Date of Award

9-1991

Document Type

Thesis

Degree Name

Master of Science in Cost Analysis

First Advisor

Wendell P. Simpson III, PhD

Abstract

This study develops a dependent component cost risk model validation methodology and applies it to the Air Force Risk Model. The validation process consists of ensuring that logically consistent input parameters are acted on properly by the cost risk methodology. users of all dependent component risk models must be concerned with logically consistent input parameters. Two criteria define logical consistency. The first is the correlation matrix consistency and the second is the consistency between pairs of cost distributions. Three validation criteria are defined and used to validate a cost risk model. The first criterion is that the process must maintain the user defined correlations. The second criterion is that the total cost distribution mean and variance be congruous with the analytical value. The third criterion is that properly specified input parameters not be altered by the cost risk process. A Comparison Model was developed in Quattro Pro to validate the general Air Force Risk Model methodology. Twenty-five pairs of work breakdown structure cost elements are defined and tested in the Comparison Model. The final research product is a table illustrating the narrow conditions where the Air Force Risk Model is valid.

AFIT Designator

AFIT-GCA-LSQ-91S-9

DTIC Accession Number

ADA243921

Comments

The author's Vita page is omitted

Presented to the Faculty of the School of Systems and Logistics of the Air Force Institute of Technology, Air University, in Partial Fulfillment of the Requirements for the Degree of Master of Science

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