SSE674Project4-RLP

=Risk Leverage Plan =


 * Purpose:** This Document compares the corrective actions or resolutions to the software flow problem. Comparisons are done using the risk leverage approach.






 * Situation:** The repair software has a problem with its user friendly aspect. The developers didn’t receive enough input from the technicians when designing the integrated/automated repair guides. As a result the technicians claim that there is a 50% probability that the current software will slow down their productivity by 35%.

NERD Business Profit Model – on average repair charge is $50.00. NERD receives 40% of each repair charge, and receives $2M annually from Dapple. Projected number of units to repair is 200,000 units per year.

> Potentially, $36M. > Cost = $0
 * Ideal situation:** $2M + $20.00 * 200,000 = $6M Annually with additional five year contract with overall success.


 * Current situation:** $2M + 20.00 * 200,000(0.65) = $4.6M Annually with no five year contract extension, because technicians cannot meet required turnaround time.

> Potentially, $4.6M. > Cost = $31.4M > Risk Exposure = 0.5 * 31.4M = 15.7M > Risk Exposure is Risk Exposure before option actions


 * Option A:** Redesign the software to optimize the repair process using technical team’s inputs. This approach will cost 6 months of development using a 10 software team, and 2 technician subject matter experts full time. Use of the software will not be possible for 6 months. Average Software Engineering Salary $65,000 annually. Average Technician Salary is $60,000 annually.

> Cost = 10 Software Engineers * $65,000 * 0.5 years + 2 Technicians * $60,000 * 0.5 years + $20.00 * 200,000 repaired units * 0.5 years = $2.385M > Risk Exposure = 0.5 * 2.385M = 1.1925M > Risk Leverage = (15.7M-1.1925M)/2.385M=6.0828M


 * Option B:** Use flawed software and add more technicians and workstations. No redesign of software. Currently 5 technicians per site, and there’s 5 sites To get to 100% efficiency, we must use 25 technicians * 35% = 9 techs are needed to supplement current staff.

> Cost = 9 technicians * 60,000 * 6 years = $3.24M > Risk Exposure = 0.5 * 3.24M = 1.62M > Risk Leverage = (15.7M-1.62M)/3.24M=4.345


 * Option C:** Use flawed software while parallel development effort is in progress. 9 Technicians are needed for 6 months to keep the efficiency sufficient. 2 technicians are needed for Subject matter experts. 10 Software Engineers are needed for development.

> Cost = 11 technicians * $60,000 * 0.5 years + 10 Software Engineers * $65,000 * 0.5 years = $0.655M > Risk Exposure = 0.5 * 0.655M = 0.3275M > Risk Leverage = (15.7M-0.3275M)/0.655M=23.469

Option C has the largest Risk Leverage, so we will implement that plan.

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