Part – B: Because the parameters used in mathematical models are frequently estimates, actual results may differ from those projected by the aforementioned mathematical analysis in Part-A. To account for some of the uncertainties which may exist in a problem, analysts often conduct sensitivity analysis. The objective is to assess how much a solution might change if there are changes in model parameters. Assume that the software development costs by outside firms might actually fluctuate by =15% from the $2.5 per-line estimate. Re-compute the breakeven points if the costs are 15 percent higher or lower (compute for both the cases) and compare your results with the original answer in Part A.
Part – B: Because the parameters used in mathematical models are frequently estimates, actual results may differ from those projected by the aforementioned mathematical analysis in Part-A. To account for some of the uncertainties which may exist in a problem, analysts often conduct sensitivity analysis. The objective is to assess how much a solution might change if there are changes in model parameters. Assume that the software development costs by outside firms might actually fluctuate by =15% from the $2.5 per-line estimate. Re-compute the breakeven points if the costs are 15 percent higher or lower (compute for both the cases) and compare your results with the original answer in Part A.
Algebra for College Students
10th Edition
ISBN:9781285195780
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter12: Algebra Of Matrices
Section12.4: Systems Of Linear Inequalities Linear Programming
Problem 39PS
Related questions
Question
need answer of part b only
![Question No. 4:
Part – A:
A leading firm requires a software for its internal use. The firm wants to evaluate whether it is
less costly to have its own programming staff and resources or to have programs developed by an
external development firm. The cost of both options are a function of the number of lines of
code. After the mathematical analysis it has been estimated that the in-house development will
cost $1.75 per line of code. In addition, annual overhead costs for supporting the program will be
$35000. While Software developed outside the firm costs, on average, $2.5 per line of code.
a) How many lines of code per year make costs of the two options equal?
b) If programming needs are estimated at 35000 lines per year, what are the costs of the two
options?
c) In part b what would the in-house cost per line of code have to equal for the two options to be
equally costly?
Part – B:
Because the parameters used in mathematical models are frequently estimates, actual results may
differ from those projected by the aforementioned mathematical analysis in Part-A. To account
for some of the uncertainties which may exist in a problem, analysts often conduct sensitivity
analysis. The objective is to assess how much a solution might change if there are changes in
model parameters. Assume that the software development costs by outside firms might actually
fluctuate by +15% from the $2.5 per-line estimate.
Re-compute the breakeven points if the costs are 15 percent higher or lower (compute for both
the cases) and compare your results with the original answer in Part A.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5558523d-8a5f-42f7-b95a-07931d7163a3%2F37ec45e7-3208-453d-9430-338114d01457%2Frbf08s_processed.png&w=3840&q=75)
Transcribed Image Text:Question No. 4:
Part – A:
A leading firm requires a software for its internal use. The firm wants to evaluate whether it is
less costly to have its own programming staff and resources or to have programs developed by an
external development firm. The cost of both options are a function of the number of lines of
code. After the mathematical analysis it has been estimated that the in-house development will
cost $1.75 per line of code. In addition, annual overhead costs for supporting the program will be
$35000. While Software developed outside the firm costs, on average, $2.5 per line of code.
a) How many lines of code per year make costs of the two options equal?
b) If programming needs are estimated at 35000 lines per year, what are the costs of the two
options?
c) In part b what would the in-house cost per line of code have to equal for the two options to be
equally costly?
Part – B:
Because the parameters used in mathematical models are frequently estimates, actual results may
differ from those projected by the aforementioned mathematical analysis in Part-A. To account
for some of the uncertainties which may exist in a problem, analysts often conduct sensitivity
analysis. The objective is to assess how much a solution might change if there are changes in
model parameters. Assume that the software development costs by outside firms might actually
fluctuate by +15% from the $2.5 per-line estimate.
Re-compute the breakeven points if the costs are 15 percent higher or lower (compute for both
the cases) and compare your results with the original answer in Part A.
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