Accession Number : AD0465037


Title :   A SURVEY OF TECHNIQUES FOR IMPROVING COST ESTIMATES OF FUTURE WEAPON SYSTEMS


Corporate Author : ANSER ARLINGTON VA


Personal Author(s) : Carter, R D


Full Text : https://apps.dtic.mil/dtic/tr/fulltext/u2/465037.pdf


Report Date : Mar 1965


Pagination or Media Count : 90


Abstract : Actual cost of past and existing weapon systems have amounted to as much as seven times the original estimates, indicating a need for improved cost estimating techniques. This study examines the causes of cost overruns in weapon-system development and production and examines techniques which could improve the cost estimates of weapon systems expected to become operational 10 years in the future. A number of reasons for cost overruns are identified. Of these, technological uncertainty is a major cause. For example, the guidance system of an advanced ICBM may prove impossible to develop after a large amount of funds have been spent. The other major cause is requirements uncertainty. For example, an improvement in enemy defense capability may change the performance requirements of an ICBM midway in development. The techniques evaluated for their effectiveness in accounting for these uncertainties in cost estimating are: cost-estimating relations, adjustment factors, subjective probability distributions, and cost sensitivity analysis. Of the four, cost sensitivity analysis best accounts for technological and requirements uncertainties. Therefore, it is judged to be the best technique for estimating costs of future weapon systems. The study does recognize the value of combinations of the four techniques in some circumstances.


Descriptors :   *WEAPON SYSTEMS , AIR FORCE , AIR FORCE PROCUREMENT , BOOSTER ROCKET ENGINES , CONTROL SYSTEMS , CORRELATION TECHNIQUES , DECISION MAKING , GUIDED MISSILES , MANAGEMENT PLANNING AND CONTROL , MATHEMATICAL PREDICTION , PROBABILITY , PRODUCTION , RELIABILITY , ROCKET PROPELLANTS , SCHEDULING , SYSTEMS ENGINEERING , TIME STUDIES


Subject Categories : Military Forces and Organizations
      Ordnance


Distribution Statement : APPROVED FOR PUBLIC RELEASE