Development Savings through Parametric Modeling of Program Costs,
BELL HELICOPTER TEXTRON INC FORT WORTH TX
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Parametric modeling has been applied successfully to most facets of the weapon system preliminary design process. In the area of cost estimating, many parametric techniques are available to project production cost from system characteristics. However, development cost is usually estimated using grass roots techniques, a time consuming and expensive approach. This paper proposes the application of parametric cost estimating to the derivation of development cost. Historical data from the individual contractors experience is used as a basis for the model. Both system characteristics and program requirements are analyzed as potential cost drivers. Program alternatives can be evaluated based upon a quantitative assessment of financial risk, using equations sensitive to changes in requirements. The development cost model provides the opportunity to base decisions on sound information and to avoid the expensive iteration of grass roots estimating early in the concept formulation stage. The result is a significant savings in development cost.
- Economics and Cost Analysis