The Effects of Different Production Rate Measures and Cost Structures on Rate Adjustment Models

Abstract

The effect of production rate on the cost of weapon systems has attracted much attention in the cost estimating community in recent years. A variety of adjustments to weapon systems cost models have been proposed to reflect the impact of different production rates. The most popular solution is to add a rate term to the traditional learning curve model. This paper examines the effects of different rate measures and cost structures on rate adjustment models. Numerical examples illustrate that the production rate term should be measure as a ratio and not as an absolute quantity of a production lot or a period. The paper also points out that a rate adjustment model is appropriate only with data from plants which have not undergone changes in cost structure. Production rate, Rate adjustment, Learning curve, Cost estimating.

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Document Details

Document Type
Technical Report
Publication Date
Feb 01, 1990
Accession Number
ADA220842

Entities

People

  • Dan C. Boger
  • Shu S. Liao

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Air Platforms
  • Weapons Technologies

DTIC Thesaurus Topics

  • Aircrafts
  • Availability
  • California
  • Classification
  • Contracts
  • Cost Analysis
  • Cost Models
  • Costs
  • Data Analysis
  • Governments
  • Manufacturing
  • Procurement
  • Production
  • Production Engineering
  • Production Rate
  • Security
  • Weapon Systems

Readers

  • Economics
  • Logistics and Supply Chain Management.
  • Mechanical Engineering/Mechanics of Materials.