Project Cost Estimation

COCOMO
Project
A project is well-defined task, which is a collection of
several operations done in order to achieve a goal (for
example, software development and delivery).
Project Management
The application of knowledge, skills and tools on project
activities to complete a project in order to meet or
exceed the stakeholders needs or expectations from the
project.
Types of Projects
There are three main types of projects
Simple
A new project that is similar to previously completed
project is called a simple project
Average
A new project that have few functions similar to previously
completed projects and few new functions never been
developed will be called an average project.
Complex
A new project has such functionalities never been done by
the software house will be a complex project.
Cost Estimate
A cost estimate is the approximation of the cost of a
program, project, or operation.

The cost estimate is the product of the cost

estimating process.
Cost Estimation Process
Cost Estimation Methods
The most popular software project cost estimation
methods among all are as follows. 
Line Of Code (LOC)
Function Point (FP)
Backing Firing
Constructive Cost Model 1 (COCOMO 1)
Constructive Cost Model 2 (COCOMO 2)
New Line of Code (LOC)
Constructive Cost Model
The Constructive Cost Model (COCOMO) is an
algorithmic software cost estimation
model developed by Barry W. Boehm.
COCOMO1
COCOMO2
Barry Boehm introduced COCOMO2 in 1996 because
COCOMO1 was not able to cope the modern object
oriented development. COCOMO1 is no more used in the
Software industry but only used for academic and research
purposes.
COCOMO 1
Basic COCOMO compute software development effort
(and cost) as a function of program size. Program size is
expressed in estimated thousands of source lines of code
(SLOC, KLOC).
COCOMO 1
COCOMO applies to three classes of software projects:
Organic projects
"small" teams with "good" experience working with "less
than rigid" requirements
Semi-detached projects
"medium" teams with mixed experience working with a
mix of rigid and less than rigid requirements
Embedded projects
developed within a set of "tight" constraints. It is also
combination of organic and semi-detached projects.
Equations
The basic COCOMO equations take the form

Effort Applied (E) = ab(KLOC)bb [ man-months ]

Development Time (D) = cb(E)db [months]
People required (P) = Effort Applied / Development
Time [count]
Co-efficient value table
Example
A project estimation size is 24800 LOC and it is
accounting software. Calculate the effort in person
month and total time to develop it with the number of
people required to complete the project.
COCOMO2
We can estimate following in the beginning of the
project
• NOP(Number of people required)
• person-months effort
• Total project cost.
Efforts
Efforts are calculated in person month such as for
project A we have five people and effort require to
complete that project is 24 person month (pm). It
means that five people have to spend effort in a month
to complete the project equivalent to 24 people.
Complexity Factor Matrix
Estimated Complexity Factor
Count
    Simple Average Complex

No. of Screen * 1 2 3

Reports * 2 5 8

No. of Components * 1 1 10
Developer’s Experience and
Environment Maturity Matrix
COCOMO2 USED another matrix about the
developer’s experience, software development
environment maturity to measure the productivity
of the software house. The effort in person month
can be calculated by dividing the NOP with the
productivity.
i-e effort= NOP/productivity
Developer’s Experience and Environment
Maturity Matrix
Developer Experience Very Low Low Nominal High Very High

Software development Very Low Low Nominal High Very High

Environment
maturity
Productivity 4 7 13 25 50
Formula
NOP = OP * [(100 - % reuse) / 100]
(NOP: number of people)

OP = Estimated count * Complexity factor

(OP: Object Point)
Example Problem
A project has 24 screens, 16 reports and 80
components will be used during its development. It
is an average project in terms of software complexity.
The project has 70% reused component
development. The developer experience and
environment maturity are nominal. The software
house labor rate is $4000/month. Calculate NOP,
effort and total project cost.
Solution
OP = 24 * 2 + 16 * 5 + 80 * 1 =208

Reuse of component = 70% = 0.7

NOP = 208 *[(100 – 0.7)] / 100] = 206.544

Productivity = 13
 
Effort = NOP / Productivity = 206.544 / 13 = 16 person month.
Labor rate = 4000/month
Productivity = 13 NOP person month
Cost/NOP = Labor rate/productivity
= 4000/13
= 307.69
Cost = 307.69 * 206.544 = 63551.52