Software Cost Estimation Using Economic Production Models

One ofthe major difficulties in controlling software development project cost overruns and schedule delays has been developing practical and accurate software cost models. Software development could be modeled as an economic production process and we therefore propose a theoretical approach to software cost modeling. Specifically, we present the Minimum Software Cost Model (MSCM), derived from economic production theory and systems optimization. The MSCM model is compared with other widely used software cost models, such as COCOMO and SLIM, on Journal of Management Information Systems I Summer 1998. Vol. 15, No. l.pp. 143-163. I ^ C 1998 ME. Sharpe, Inc. 0742-1222 / 1998 $9,50+ 0.00. 144 HU, PLANT, AND HERTZ the basis of goodness of fit and quality of estimation using software project data sets available in the literature. Judged by both criteria, the MSCM model is comparable to, if not better than, the SLIM, and significantly better than the rest ofthe models. In addition., the MSCM model provides some insights about the bebavior of software development processes and environment, which could be used to formulate guidelines for better software project management polices and practices.