867. A Discussion of Trade Study Cost Estimation Methods

Paper

Abstract

Three fundamental problems exist in cost estimating processes: (1) the need for greater estimating accuracy to produce higher confidence in the predicted cost of a particular weapon system; (2) the need for more complete system requirement definitions for estimating purposes; and (3) the need for improved definitions of cost sensitivity to support the tradeoff process necessary for system design and the choice between candidate systems. Cost methods presently used in aerospace conceptual and product definition design studies need improvement if they are to provide the cost information to support the tradeoff study process. The third fundamental problem is traced, with particular emphasis on the weight and cost interface. Ongoing research is described that is being conducted to provide improved methods for developing such cost information. The main thrust of this effort lies in providing improvements in the methods for interrelating variations in system and program characteristics with cost variations. The research effort described deals with the development of CERs for a basic airframe structure, relating cost per pound, structural weight, and complexity factors. Research into the identification and evaluation of the usefulness of cost drivers other than weight is also described. Also discussed are general problems relating to the place of weight in the prediction of cost, to the questions of approach and necessary level of detail for achieving an appropriate cost sensitivity, and to the place of other weight-related data ‘in the prediction of cost. The discussion is based partly on the research and partly on problems encountered during application to actual cost analysis.