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MethodCost

MethodCost. Cost Estimation. MethodCost. Cost Estimation is a complex task with no unanimous approach MethodCost bases cost estimation on an examination of the types of components in the project, their quantities and their complexity MethodCost is based on

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MethodCost

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  1. MethodCost Cost Estimation

  2. MethodCost • Cost Estimation is a complex task with no unanimous approach • MethodCost bases cost estimation on an examination of the types of components in the project, their quantities and their complexity • MethodCost is based on • Function Point Analysis (FPA) - estimating by type, size, and quantity of entities • The MethodA matrix model for detailing the system’s components

  3. MethodCost • MethodCost includes tools and templates for cost estimation at every phase of the project/system life cycle: • For the initiation phase - Quick cost estimation • For the analysis phase - Detailed cost estimation • For the maintenance phase - Cost estimation for changes and improvements • For the operation phase - Investigation and estimation of costs for systems that perform everyday production

  4. Est. by components of the sys tree SystemComponentTree 1. Goals2. Application3. Technology4. Implementation5. Cost Est.byLifeCyclePhases Itemest. Initiation Analysis Design Testing Maintenance Life Cycle MethodA matrix model for cost estimation

  5. Cost Matrix • Costs can be estimated by: • Columns – Life cycle phases • Rows – Components of the system tree • More detailed figures at the cell level • The appropriate matrix cells contain notes on topics and components to be priced as part of the project cost • Projects differ greatly, so from the all-inclusive matrix, not every topic will apply to every project

  6. Cost Estimation Process • Phase 1 – Prepare a Quantities List • Estimated quantities of resources required • Phase 2 – Define a Price List • For each cost item: • What is to be used • How is it measured • What is the unit cost?

  7. Cost Estimation Process • Phase 3 – Make a Comprehensive Estimate • Multiply listed quantities by listed prices • Apply certainty factors • Phase 4 – Calculate Costs (See Cost Calculation Kit) • Common denominator for estimate’s results • Mapping of costs along time axis

  8. Phase 1 – Detailed Quantities List • Quick cost estimation during the initiation phase • Relatively exact quantities list at end of analysis phase

  9. Price list for HR Phase 2 – Defining a Price List

  10. Phase 2 – Defining a Price List Price List Without HR As per the quantities list According to the organization’s budget clauses An auxiliary table could be included for the many components of a manufacturing environment

  11. Matched upby price codes Quantities list & price list meet at price code Phase 3 – Comprehensive Estimate Quantities List for HR Price List for HR Quantities List w/o HR Price List w/o HR

  12. Estimated cost of HR Certainty factor for HR Adjusted cost of HR = Estimated cost of tech Certainty factor for tech Adjusted cost of tech = Phase 3 – Comprehensive Estimate • Certainty factor calculated as per template • Use of the certainty factor

  13. Phase 3 – Comprehensive Estimate Subjective estimation Applying the certainty factors raised the costs by 15%

  14. Check on R&D Costs Total should approximate 100% with allowance according to type of system

  15. Check on Maintenance Costs Total for 5 years – 50-75% of complete R&D cost

  16. www.methoda.com Thank you

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