SOFTWARE_COSTING.md

🚀 Real-World Applications of RAG vs Fine-Tuning

This document outlines practical applications where either Retrieval-Augmented Generation (RAG), fine-tuning, or both are best suited. It also includes a rough cost breakdown to help with planning.

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1. Customer Support Chatbots

🔹 Technique: RAG + Optional Fine-Tuning

• Why RAG: Fetch live policy, FAQ, or documentation.
• Why Fine-Tuning: Enforce tone, format, or compliance-specific structure.

Example: Insurance chatbot that answers based on live product policies.

Cost:

• RAG: ~$50/month for vector DB + embeddings (small scale)
• Fine-Tuning: ~$500–$2,000 one-time compute cost, retrain as needed

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2. Medical Assistant (Diagnosis + Education)

🔹 Technique: Fine-Tuning (Primarily)

• Why Fine-Tuning: Sensitive logic, domain-specific language, tone control.
• Why Not RAG: External sources may introduce liability/risk.

Example: On-device diagnostic LLM for field clinics.

Cost:

• Fine-Tuning: ~$1,000–$5,000+ (LLaMA, Mistral)
• On-device inference: No hosting cost

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3. Legal Search + Drafting Tool

🔹 Technique: RAG (Primarily)

• Why RAG: Pull recent case law, statutes, contracts.
• Why Fine-Tuning (Optional): Format legal summaries precisely.

Example: Law firm research assistant for drafting memos.

Cost:

• RAG: ~$100–$500/month depending on index size
• Fine-Tuning (optional): ~$2,000+ for domain-specific language model

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4. Resume or CV Enhancer

🔹 Technique: Fine-Tuning + Optional RAG

• Why Fine-Tuning: Customize tone, formatting, and response quality.
• Why RAG: Inject dynamic job market data (skills, trends).

Example: Resume optimizer platform.

Cost:

• Fine-Tuning: ~$500–$1,000
• RAG: $20–$100/month for live skills/titles data

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5. E-commerce Product Assistants

🔹 Technique: RAG

• Why RAG: Pull product specs, prices, availability from a live catalog.
• Why Not Fine-Tuning: Info changes too frequently.

Example: Smart shopping assistant on a retail site.

Cost:

• RAG: $50–$200/month (depending on catalog size and query volume)

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6. Programming Assistant / Code Helper

🔹 Technique: RAG (Primarily)

• Why RAG: Retrieve latest libraries, examples, documentation.
• Why Not Fine-Tuning: Keeping up-to-date code is hard to bake into a static model.

Example: VSCode extension that answers code questions.

Cost:

• RAG: $100–$300/month (vector DB + embedding calls)

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Summary Table

Application	Technique	Est. Cost (Monthly / One-Time)
Customer Support	RAG + Fine-Tune	$50–$200/mo + $500–$2K one-time
Medical Assistant	Fine-Tune	$1K–$5K+ one-time
Legal Research Assistant	RAG	$100–$500/mo
Resume Enhancer	Fine-Tune + RAG	$500–$1K one-time + $20–$100/mo
E-commerce Product Assistant	RAG	$50–$200/mo
Programming Assistant	RAG	$100–$300/mo

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