1 The Use of Simulation Techniques for Hybrid Software Cost Estimation and Risk Analysis Michael Kläs, Adam Trendowicz, Axel Wickenkamp, Jürgen Münch Nahomi Kikuchi Yasushi Ishigai Fraunhofer Institute for Experimental Software Engineering Fraunhofer-Platz 1 67663 Kaiserslautern, Germany +49-631-6800-0 {michael.klaes; adam.trendowicz; axel.wickenkamp; juergen.muench} @iese.fraunhofer.de Oki Electric Industry Co., Ltd. 1-16-8 Chuou, Warabi-shi, Saitama 335-8510, Japan +81-48-431-7211 kikuchi386@oki.com Information-technology Promotion Agency Software Engineering Cen- ter 2-28-8 Honkomagome, Bunkyo-Ku, Tokyo, 113- 6591, Japan +81-3-5978-7543 ishigai@ipa.go.jp ABSTRACT Cost estimation is a crucial field for companies developing software or software-intensive systems. Be- sides point estimates, effective project management also requires information about cost-related project risks, e.g., a probability distribution of project costs. One possibility to provide such information is the application of Monte Carlo simulation. However, it is not clear whether other simulation techniques ex- ist that are more accurate or efficient when applied in this context. We investigate this question with CoBRA ® 1 , a cost estimation method that applies simulation, i.e., random sampling, for cost estimation. This chapter presents an empirical study, which evaluates selected sampling techniques employed within the CoBRA ® method. One result of this study is that the usage of Latin Hypercube sampling can improve average simulation accuracy by 60% and efficiency by 77%. Moreover, analytical solutions are compared with sampling methods, and related work, limitations of the study, and future research direc- tions are described. In addition, the chapter presents a comprehensive overview and comparison of exist- ing software effort estimation methods. Keywords Cost estimation, CoBRA ® , simulation technique, empirical evaluation. TABLE OF CONTENT Abstract ....................................................................................................................................................... 1 Table of Content ......................................................................................................................................... 1 1. Introduction ......................................................................................................................................... 3 2. Background ......................................................................................................................................... 5 1 CoBRA is a registered trademark of the Fraunhofer Institute for Experimental Software Engineering (IESE), Kaiserslautern, Germany. Reference: Michael Kläs, Adam Trendowicz, Axel Wickenkamp, Jürgen Münch, Nahomi Kikuchi, Yasushi Ishigai. Advances in Computers, volume 74, chapter The Use of Simulation Techniques for Hybrid Software Cost Estimation and Risk Analysis. Elsevier, 2008. DOI: 10.1016/S0065-2458(08)00604-9 URL: http://www.sciencedirect.com/science/article/pii/S0065245808006049