Cost [Dido Solutions, Inc Wiki]

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====== Cost ======

[[dido:99_annexes:annex-b-terms-and-definitions:start|Go up to Terms and Definitions]]

===== Discussion =====

Cost is an [[dido:99_annexes:annex-b-terms-and-definitions:e:evaluation_characteristic|Evaluation Characteristic]] concerning the value of Resources required, consumed, committed, or foregone for a specified subject, activity, or outcome.

Cost can apply to:

  * A [[dido:99_annexes:annex-b-terms-and-definitions:c:candidate_solution|Candidate Solution]]
  * A [[dido:99_annexes:annex-b-terms-and-definitions:d:distributed_system|Distributed System]]
  * A [[dido:99_annexes:annex-b-terms-and-definitions:n:node|Node]]
  * A Qualified Node
  * A [[dido:99_annexes:annex-b-terms-and-definitions:n:node_set|Node Set]]
  * A service
  * A product
  * A deployment
  * A maintenance activity
  * A [[dido:99_annexes:annex-b-terms-and-definitions:t:test_run|Test Run]]
  * A transition
  * An operation
  * An acquisition
  * Another subject, activity, or outcome having an assigned value

Cost can include:

  * Acquisition cost
  * Licensing cost
  * Development cost
  * Integration cost
  * Deployment cost
  * Infrastructure cost
  * Operating cost
  * Storage cost
  * Energy cost
  * Communication cost
  * Maintenance cost
  * Support cost
  * Training cost
  * Migration cost
  * Transition cost
  * Recovery cost
  * Compliance cost
  * Decommissioning cost
  * Disposal cost
  * Opportunity cost
  * Another cost category established by the [[dido:99_annexes:annex-b-terms-and-definitions:a:acceptance_criteria|Acceptance Criteria]]

Cost can identify:

  * The evaluated subject
  * The specified activity or outcome
  * The cost category
  * The included Resources
  * The excluded Resources
  * The applicable time period
  * The applicable jurisdiction
  * The applicable currency
  * The applicable valuation date
  * The applicable price source
  * The applicable discount rate
  * The applicable allocation method
  * The applicable normalization method
  * The applicable assumptions
  * The applicable uncertainty
  * The applicable DIDO [[dido:99_annexes:annex-b-terms-and-definitions:b:baseline|Baseline]]
  * The applicable [[dido:99_annexes:annex-b-terms-and-definitions:v:validation_criteria|Validation Criteria]]
  * The applicable Acceptance Criteria
  * Its [[dido:99_annexes:annex-b-terms-and-definitions:e:evidence|Evidence]]
  * Its [[dido:99_annexes:annex-b-terms-and-definitions:p:provenance|Provenance]]
  * Its [[dido:99_annexes:annex-b-terms-and-definitions:t:traceability|Traceability]]

Cost can be expressed as:

  * Total cost
  * Initial cost
  * Recurring cost
  * Fixed cost
  * Variable cost
  * Marginal cost
  * Cost per transaction
  * Cost per Test Run
  * Cost per Node
  * Cost per User
  * Cost per unit of time
  * Cost per unit of completed work
  * Lifecycle cost
  * Another value established by the Acceptance Criteria

===== Definition =====

//[[dido:99_annexes:annex-b-terms-and-definitions:e:evaluation_characteristic|Evaluation Characteristic]] concerning the value of Resources required, consumed, committed, or foregone for a specified subject, activity, or outcome//

===== Source =====

Adapted from:

  * [[dido:99_annexes:annex-b-terms-and-definitions:e:evaluation_characteristic|Evaluation Characteristic]]
  * [[dido:99_annexes:annex-b-terms-and-definitions:r:resource|Resource]]
  * [[dido:99_annexes:annex-b-terms-and-definitions:r:resource_consumption|Resource Consumption]]
  * Financial Systems Archetype, Part 7: Governed Node Service Market
  * DIDO Reference Implementation Conceptual Model
  * DIDO-TE draft Requirements Register
  * DIDO-TE Broad Agency Announcement source material

===== Note =====

Cost differs from price:

  * Cost concerns the value of Resources required, consumed, committed, or foregone
  * Price identifies an amount requested or paid in an exchange

Price can contribute to Cost but does not necessarily represent total Cost.

Cost differs from [[dido:99_annexes:annex-b-terms-and-definitions:r:resource_consumption|Resource Consumption]]:

  * Resource Consumption identifies the amount of a Resource used
  * Cost assigns a value to Resources required, consumed, committed, or foregone

Two Candidate Solutions can consume equivalent Resources but have different Cost because of differences in:

  * Prices
  * Licensing
  * Jurisdiction
  * Allocation methods
  * Support arrangements
  * Contract terms
  * Valuation dates

Lower Cost does not necessarily indicate a preferable Candidate Solution. The lower-Cost Candidate Solution can have lower:

  * Functional Correctness
  * Performance Efficiency
  * Reliability
  * Security
  * Interoperability
  * Scalability
  * Maintainability
  * Recoverability

A Cost comparison must identify its boundary. Statements such as **lower cost** or **cost effective** are not objectively verifiable without identifying:

  * The included Cost categories
  * The excluded Cost categories
  * The evaluation period
  * The currency
  * The valuation method
  * The normalization method
  * The comparison reference

Estimated Cost should be distinguishable from measured, incurred, invoiced, or paid Cost.

===== Example =====

DIDO-TE evaluates three Candidate Solutions over a projected five-year operational period.

The Acceptance Criteria include:

  * Acquisition cost
  * Licensing cost
  * Deployment cost
  * Infrastructure cost
  * Energy cost
  * Storage cost
  * Maintenance cost
  * Support cost
  * Decommissioning cost

The Acceptance Criteria establish the currency, valuation date, discount rate, workload, and allocation method.

DIDO-TE associates measured Resource Consumption with the applicable price information and records each Cost assumption.

The comparative evaluation reports total and per-transaction Cost for each Candidate Solution while preserving Evidence, Provenance, and Traceability.

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