Methodology for Modeling Cost and Schedule Risk Associated With Resource Decisions Involving the U.S. Army's Modernization Efforts for 2035

Abstract

Prioritization decisions using the Army Modernization and Analysis (AMA)-developed Trade-SpaceDecision Exploration System (TRADES) does not address programmatic variance related to cost andschedule growth. This study offers an improved methodology for modeling cost risk by employing soundcost estimation principles, distribution fitting, Monte Carlo simulations, and cost/benefit analysis to assiststrategic decision makers and the acquisitions community. To that end, this approach follows a five-stepmethodology that (1) collects and screens cost data from the Cost Assessment Database Enterprise (CADE), (2) determines normalized cost growth factors, (3) identifies and constructs the appropriate distributions formodeling, (4) simulates cost variance among the entire program portfolio, and (5) recommends thenecessary contingency cash reserve quantity associated with a decision makers confidence level. The resultis a credible, repeatable, and effectual cost estimating methodology that promotes commodity-based modelsfor predicting cost growth and measuring risk.

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Document Details

Document Type
Technical Report
Publication Date
Jun 01, 2021
Accession Number
AD1151067

Entities

People

  • Matthew A. Mcclary

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Energy and Power Technologies
  • Ground and Sea Platforms
  • Human Systems
  • Weapons Technologies

DTIC Thesaurus Topics

  • Accuracy
  • Business Administration
  • California
  • Data Analysis
  • Data Mining
  • Data Science
  • Databases
  • Delphi Method
  • Growth Factors
  • Information Science
  • Monte Carlo Method
  • Organizational Structure
  • Risk Analysis
  • Risk Management
  • Spreadsheet Software
  • Statistical Analysis
  • Systems Engineering

Readers

  • Life Cycle Cost Analysis
  • Military Logistics and Supply Chain Management