Estimating Potential Cost Growth of the Most Probable Cost Estimate.
Abstract
In today's environment of reduced funding it is imperative that an effective method of assessing likely cost growth be available early in the acquisition life cycle, and especially during the source selection process. This research sought to identify a method for predicting the range of cost growth around the most probable cost estimate generated during the source selection process. With the assistance of the Research and Cost Division of Aeronautical Systems Division, three factors were identified to be major contributors to cost growth for ASD programs; technical risk, configuration stability, and schedule risk. The data base consisted of 16 programs from ASD from 1980 to 1988. The results of this research provides a method for quickly assessing the range of potential cost growth of the most probable cost estimate; however, due to the small data base, more research must be conducted to increase the method's usefulness. Although more research is necessary, based on the data base used, configuration stability appears to be a more significant driver of cost growth in the development phase; whereas, schedule risk appears to be more significant in the production phase.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1991
- Accession Number
- ADA243919
Entities
People
- Pamela J. Singleton
Organizations
- Air Force Institute of Technology