Software Project Management and Engineering Economics
What the domain covers
This domain tests planning, estimation, scheduling, risk, and economic decisions. Expect work breakdown structures, critical path, PERT, COCOMO II, function points, earned value management, and make-or-buy or net present value reasoning.
Core rules
- A work breakdown structure decomposes deliverables into estimable work packages.
- The critical path is the longest dependent path; delaying it delays the project.
- Earned value uses planned value, earned value, and actual cost: CV = EV − AC, SV = EV − PV, CPI = EV/AC, SPI = EV/PV.
- Estimation should use historical data and explicit assumptions; COCOMO II and function points are model-based approaches.
- Economic analysis compares alternatives over time, including costs, benefits, and risk.
Worked example
PV = 100, EV = 80, AC = 90. CV = 80 − 90 = −10, so the project is over budget. SV = 80 − 100 = −20, so it is behind schedule. CPI = 80/90 ≈ 0.89; SPI = 80/100 = 0.80. Reasoning: negative variance and indices below 1 indicate unfavorable performance. Do not conclude the project is failing without context, but investigate cost and schedule causes.
Traps
- Confusing CPI with SPI.
- Using percent complete without earned value.
- Ignoring dependencies when scheduling.
- Comparing alternatives without discounting future cash flows.
Exam focus
Compute the metric, interpret its sign or ratio, and state a management action.