DICE: DEVELOPMENT INDEPENDENT COST ESTIMATE. SYNOPSIS, DEFINITION 'TERMS'. PART I. BACKGROUND, PURPOSE, SCOPE. PART II. COLLECTION OF DATA, PREPARATION OF DATA. PART III. SUMMARY.
ARMY MISSILE COMMAND REDSTONE ARSENAL ALA DIRECTORATE OF PROCUREMENT AND PRODUCTION
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The purpose of this report is to explain a set of procedures that, when followed by the person analyst preparing a cost estimate, will eliminate the time-consuming task of manually computing learning curves, i.e. least-squares regression curves using curvilinear curves where the logarithm base 10 of the dependent and independent variables are used instead of the actual values of the variables. The learning or experience curves apply to both direct manhours and dollar cost. Variables for the curve are obtained from the present contracts for procurement. The scope of the report and the procedures described cover the follow-on type contract where there has been cumulative total dollar and direct labor manhour cost data reported on at least two reports and at least one unit completed for each report. Two reports with two or more units and cost of each are necessary so that two points of data will determine a curve. A typical cost estimate for a new contract might require 40 manhours to compute the required learning curves. The same data can be processed in the manner described with a scientific computer within a few minutes, depending on the type computer used. The time required for reparation of data for manual computation and for computer processing is approximately the same.