Date of Award

3-1995

Document Type

Thesis

Degree Name

Master of Science

Department

Department of Operational Sciences

First Advisor

James S. Shedden, PhD

Abstract

Cost estimation is an integral part of the procurement process of major weapon systems. Despite this essential role, the cost estimation process is able to provide the decision makers and analysts with a limited amount of insight. This is due to the complex nature of the cost models that typically contain 20-30 cost estimating relationships (CERs) and 50-100 variables. In an effort to provide the decision makers and analysts with additional insight to the cost estimate, this research demonstrates a methodology that will (1) identify the cost drivers of the cost model, ( 2) estimate the effects of these cost drivers, and (3) approximate the variance of the cost model to support confidence interval estimation. Using a cost model for the Navy's Tomahawk Baseline Improvement Program, a series of designed experiments in conjunction with regression analysis was employed to develop a model of the cost drivers--a metamodel. This metamodel captures the essence of the original cost model, but is in a more comprehensive form. The estimation of the variance contained in the original cost model allowed the construction of confidence intervals using the metamodel. A comparison of the intervals constructed using the metamodel with those generated by the original model verified the metamodel can be used as an approximation of the original model.

AFIT Designator

AFIT-GOR-ENS-95M-05

DTIC Accession Number

ADA293833

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