Maddox Smith Staff asked 4 years ago

Managements

Q

Need to Solve below assignment. ASSIGNMENT: ———————— Consider the RedBus application system, consisting of the server software, smartphone apps, web-based interface, as well as the connectivity to payment gateways as well as bus operators’ systems. Assume that you are evaluating extending an old system that was built in-house using old technologies vs. outsourcing to a third party (assume that the third party have developed similar applications using latest technologies). The estimated cost is $2M for in-house vs. $2.3M for outsourcing. The functionality includes the following: 1. Smartphone clients for iOS, Android and Windows Phone platforms 2. Server that houses all the data and business logic 3. Connectivity to external systems (of bus operators) to pull in relevant data about their fleet o Assume that the cost incurred will be in Year 0 (i.e., before the new software can be deployed and any revenues can be recognized) o The projected incremental revenues over the next three years due to this proposed upgrade are: $1M, $1.5M and $2.5M respectively o Assume interest rate to be 10% per annum Questions: 1. Perform Cost Benefit Analysis using Net Present Value and Internal Rate of Return methods, and determine whether we should take up this project or not (for both scenarios – in-house as well as outsourcing). 2. Assuming that we decide to go ahead with the project, determine whether we should do it in-house or outsource it using a Decision Tree 1. Assume two scenarios with the following probabilities: i. Scenario 1: Traffic shoots up (with a probability of 60%), and in-house development can handle it better with an additional revenue of 20% per year, whereas outsourced development will result in a drop of 20% revenue ii. Scenario 2: Traffic is as per original projection (with a probability of 40%), in which case in-house development will yield 30% less revenues while outsourced development will yield 30% more revenues 1. Identify the “products” of the project and show the Product Breakdown Structure 2. Analyze the project characteristics and choose the development methodology (waterfall vs. incremental vs. agile) that is suitable for this project. List your reasons concisely. 3. Estimate the overall efforts for this project – show the methodology and steps used (e.g. COCOMO)