A case study on cost estimation

A rough order of magnitude estimate can also be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge. The time frame for this type of estimate is usually three or more years prior to completion of the software project.

After developing a good resource requirements list, project managers and their software development teams must develop several estimates of the costs for these resources. During this time he did not perform any cost estimating.

There are several different tools and techniques available for accomplishing good cost estimation.

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His new responsibility was to coordinate all estimates for all divisions of Percy. Regardless of the cause, Percy can solve the problem. Software development project managers should prepare several types of cost estimates for most projects.

Three basic types of estimates include a rough order of magnitude or ROM, a budgetary estimate, and a definitive estimate.

A rough order of magnitude estimate provides an estimate of what a project will cost. However, the case study points to a lengthy and costly procedure used to generate accurate fixed price quotes. After a year in the project office, Paul was assigned to a small projects division.

This type of estimate is done at the early stages of a software development project, or even before a project is officially started.

In some cases, software development project managers will automatically double estimates for software development projects because of a history of cost overruns on information technology based projects.

To address this problem, Percy should consider a cost-plus contract format for the small projects division. Paul was promoted to a new position within the project office.

The first five projects could have been very similar to previous projects and Paul was able to use previous cost estimates to create his estimates. In addition, due to the duration that had passed since his previous role in the Manufacturing Division, the cost of materials or labor could have changed and Paul might have been unaware of the change.

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Percy issues fixed cost estimates for its projects, as indicated by the lengthy and costly procedure used to generate accurate quotes. However, the sixth project could have been very different and required a more thorough cost estimating procedure.

The case study also indicates that the small projects division is unable to afford the cost of the lengthy estimating procedure. The first five estimates that Paul created were accurate.

Project managers and upper level management use this type of estimate to help make project selection decisions. Many organizations develop budgets at least twoSoftware cost estimation errors are increasing in the automotive industry along with the number of software components in modern vehicles.

As the software cost estimation is an important and problematic part of project planning there is a need of process improvement to decrease estimation errors.

Cost Estimating Software Brings Efficiency to Capiq Engineering. Capiq found that with Costimator it was very easy to train new estimators, which immediately eliminated the issues they had keeping up with customers RFQ's.

Capiq Engineering, founded inis a world-class engineering organization located in Gujarat, India. A Case Study on Cost Estimation and Profitability Analysis at Continental Airlines Francisco J.

Román Introduction Inthe senior management team at Continental Airlines, commanded by Lawrence Kellner, the Chairman and Chief Executive Officer, convened a special meeting to discuss the firm’s latest quarterly financial results.

Aug 30,  · Case Study: Small Project Cost Estimating In the Kerzner () case study, Small Project Cost Estimating at Percy Company, Paul spends his first five years out of collage performing cost estimates for the Manufacturing Division of Percy Company.

In case of sequential project, it is the time from requirements and architecture time until enough construction has been completed to generate project productivity data that can be used for estimation. And in case of iterative projects, middle refers to the first two to four iterations- the iteration that occur before the project can confidently base its estimates.

A Case Study on Cost Estimation and Profitability Analysis at Continental Airlines Francisco J. Roma´n ABSTRACT: This case exposes students to the application of regression analyses to be used as a tool pursuant to understanding cost behavior and forecasting future costs using publicly available data from Continental Airlines.

A case study on cost estimation
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