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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 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 • Function Point Analysis (FPA) - estimating by type, size, and quantity of entities • The MethodA matrix model for detailing the system’s components
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
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
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
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?
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
Phase 1 – Detailed Quantities List • Quick cost estimation during the initiation phase • Relatively exact quantities list at end of analysis phase
Price list for HR Phase 2 – Defining a Price List
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
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
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
Phase 3 – Comprehensive Estimate Subjective estimation Applying the certainty factors raised the costs by 15%
Check on R&D Costs Total should approximate 100% with allowance according to type of system
Check on Maintenance Costs Total for 5 years – 50-75% of complete R&D cost
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