A company needs to develop a strategy for software product development for…
2016
A company needs to develop a strategy for software product development for which it has a choice of two programming languages L1 and L2.
The number of lines of code (LOC) developed using L2 is estimated to be twice the LOC developed using L1.
The product will have to be maintained for 5 years.
The parameters are given below:
Parameter | Language L1 | Language L2 |
|---|---|---|
Man years needed for development | LOC / 10000 | LOC / 10000 |
Development cost per man year | Rs. 10,00,000 | Rs. 7,50,000 |
Maintenance time | 5 years | 5 years |
Maintenance cost per year | Rs. 1,00,000 | Rs. 50,000 |
Total project cost includes both development and maintenance costs.
Find the LOC for L1 for which the total project cost using L1 equals the total project cost using L2 ?
- A.
10,000
- B.
5,000
- C.
7,500
- D.
75,000
Attempted by 169 students.
Show answer & explanation
Correct answer: B
Concept
A break-even (cost-equality) problem: model each option's TOTAL cost as a function of the same unknown, then set the two totals equal and solve. Here total cost = development cost + maintenance cost. Development cost = (man-years) × (cost per man-year), and man-years = LOC / 10000. Maintenance cost = (years) × (cost per year) and is independent of LOC.
Application
Let the LOC for L1 be x. Since L2 needs twice the LOC, the LOC for L2 is 2x.
L1 development cost = (x / 10000) × 10,00,000 = 100x.
L1 maintenance cost = 5 years × 1,00,000 = 5,00,000 (fixed, no x).
Total cost (L1) = 100x + 5,00,000.
L2 development cost = (2x / 10000) × 7,50,000 = 150x.
L2 maintenance cost = 5 years × 50,000 = 2,50,000 (fixed, no x).
Total cost (L2) = 150x + 2,50,000.
Set the two totals equal: 100x + 5,00,000 = 150x + 2,50,000.
Rearrange: 5,00,000 − 2,50,000 = 150x − 100x, so 2,50,000 = 50x.
Solve: x = 2,50,000 / 50 = 5000.
Cross-check
Substitute x = 5000 back. Total (L1) = 100(5000) + 5,00,000 = 5,00,000 + 5,00,000 = 10,00,000. Total (L2) = 150(5000) + 2,50,000 = 7,50,000 + 2,50,000 = 10,00,000. Both totals are Rs. 10,00,000, so the costs match exactly at x = 5000 LOC.