What is evib ic the expected value of payoff under this

Question

Question 1. There can be clashes among product/process/success/property models. For the following clashes, what are they? (for example: Product vs. process clash).

I) Waterfall vs. "I'll know it when I see it" (IKIWISI)
2) 4GL-based product vs. low development cost
3) Minimize cost and schedule vs. maximize quality ("Quality is free")
4) Waterfall vs. COTS-driven
5) Stable requirements vs. Frequent feature changes
6) Tightly scheduled transition vs. limited development budget and schedule
7) Golden Rule vs. Stakeholder Win-Win
8) Users' gold-plating vs. acquirers' limited budget and schedule

a) PD =Product; b) PC = Process; c) PP = Property; d) S = Success

Question 2. Short Answers (use bullet points, it should be short)

1) What is Hegelian hypothesis of human understanding in the article "A View of 200 and 21' Century Software engineering"? How Dr. Boehm extends the Hegelian hypothesis of human understanding to software Engineering Evolution

2) In the paper "Some Future Trends and Implications for Systems and Software Engineering Processes", Dr. Boehm mentioned that there is an increased emphasis on users and end value, what are its systems and software engineering process implications? Give three implications.

3) For a project size tradeoff analysis, what would be the relative change in total effort if the application was 400,000 SLOCS versus 200,000 SLOCS? Assume all scale drivers are rated nominal.

4) What is Model based Software Engineering?

Question 3. Lotu Company is considering the use of a Supply Chain Management (SCM) system to supply chain transactions, managing supplier relationships and controlling associated business processes to increase its sales and profits. The leading SCM vendor, SCMware, Inc., is offering a tailored version of their SCMware product at an up-front purchase price of $180K.

However, a new Lotu Company software employee, Bill Cleveland, has some experience with an•open-

source SCM framework package. He says, "Give me a team of smart people and I'll build us a SCM system that's less expensive than SCMware." Bill's manager works with Bill to develop a COCOMO II estimate of the likely development cost. Their COCOMO II inputs are:

• Adapt the SCM framework software which has 40 KSLOC
• AAF parameters: DM=20, CM=30, IM=30
• AT=O, AAA, SU=20, UNFM=0.5
• Scale exponent E=1.1
• Cost drivers all Nominal except for Very High ACAP, PCAP
• Cost/PM is $6K

a) cost of adapting the open source SCM framework package and developing the SCM system.

b) Is it a better option from a cost standpoint to adapt the open source SCM framework package and developing the SCM system than SCMware tailored product?

Question 4. There are two alternatives for the proposed TPS.

Alternative A: Acquire a vendor OS with a cost of $160K which has S=2000, P = 200, M = 80, T = 80,

 

Alternative B: in-house development of a transaction-oriented operating system which has a size of 12.5 KSLOC with S=2000, P = 40 M = 80, T = 80. The cost to develop such a software system is $363K.

Assuming a uniform cost of $10K per processor,

1) what is the best number of processors for each alternatives

2) what are the total costs for each alternative?

Question 5. A potentially risky situation involves the software for an experiment with a satellite. The experiment team understands the application well (experiments with satellites), however, is not very experienced with software development. The satellite platform manager has obtained an estimate that there is probability of 0.4 that the software will have a critical error that will wipe out the entire experiment and cause an estimated loss of the total investment in the experiment of $20 million. There are two major options for the manager for reducing the risk:

• Apply better development methods at negligible cost to the team (has been found with earlier experience) and manager estimates that this will reduce the error probability to 0.1.
• Hire a contractor to independently verify and validate the software at an additional cost of $500,000.
  Based on previous experience with this contractor, this will reduce the error probability to 0.04.

a) Determine the risk exposure for each of the choices and make a decision as to the path to take base on risk exposure of each choice.

b) Find the RRL for each risk reduction approach.

Question 6. Suppose you are the manger of CSU Inc., which has 6 analysts, 12 programmers, and access to 20 hr/day of computer time over the next year. You are offered the opportunity to develop a number of similar simulation models and operating system utilities for a large computer vendor. Each simulation model you develop will require 1 analyst, 1 programmer, and 4 hr/day of computer time and you will yield a profit of $25K. Each utilities you develop will require 1 analyst, 3 programmer, and 2 hr/day of computer time and you will yield a profit of $ISK. Your decision problem is to choose the number of simulation models and the number of utilities to develop, in order to maximize the total profit subject to the constraints imposed by your available number of analyst, programmers, and hr/day of computer time. Formulate the decision problem and determine the optimal solution and optimal value.

Question 7. Below are a set of activities involved in determining the appropriate mix of custom software

and commercial-off-the-shelf(COTS) software for an application. Each activity is also characterized by its duration in weeks and the predecessor activities which must be completed so that the activity can start.

Activity No.	Duration (weeks)	Predecessor Activities	Activity
A 1	2		Indentify, prioritize needed capabilities
A2	1		Identify, prioritize cost, schedule, and quality constraints
A3	3	Al, A2	Evaluate COTS alternatives
A4	2	Al, A2	Evaluate custom alternatives
A5	3	A3, A4	Evaluate mixed COTS/custom alternatives
A6	3	A5	Identify, resolve technical risks
A7	4	A5	Identify, resolve management risks
A8	2	A6, A7	Decide whether to proceed, which alternatives to elaborate
A9	1	A6, A7	Document results
		A8, A9	Finish

a) Draw the PERT chart for the set of activities. Determine the critical path, the early start time and the late start times, and the slack time for each activities.

b) If AS activity time is reduced to 2 (from 3), and AS is reduced to 2 (from 3) what are the critical paths and minimum completion time?

Question 8. UST made a $500K tool investment for the development of manufacturing control system (MCS) software in 1-year development and 4-year maintenance life cycle. The return from the $500K investment was a savings of $262K during development and an annual savings of $176K during maintenance.

Assumption:

• Tool investment and development savings are realized at the end of year 0 (consider as present value);
• Annual maintenance savings are realized at the end of year I, 2, 3 and 4;
• The interest rate r is 6% per year.

Year	0	I	2	3	4
Tool Investment Cost	$500K
Development Saving	$262K
Annual Maintenance Saving		$176K	$176K	$176K	$176K

Assuming an annual discount rate of 6%, perform a present value analysis, and determine the following in terms of present value

a) Net Present value of the project

b) ROI

c) Breakeven point

Question 9. XYZ Co. a manufacturer of mountain bikes, has two choices for its next year's product line:

Choice 1) Current (IA). Expand the production capability for the current product line, increasing profit by $2M.

Choice 2) Upscale (B3). Apply the expanded production capability to an upscale mountain bike. If the state of nature is favorable and there is a large market for upscale bikes, Sierra's profit will increase by $4M. If not, its profit will decrease by $1M. The probability of state of nature being favorable P(SS) x.60 and the probability of state of nature being unfavorable P(SF) is also 0.40.

a) Set up the payoff matrix for this situation and determine the preferred decision and expected value with no additional information.

b) Determine the breakeven probability of a favorable state of nature above which the Upscale decision is preferable.

c) (perfect information) However, XYZ company has an option to spend $0.5M to conduct a limited market test for the upscale mountain bike and if the state of nature is favorable, the upscale mountain bike will sell and we can proceed to the full production otherwise we will keep the current option. Compute the expected value with perfect information (EV perfection information) and EVPI.

Question 10. Given the following payoff table in choosing between a bold (BB) or a conservative approach in developing the special purpose operating system for the TPS.

Alternative	State of Nature
	Favorable	Unfavorable
BB(Bold)	200K	-100K
BC (Conservative)	80K	80K
Probability	P(SS) = 0.5	P(SF) = 0.5

We will do some investigation for information (such as prototyping) which cost 10 K to improve our

knowledge of the state of nature. However, we will not obtain perfect information. Two source of imperfection which can be express as probabilities

P(IBISF) = 0.10 - The probability that the investigation would lead us to choose the 1313 alternative, in a state of nature in which BB option will fail.

P(IBISS) = 0.95 - The probability that the investigation would lead us to choose the BB alternative, in a state of nature in which BB option will succeed.

a) What is EV(IB, IC), the expected value of payoff under this level of imperfect information.