behavior. IEEE Softw. 3,4 (July 19861, 70-75.

2. Albrecht, A.J. Measuring application development productivity. In Proceedinns of fhe

IBM Applications Development Symposium, GUIDE/ SHARE (Goiterey, Calic,‘Oct.
14-17).

3. IBM, 1979,‘pp. 83-92. Albrecht. A.J.. and Gaffney. J., Jr. Software function, source lines
of code, and development effort prediction: A software science validation. IEEE Trans.
Softw. Eng. SE-g, 6 (Nov. 1963), 639-646. Behrens. CA. Measuring the productivity of
computer systems development activities with Function Points.

4. IEEE Trans. Softw. Eng. SE-g, 6 (Nov. 1963). 646-652. Boehm, B.W. Software
Engineering Economics. Prentice-Hall, Englewood Cliffs, N.J.. 1981. Brooks, F.P. The
Mythical Man-Month. Addison-Wesley, Reading. Mass.. 1975.

5. Call&m, H., and Colborne, S. A proposed method for estimating software cost from
requirements. J. Parmetrics 4,4 (Dec. 1984), 33-40.

6. Conte. S., Dunsmore, H.. and Shen, V. Software Engineering Metrics and Models.
Benjamin/Cummings, Menlo Park. Calif., 1986.

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