Date of Award

3-2025

Document Type

Thesis

Degree Name

Master of Science in Cost Analysis

Department

Department of Systems Engineering and Management

First Advisor

Robert David Fass, PhD

Abstract

Accurate cost estimation for Department of Defense (DoD) hardware modification programs remains a critical challenge due to the complexity of Group A and Group B modifications and their associated installation costs. This study evaluates the validity of a 1:1 ratio heuristic, which suggests that Group A modification kits combined with installation costs should equate to the costs of Group B modification kits. This study analyzes cost relationships across system types and modification categories using a dataset of 255 modification programs from the Air Force Life Cycle Management Center (AFLCMC). Statistical methods, including means tables and regression modeling, evaluate the validity of the 1:1 cost ratio heuristic. Findings indicate that while the 1:1 ratio holds on average, variability exists across system and modification types suggesting that a universal application of this heuristic may lead to estimation inaccuracies. These results provide empirics regarding ratios, improving decision-making for future DoD hardware modifications. Specifically, we provide preliminary cost proportions for Group A modification kits, Group B modification kits, and installation costs across different system and modification type combinations using means table analyses. The study underscores the need for refined cost factors and further research into system-specific or modificationspecific cost drivers.

AFIT Designator

AFIT-ENV-MS-25-M-074

Comments

An embargo was observed for this posting.

Distribution A: Approved for public release, Distribution Unlimited. PA case number 88ABW-2025-0430

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