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(a) List three strategies that can be
used to deal with poor estimates? [3]
(b) Soft Solution is a popular software
development house. The company has been offered the opportunity to
develop two software products for their clients. The company wishes
to decide which project will give them a greater profit and has decided
to use the top-down parametric approach to choose between the projects.
For Project A, the development time is estimated to be 2 years. The
start up
costs are estimated to be higher at $150,000, but salary costs are
estimated to be lower at $40,000 per year increasing at a rate of
12% a year over the lifetime of the project.
For Project B, the development time is estimated to be 3 years. The
initial costs are estimated to be higher at $180,000, but salary costs
are estimated to be $28,000 per year, increasing at a rate of 15%
a year over the lifetime of the
project.
Express these relationships between start-up and annual costs for
projects A and B in the form Y=ma x +b, where X is the time in years
after the start of
development, and Y is the cost per year of the project. Determine
the constants m, a and b for each project, and use them to calculate
the total cost of each project. Determine which of the projects the
company should undertake. [12]
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