COST ESTIMATION

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Advanced Cost Estimation

Roger Warburton

SOFTWARE PROJECT LIFE CYCLE

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THE CASSANDRA PROJECT

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CUMULATIVE VS INSTANTANEOUS

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THE CUMULATIVE VERSION

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Final Budget??

PROJECTION

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THE REALITY IS USEFUL

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Peak => Good Forecast

CONSTRUCTION LABOR PROFILE

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0

10

20

30

40

50

60

70

80

90

0 5 10 15 20 25 30 35

2/eT 4/3 eT eT

THE CASSANDRA PROJECT

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CASSANDRA ACTIONS

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Calibration => Same CurveProject completion timeCost EstimateProblems ….

CASSANDRA LESSONS

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Plan for project Hardware & Software Interfaces

Data does not lie Don’t hide the truth

Early diagnosis gives you optionsCreative SolutionsUnmarried engineers to Seattle

MACRO

COST ESTIMATION

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UPS 2 DAY RATES FOR 150 LB.

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UPS 2 DAY RATES FOR 150 LB.

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< 200 miles:< 200 miles: Cost = $90.00Cost = $90.00

TRANSPORTATION COSTS

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– Truck Load: $0.10 per ton-mile

– LTL: $0.31 per ton-mile

– Small Package:

– 3X LTL rates

– More for express

– Rail: 50 - 80% of TL rates

MACRO COST ESTIMATION

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Top Down (from the Project) External (Known?) Parameters Historical Data & Similarity Experienced Estimator Empirical Equation + Parameters Internal & External Effects

Every Industry has oneMuseums Exhibits Floors & Walls

MACRO COST: DISADVANTAGES

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EarlyUncertainDealing with uncertainty

Problem:How much will this cost?

Once published, “FIXED”

COST INCREASES DUE TO HANDICAP ACCESSIBILITY IN PUBLIC BUILDINGS

18Schroeder and Steinfeld (1979) The estimated cost of accessible buildings. US Department of Housing and Urban Development.

Renovation Design

Convention hall 0.12% 0.02%

Town Hall 0.20% 0.05%

College Classroom 0.50% 0.13%

Shopping center 0.22% 0.006%

MACRO COSTS SUMMARY

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Customer wants to knowYou need a budget

Necessary EvilUsefulness Under-ValuedAccuracy σ