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Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results by Eli Schragenheim, David J. Anderson

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Chapter 20. Financial Metrics in Traditional Methods

Inventory

The unit of Inventory in structured methods is the Function Point. The functions in the functional specification could equally be used in businesses that do not count Function Points. However, the vast body of knowledge about Function Points makes them the best choice. They have low standard deviation and repeatability of analysis. The Inventory in the system of software production is the total number of Function Points at any stage in the process: FPs not yet started, FPs in process, and FPs completed but not yet delivered in a release—all count as Inventory (V).

Investment

In Chapter 2, Investment (I) was defined as the money sunk in the total Inventory of raw material plus ...

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