Date of Award

3-21-2019

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

This research involves the creation of standard factors that more accurately reflect observed outcomes in the development stages of major programs. Traditionally, estimation techniques such as analogy, parametric, engineering build-up, and factors are utilized to develop budgets and serve as the baseline for measuring project progress. This effort accomplishes the development and creation of 443 new standard cost factors that are delineated by five categories: commodity type, contract type, contractor type, development type, and service. The factors are developed for those elements that are "common" in a wide array of projects such as program management, systems engineering, data, training or site activation. This research conducts statistical analysis of factor values at the Work Breakdown Structure (WBS) element level, as well as the subcategories of the five identified categories. Statistical differences between subcategories were identified only 34.38% of the time, likely due to the high Coefficient of Variation (CV) values across the dataset. In refined subsets of the dataset, the CV generally decreased, indicating that the average percent estimating error improved when more detailed information was available. Thus, the outcome of this research is that cost estimators must employ both statistical and practical analysis in the creation of cost estimates. Furthermore, analysts will have a reference tool made up of 443 unique factors from which to begin analysis for creating estimates and conducting the iterative process of refining cost estimates.

AFIT Designator

AFIT-ENV-MS-19-M-187

DTIC Accession Number

AD1077548

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