Question
Your engineers are developing a new product to launch next year that will require both software and hardware innovations. The software team requests a budget
Your engineers are developing a new product to launch next year that will require both software and hardware innovations. The software team requests a budget of $6 million and forecasts an 77% chance of success. The hardware team requests a $8 million budget and forecasts a 52% chance of success. Both teams will need 6 months to work on theproduct, and therisk-free interest rate is 4% APR with semiannual compounding.
a. Which team should work on the projectfirst?
The (hardware or software) team should workfirst, followed by the (hardware or software) team.
b. Suppose that before anyone has worked on theproject, the hardware team comes back and revises theirproposal, changing the estimated chance of success to 78% based on new information. Will this affect your decision in (a)?
Yes, or no, the (software or hardware) , followed by the ( software or hardware) team.
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