Chapter 5:

3. Exercise Figure 5.1 is a project WBS with cost apportioned by percentages. If the total project cost is
estimated to be $600,000, what are the estimated costs for the following deliverables?

a. Design

b. Programming

c. In-house testing

What weaknesses are inherent in this estimating approach?

Design cost: 40% of 600,000 = 240,000

Programming: 20% of 240,000 = 48,000
Implementation cost 50% of 600,000 = 300,000
In-house testing: 40% of 300,000 = 120,000
Some of the inherent weaknesses in this approach that This method is an extension to the ratio method.
Apportionment is used when projects closely follow past projects in features and costs. Given good
historical data, estimates can be made quickly with little effort and reasonable accuracy. This method is
very common in projects that are relatively standard but have some small variation or customization.
4. Firewall Project XT. Using the “complexity weighting” scheme shown in Table 5.3 and the function
point complexity weight table shown below, estimate the total function point count. Assume historical
data suggest five function points equal one person a month and six people can work on the project.

a. What is the estimated project duration?

Element Count Low Average High Total

Inputs 10 X2 20
Outputs 20 X6 180
Inquiries 10 X4 40
Files 30 X12 360
Interfaces 50 X15 750
Total 1290

b. If 20 people are available for the project, what is the estimated project duration?

= 12.9 month

c. If the project must be completed in six months, how many people will be needed for the project

= 43
Case 5.1 Sharp Printing, AG

1. At this point what would you do if you were the project manager?

Performing a detailed and in-depth analysis so that different constraints and risks are identified. This
helps the project manager to clearly understand and analyze the situation in the most effective manner.
Another option from the viewpoint of the project manager is to arrange a meeting with the top
management. This would help in identifying the company priorities specific to the project. The different
constraints associated with the project could be discussed collectively in the presence of top
management so that approval can be obtained and clarifications can be made regarding major decisions.

As per discussion with the top management, better efficient project scope can be prepared so that
actions can be taken as per plan.

Time is considered as one of the significant factors as the color printer is a technology where a short
delay could cause the rivals to introduce the same product with particularly low price that could make
the whole project valueless. Also, the time to market would be focused on. On the other hand,
performance is considered to be the critical factors in developing the product that also has reasonable
quality.

I would also use the work breakdown structure which would better assess the risks connected with the
cost and time of the project while inspiring the use time phased budget when conducting the
estimations. Lastly, I would also conduct a meeting with the project team in order to entail them the
revised budget estimate as well as revised work breakdown structure. I would also get their feedback
about the revisions. In case the project team becomes satisfied with the revised plan, I would continue
the project and also license the project.

2. Was top management acting correctly in developing an estimate?

Based on the analysis of the situation, it seemed that the senior administration has made the judgment
call by relying on the faulty and inaccurate information. The estimates prepared were not accurate
because the estimates about the cost and time was more than that estimated by the top management.
The top management has already fixed figures for time and cost. As the estimates generated were more
than that of the top management’s figures, they need to be revised.

3. What estimating techniques should be used for a mission critical project such as this?

Two kinds of estimation techniques can be used in this case:

Time Estimating / Cost Estimating

 The different techniques that can be used to perform Time Estimation are:

 Top down estimation – Involving senior management to get a high level estimation of the project.
 Bottom up estimation – after preparing WBS to get a detailed estimation based on activities.
 
the company must utilize both bottom-up and top-down methods in order to determine the necessities.
A top-down method which must be utilized is the consensus methodology. This method utilizes the past
experiences of senior management in order to give a rough knowledge about the time and cost which
the project might entail.

Other methods such as apportionment and ratio methods must not be used for the mission critical
projects. This is because these methods tend to rely largely on the information from previous projects.
As mission critical projects involve exploiting something which is never done beforehand, information
and data from previous projects would result in a flawed estimate.
Case 5.2 Post Graduation Adventure

1. Assume you are either Mike or Josh; how would you go about making a decision using project
management methodology?

Project management can be used for all different occasions such as the situation in this case. Traveling
takes a lot of planning. Same with the projects a company wants to complete and do right. Josh and
Mike must work together to plan a successful trip spending less than $3,500. Making a detailed plan
outlining a trip they want to take; they must communicate and agree on a plan that will work for the
both of them. Decision Making, If I were Mike or Josh in this situation, I would make sure we agree on
the location we want to travel to first. When you arrive, you must figure out where you want to sleep.
Finding the most cost-efficient hotel is the key here. Next would be a plan of action, including where we
are going to eat, how we are going to travel, and what activities we want to participate in.
Writing the meals, you plan to eat and restaurants you are going to attend have to be written down. You
can calculate how much you will spend on food at the market and money spent on dining out. This will
also include all the activities you plan on doing. When you have the exact amount of money you will
spend on transportation, this information will let you know how much traveling in the country you may
do. If you are using project management methods, you write a detailed list or a work breakdown
structure (WBS) finding the smallest detail or tasks that they both want to do. When you have a
mapped-out plan, they you can change accordingly to each other’s suggestions. We can prepare the
following:
- Work Breakdown Structure (WBS) – “deliverable oriented of the work to be executed by the
project team”.
- Deliverable-Based Work Breakdown Structure clearly demonstrates the relationship between
the project deliverables (i.e., products, services or results) and the scope
- Deliverable (Service) – planning the two-week vacation adventure
- Scope (Cost) – Comparing the Costs and determining which location will be affordable.

2. Looking first at only cost, what decision would you make?

The budget needs to be put together in order to verify that the funds available are going to be
enough to make the trip a reality. Because Mike and Josh have $3,500 each to spend on the trip, a cost
brake down of expenses needs to be put together. Airfare is more than likely going to be the most
expensive item of the trip. The cost of air fare is going to depend on their ability to pre-plan far enough
in advance to attain air fare at a reasonable rate.
Between Mike and Josh, they have a total $7,000 as a base for their budget. The first thing
that they need to decide is whether it is cheaper to fly to Vietnam or to South Africa, and which
one fits within the budgeted cost allotted for airfare. Mike and josh will need to develop a cost
list, which would include costs associated to their trip.
• Airfare
• Lodging
• Food
• Miscellaneous goods
Another consideration that has to be factored in is how they intend to spend their time
abroad. They have 14 days that they can be gone assuming that travel will consume four of those days,
they are left with 10 days that they need to factor lodging and food.

3. After cost, what other factors should be considered before making a decision?

- Planning for activities that are free would help them on a budgetary level.
- Developing a timeline for their travels should keep them on time and on task
- contingency plan to fall back onto in the event that something outside of the plan occurs
- COVID-19 – not all attractions will be open to visit
- Violence – possibility of being robbed or assaulted