Software Estimation

Cost estimation models are mathematical algorithms or parametric equations used to estimate the costs of a product or project. The results of the models are typically necessary to obtain approval to proceed, and are factored into business plans, budgets, and other financial planning and tracking mechanisms.

Cost estimation simply means a technique that is used to find out the cost estimates. The cost estimate is the financial spend that is done on the efforts to develop and test software in Software Engineering. Cost estimation models are some mathematical algorithms or parametric equations that are used to estimate the cost of a product or a project.

Value may also be expressed as a straightforward relationship between perceived benefits and perceived costs: Value = Benefits / Cost. The customers get benefits and assume costs. Value is thus subjective (i.e., a function of consumers' estimation) and relational (i.e., both benefits and cost must be positive values).