Accession Number:

ADA275873

Title:

Learning and Production Rate in Cost Estimating

Descriptive Note:

Corporate Author:

ARMY MISSILE COMMAND REDSTONE ARSENAL AL

Personal Author(s):

Report Date:

1993-09-01

Pagination or Media Count:

33.0

Abstract:

Production rate is a very important factor in estimating manufacturing costs. Actual price data shows that production rate has a much greater affect on cost than learning. Cost analysis frequently use learning as the only variable in creating cost estimating relationships from historical data bases for manufacturing costs. Predicting future costs due to changes in annual and cumulative production quantities should use both learning and production rate to prevent erroneous cost estimates. Large errors in predicting cost and quantities can result due to ignoring rate. High production rate lowers unit cost, and vice versa low production rate increases unit production cost. Lower production rate is a frequent reaction to cutting current costs, but this usually results in a higher unit production cost due to the government and contractors fixed costs or business base. Production rate is shown to have a much greater impact than learning in manufacturing cost estimating relationships and unit production costs.

Subject Categories:

  • Administration and Management
  • Information Science
  • Economics and Cost Analysis
  • Psychology
  • Manufacturing and Industrial Engineering and Control of Production Systems
  • Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE