AN INTEGRATED APPROACH TO THE STRUCTURING OF A COST MODEL
RAND CORP SANTA MONICA CA
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Design decisions commonly are made today without consideration of their total economic implications. Resource requirements covering the entire life cycle of a system - that is, from development through manufacture and operations -- frequently are treated on a fragmentary basis. Total systems costing techniques are applied too late to be included in the optimization of engineering design. Construction of a systems cost model can provide critically important data for the engineering development effort and, furthermore, serve as the framework for coordination of the entire study. A procedural approach for construction of an integrated model is outlined in this presentation. Emphasis is on an integrated approach rather than on full details of the methodology. The method of presentation is a case example, viz., the use of airships for the transportation of outsize commodities. The requirement which gave rise to the need for development of a cost model is reviewed at the outset.
- Economics and Cost Analysis