Allocation of Operations and Support Cost Targets Study
Final rept. 15 Sep 1983-15 Feb 1984
LTV AEROSPACE AND DEFENSE CO DALLAS TX VOUGHT AERO PRODUCTS DIV
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The Air Force wants to hold contractors responsible for product performance during operational use. The use of an Operations and Support O S cost guarantee is one such method. However, for industry there is a general reluctance to offer these guarantees, because of the contractors inability to determine the risk involved, and the operating cost of the delivered product. Although the governments position on the use of OS cost guarantees is not known, there is increasing emphasis on warranties that are similar to an OS cost guarantee. Examples are Reliability Improvement Warranties, the KC-10 Warranty Program, the service life policy of the C-17, and the product-warranty provisions in the 1984 Defense Department Appropriations Bill. This study develops a procedure for allocating government aircraft system cost targets into manageable system component subtargets. This procedure uses standard statistical techniques, the central limit theorem, regression analysis, and the Program Evaluation and Review Technique PERT. Statistical cost equation values are derived using Air Force 66-1 data, the Air Force Visibility and Management of Operations and Support Cost VAMOSC data, and engineering judgement.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies