Original Post Date: Wednesday, September 25, 2013

Introduction/Problem Statement

A current client has expressed interest in the default values on the simple vs. the detailed input sheet. More specifically the question arose because this particular customer as well as others had a misconception about the simple vs. the detailed input sheet default values. Most users did not realize that if they were only inputting values on the simple input sheet that the detailed input sheet default values were still be used in the calculation for their cost estimate.

So the question became how much are each of these default value inputs on the detailed input sheet adding into my cost estimate? Furthermore, what is the percentage change in cost if I mined/maxed those values that are default on the detailed input sheet for a Hardware or the Software component?

To answer this question I had to define ground rules and assumptions (GR&A). GR&A are very important in this case because the PRICE models are mathematical models in which all the algorithms and Cost Estimating Relationships (CERs) are interconnected and correlated. This means statistically that there could be an infinite number of possibilities in outcomes for how one input could affect the cost estimate based on the other inputs and how the Product Breakdown Structure (PBS) was built.

Ground Rules and Assumptions (GR&A):

  • Only performing analysis on a Hardware and Software component. No COTS, Assembly, System, IT or any other cost object. No analysis on a built PBS.
  • Excluding lifecycle costs - Adding Operations and Support to a development or production estimate would have a substantial cost impact to the estimate.  Basically adding the last phase of the lifecycle.
  • Lastly, we are only addressing inputs that have a default values (Input with a value). All other inputs were not considered.
  • Left all other Default values constant and varied one input at a time on both simple and detailed input sheet from min to max.


In this analysis what I found was that there were really not that many default values on the detailed input sheet for either component HW/SW. Most of the inputs that contained a default value were on the simple sheet for both components. The high level analyses for both are below:


Hardware Component

In total there are 32 inputs excluding lifecycle on the HW component. 14 of those 32 are on the detailed input sheet and 10 out of the 14 have default values. However further analysis proved 7 out of the 10 default values on the detailed input sheet required other inputs on the simple sheet to have a value before they added any cost impact to the estimate.

More importantly merely 3 inputs on the detailed input sheet that contained default values based on my analysis could have a substantial cost impact on the estimate. Otherwise all the Simple input sheet inputs were the main cost drivers.

Software Component

In total there are 44 inputs excluding lifecycle on the SW component. 34 are on the detailed input sheet, however most of these have to do with code; Reused, deleted, auto translated, auto generated, adapted, etc. None of these contain default values but if you have information on this break out of code for your cost estimate they should always be included and broken out into the appropriate classifications.

Out of the 34 inputs 15 have default values. Out of those 15 based on my analysis only 6 inputs could have a significant or substantial cost impact on an estimate again based on my current assumptions.

This again is based on my Ground Rules and Assumptions listed above. This will not apply to every estimate. Each estimate is unique, that’s the art part of estimating and fun part. So given a different set of parameters you could find a very different answer.

More importantly the main drivers of the model the core relationship is contained on the simple inputssheet but of course the more information and data you have to refine your estimate the better estimate you will have to present.

I have continued to investigate this analysis and in my newsletter I have provided detailed charts and information pertaining to this analysis. We are always looking for Q&A to better serve you, please let me know your thoughts.