Accession Number:

ADA300643

Title:

A Comparative Study of Linear and Nonlinear Estimate at Completion Methods.

Descriptive Note:

Master's thesis,

Corporate Author:

AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH SCHOOL OF LOGISTICS AND ACQUIS ITION MANAGEMENT

Personal Author(s):

Report Date:

1995-09-01

Pagination or Media Count:

195.0

Abstract:

Controlling costs in the acquisition of new defense systems is a major challenge in todays environment of declining budgets and rapidly changing technology. One of the challenges faced by program managers and cost analysts is selecting the most appropriate Estimate at Completion EAC method for their program. This study compares the performance of the popular index-based EAC methods with several newer nonlinear, regression based EAC methods to determine whether the complex nonlinear methods perform better than the simpler index-based methods.In addition, the sensitivity of the results to stage of contract completion, system type, program phase, contract type, Department of Defense service component, and inflation effects are also investigated. Eighty-eight contracts were examined in this study and it was found that overall the index-based EAC methods performed significantly better than the nonlinear regression based methods as measured by two criteria, the accuracy and stability of the EACs. In addition, the top performing method overall was determined to be the index-based method using the Composite Index. The best performing method was, however, sensitive to all of the factors investigated in the sensitivity analysis.

Subject Categories:

  • Administration and Management
  • Economics and Cost Analysis
  • Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE