IE5541-HW3

# A the estimated project duration is 12905x6 129030 43

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5 function point equals to one person a month and six people can work on this project. a. The estimated project duration is 1290/(5x6) = 1290/30 = 43 months. Therefore it will take 43 months for 6 people working in the project to finish it. b. If 20 people were working it would take them 1290/(5x20) = 1290/100 = 12.9 months or approximately 13 months. Therefore if 20 people were working it would take them about 13 months. c. Let P be the number of people needed to finish the project in 6 months. Number of months = Function point total / (5)(P) since number of months is 6 6 = 1290 /5P so P = 1290/(5*6) = 43. Therefore it will take 43 people the finish the project in 6 months. Exercise A5-1. A. Using 80 percent improvement and Table A5.1 the eight satellite should require 100,000 x 0.5120 = 51,200 labor hours. This could also be done using the following calculations: Page | 4

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HW3 IE5541 Sunny Ahmed Unit 1 takes 100,000 hours Unit 2 takes 100,000 x 0.8 = 80,000 hours Unit 4 takes 80,000 x 0.8 = 64,000 hours Unit 8 takes 64,000 x 0.8 = 51,200 hours. Thus unit 8 will take 51,200 hours. B. Using cumulative learning curve values from Table A5.2 we can calculate total time required for 8 units to be build. That will be 100,000 x 5.346 = 5,34,600 hours. C. Total labor cost for 8 prototypes will be 5,34,600 hours x 300/hour = 1,603,80,000 NOK R&D cost is 12,000,000 NOK and material is 6,000,000 NOK so direct cost is 1,603,80,000 +12,000,000 +6,000,000 = 1,783,80,000 NOK. Let the direct overhead to be 15%, therefore total direct costs to build prototypes = 1,783,80,000 + (1,783,80,000 x 15%) = 2,051,37,000 NOK. Assuming G&A cost to be 15% as well we get total cost to be 2,051,37,000 + (2,051,37,000 x 15%) = 2,359,07550 NOK. Profit considered to be 25% of cost therefore sell price would be 235907550 + (2,359,07550 x 25%) = 2,948,84,437.5 NOK or approximately 2,950,00,000 NOK. The price that should be asked for building 8 prototypes should be 2,948,90,000 NOK. This price includes 15% direct cost overhead which includes material and labor overhead. This percentage of direct overhead will differ from company to company and 15% is at a very modest value. This is done to cover any change in material or labor cost and also for shipping and handling that might be associated with bringing in the materials to the production facility. General and Administrative cost is at 15% of the total direct cost. This is also an estimate and may vary from company to company. Since this project involved a lot of research and labor I think 15% for both direct cost overhead and G&A overhead is very modest and in reality can be a lot more. The company expects a profit of at least 25% for all projects thus a 25% of the total cost is added to the price. Since, it is a prototype and things can go wrong and cost can
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