Cost Estimating Risk and Cost Estimating Uncertainty Guidelines

Abstract

The Memorandum of Agreement signed by the Assistant Secretaries of the Navy for Research, Development, and Acquisition (ASN[RD&A]) and for Financial Management and Comptroller (FM&C) in June 1996 committed the Naval Center for Cost Analysis (NCCA) to improve cost analyses by helping program managers prepare better cost estimates. Recent computing advances make the development of meaningful risk and uncertainty analyses easier, and these analyses can help managers do their job better. An example risk and uncertainty analysis is performed on a missile guidance and control (G&C) unit cost estimate (for expediency, learning curve phenomena will be temporarily ignored). The work breakdown structure for the G&C consists of a seeker and a processor. The analyses will be performed on each individual work breakdown structure element using a Monte Carlo simulation. Additionally, an overall risk and uncertainty analysis will be conducted on the rolled up estimate using the same methodology.

Open PDF

Document Details

Document Type
Technical Report
Publication Date
Jan 01, 1997
Accession Number
ADA487532

Entities

People

  • Jeffrey S. Cherwonik
  • Timothy P. Anderson

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Cost Analysis
  • Cost Estimates
  • Costs
  • Databases
  • Financial Management
  • Information Science
  • Life Cycle Costs
  • Life Cycles
  • Military Operations
  • Monte Carlo Method
  • Operations Research
  • Probability
  • Probability Distributions
  • Standards
  • Uncertainty
  • Zener Diodes

Readers

  • Defense Acquisition Program Management
  • Life Cycle Cost Analysis
  • Systems Analysis and Design