Date of Award

3-26-2015

Document Type

Thesis

Degree Name

Master of Science

Department

Department of Systems Engineering and Management

First Advisor

Jonathan D. Ritschel, PhD.

Abstract

The accuracy of cost estimates is vital during this era of budget constraints. A key component of this accuracy is regularly updating the cost estimate at completion (EAC). A 2014 study by the Air Force Cost Analysis Agency (AFCAA) improved the accuracy of the cost estimate at completion (EAC) for space system contracts. The study found schedule duration to be a cost driver, but assumed the underlying duration estimate was accurate. This research attempts to improve the accuracy of the duration estimate from the AFCAA study; accuracy is evaluated with the Mean Absolute Percent Error (MAPE). The methods researched here are more accurate, timely, and reliable than the status quo method. The original objective, to improve the accuracy of the duration estimates for the cost estimating model, was achieved. The accuracy gains ranged from 2.0% to 13.4% for single contracts, 3.2% to 5.1% for OTB contracts, and 2.9% to 5.2% for all contracts combined. The accuracy improvement is more pronounced from 0% to 70% completion, with a 4.0% to 7.6% increase in accuracy. The accuracy improvement for the EAC was 6.5% (24.4% vs. 17.9%).

AFIT Designator

AFIT-ENV-MS-15-M-177

DTIC Accession Number

ADA615411

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