From mboxrd@z Thu Jan 1 00:00:00 1970 X-Spam-Checker-Version: SpamAssassin 3.4.5-pre1 (2020-06-20) on ip-172-31-74-118.ec2.internal X-Spam-Level: * X-Spam-Status: No, score=1.3 required=3.0 tests=BAYES_50,SUBJ_ALL_CAPS autolearn=no autolearn_force=no version=3.4.5-pre1 Date: 9 Aug 93 14:33:36 GMT From: att-out!cbnewsl!willett@rutgers.edu (david.c.willett) Subject: Re: ADA IS NOT A FAILURE. Message-ID: List-Id: >>From article <7.1289.238.0N54F073@cld9.sccsi.com>, by michael.hagerty@cld9.scc si.com (Michael Hagerty): > On Fri, 6 Aug 1993, David C Willett responded to John Doner: > > DC3 I can't agree with you here John, development costs are not "sunk". Ever y > 3 R&D venture I've ever been associated with or heard of, has a "break-even " > 3 point, which is calculated up front. The development team, or champion, or > 3 manager (it varies with company) *MUST* break even by a particular date o r > 3 have their head(s) handed to them by the backers (e.g. the Board of > 3 Directors). > > Small nit, here... Costs, commonly divided up into fixed and variable (where > development usually goes into the "fixed" category), are usually not related > to price, except that the per copy variable costs should not exceed the > price. The concept of "break-even" is very subjective and is usually driven > by formulae based upon SWAGs... > > Regards, Mikey > --- > ~ MR/2 1.52 #63 ~ I can quit anytime I want; I just don't want to! > ~ R109U:~ Usenet ~ Nitelog BBS ~ Monterey CA ~ 408-655-1096 Responding to the nit...... There are many ways accountants & managers classify costs (after all, it's their job and their culture -- e.g. Eskimos have hundreds of words for snow...) so I think using simply "fixed" and "variable" is, well.... too simple. I've heard the terms "recurring" and "non-recurring" used in connection with R&D funding. Non-recurring costs usually refer to the "price of admission" into the research area (e.g. lab assets, software tools, CM systems, etc.), whereas "recurring" costs usually refer to the "price per feature" (e.g. "What if we put a Windows interface on it?"). The break-even point I mentioned earlier is the point on the time vs. unit sales graph where *all* the projected R&D costs would be paid back. From then on, the product makes a profit. Clearly, the unit price the market will bear for the product has a great deal to do with where the break even point ends up. Quite a bit of the "SWAG" part of unit pricing goes into setting the price the market will bear. Doing the job well requires a keen understanding of one's potential market. It is in that understanding of potential markets for small-platform Ada compilers that the Ada vendors probably missed the boat. -- Dave Willett AT&T Federal Systems Advanced Technologies Shoulda been a cowboy/Shoulda learned to rope & ride/Wearing my six-shooter/ Ridin' my pony -- on a cattle drive!!! Stealin' a young girl's heart/ Just like Gene & Roy/Singnin' them campfire songs/ Shoulda been a cowboy.....