You have prepared an initial estimate of $2,000,000 to develop a software application for your organization. However, after you think about it a while, you vaguely remember from an old course you took at UMUC that estimates aren?t the same as reality. So, you do a bit more analysis and come up with the following table.

How much reserve should you add to your initial estimate in order to have a 90% chance of success?

Activity Labor Commercial SW and Licenses Subcontracts Most Likely $1,000,000 $500,000 $500,000 Optimistic $800,000 $450,000 $450,000 Pessimistic $1,500,000 $550,000 $600,000