A Methodology for Software Development Cost Analysis in Information-Based Manufacturing

The long lead-time response is always a problem for supply chain distribution systems, especially in the perishable food industry and rapidly advancing computer industry. The Internet common base environment can support suppliers and customers with on-line information and provide quick response time. This paper is based on a project between the New Jersey Institute of Technology (NJIT) and the Tropicana Juice Distribution Center in Jersey City, New Jersey. One goal of the project is to use information technology to automate the present system and thus shorten the response time from seven to three days. The existing structure uses Electronic Distribution Interface, fax, telephone or email to place orders. The project proposes an integrated Internet working environment for all the members of the supply chain. This paper focuses on the cost analysis of its related software that consists of in-house development and outsourcing. Activity Based Cost (ABC) and lifecycle engineering methods are used to catalog all the cost expenses to determine how much effort the software development takes.