Date of Award

3-26-2015

Document Type

Thesis

Degree Name

Master of Science in Cost Analysis

Department

Department of Mathematics and Statistics

First Advisor

Edward D. White, PhD.

Abstract

Early research on time phasing primarily focuses on the theoretical foundation for applying the continuous distribution function, or S-curve, to model the distribution of development expenditures. Minimal methodology is provided for estimating the S-curve's parameter values. Brown, White, and Gallagher (2002) resolve this shortcoming through regression analysis, but their methodology has not been widely adopted by aircraft cost analysts, as it is judged as overly broad and not specific to aircraft. Instead, analysts commonly apply the 60/40 rule of thumb to aircraft development, assuming 60 percent expenditures at 50 percent schedule. It is currently unknown if the 60/40 heuristic accurately describes contemporary aircraft development programs. Therefore, using a sample of 26 DoD aircraft programs, we first test the accuracy of 60/40, discovering that, as a heuristic, the 60/40 cannot account for differences between new start and upgrade programs. Next, we improve upon prior research by using program characteristics to construct an aircraft-specific methodology for estimating parameters. Finally, we conclude our research by comparing the accuracy of our Rayleigh, Weibull, and Beta S-curve models. Our Weibull model explains 74.6 percent of total variation in annual budget, improving the estimation of budgets by 6.5 percent, on average, over the baseline 60/40 model.

AFIT Designator

AFIT-ENC-MS-15-M-173

DTIC Accession Number

ADA619204

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