Date of Award

3-23-2018

Document Type

Thesis

Degree Name

Master of Science in Cost Analysis

Department

Department of Systems Engineering and Management

First Advisor

Jonathan D. Ritschel, PhD

Abstract

Accurately predicting Operating and Support (O&S) costs is vital in the current climate of budgetary constraints. However, there is an overall lack of research in the realm of O&S which hinders cost estimator’s abilities to provide accurate sustainment estimates. This research determines when Air Force Aircraft O&S costs stabilize and to what degree. Stability is examined in three areas: total O&S costs, the six O&S cost element structures, and aircraft type. Stability results vary by category but generally is found to occur 80% of the time at approximately five years from Initial Operating Capability (IOC). The second portion of this research employs a multiple regression model to predict median O&S costs per total active aircraft in the inventory (CPTAI). All O&S costs and variables for regression derived from the literature are collected using the Air Force Total Ownership Cost (AFTOC) database. The model explains 87.24% of the variance in the data set when predicting median O&S CPTAI. Results from this research provide insight to cost estimators on when to start using actual O&S costs as a baseline for estimates in lieu of analogous programs and provides a new parametric O&S estimating tool designed as a cross-check to current estimating methodologies.

AFIT Designator

AFIT-ENV-MS-18-M-207

DTIC Accession Number

AD1056486

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Economics Commons

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