The overall process of developing a cost estimate for software is not different from the process for estimating any other element of cost. There are some terms which are specified for cost estimation of project only. The cost of the project is estimated according to the nature of the software. The estimating is a process in which the project team carefully see thoroughly the listing of the resources that will be needed in completing a project.
Estimation techniques are used for a number of purposes. These include:
- Budgeting: the primary but not the only important use. Accuracy of the overall estimate is the most desired capability.
- Tradeoff and risk analysis: an important additional capability is to illuminate the cost and schedule sensitivities of software project decisions (scoping, staffing, tools, reuse, etc.).
- Project planning and control: an important additional capability is to provide cost and schedule breakdowns by component, stage and activity.
- Software improvement investment analysis: an important additional capability is to estimate the costs as well as the benefits of such strategies as tools, reuse, and process maturity.
The estimation describes:
- What it cost in terms of how much work is required?
- How long it will take for assigned number of people?
- A curve that shows he relationship between people and time.
- Which inputs and assumptions had the greatest effect?
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For calculating the cost estimation process the following inputs are necessary to be there:
- Activity list.
- Activity attributes.
- Organisational process assets.
- The enterprise environmental factors.
- Project management plan and
- The resource availability.
The rules for cost estimations are as follow:
- Estimation shall be always based on the software requirements.
- Estimation shall be based on expert judgment.
- Estimation shall be based on previous projects.
- Estimation shall be based on metrics.
- Estimation shall never forget the past.
- Estimation shall be recorded.
- Estimation shall be supported by tools.
- Estimation shall always be verified.
The tools used for cost estimation are:
- Expert judgment.
- A complete alternatives analysis.
- The use of published estimating data.
- Project management software.