Weight has been used as the primary input variable for cost estimating almost as long as there have been parametric cost models. While there are good reasons for using weight, serious limitations exist. These limitations have been addressed by multi-variable equations and trend analysis in models such as NAFCOM, PRICE, and SEER; however, these models have not be able to address the significant time lags that can occur between the development of similar space flight hardware systems. These time lags make the cost analyst's job difficult because insufficient data exists to perform trend analysis, and the current set of parametric models are not well suited to accommodating process improvements in space flight hardware design, development, build and test. As a result, people of good faith can have serious disagreement over the cost for new systems. To address these shortcomings, new cost modeling approaches are needed. The most promising approach is process based (sometimes called activity) costing. Developing process based models will require a detailed understanding of the functions required to produce space flight hardware combined with innovative approaches to estimating the necessary resources. Particularly challenging will be the lack of data at the process level. One method for developing a model is to combine notional algorithms with a discrete event simulation and model changes to the total cost as perturbations to the program are introduced. Despite these challenges, the potential benefits are such that efforts should be focused on developing process based cost models.
Document ID: 20030062056. International Society of Parametric Analysis/Society of Cost Estimating and Analysis 2003 International Conference; 17-20 Jun. 2003; Orlando, FL; United States.
