Improving_Space_Cost_Project_Estimating_ - IMPROVING SPACE...

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IMPROVING SPACE PROJECT COST ESTIMATING WITH ENGINEERING MANAGEMENT VARIABLES Joseph W. Hamaker, NASA Headquarters Cost Analysis Division Paul J. Componation, The University of Alabama in Huntsville Abstract Current aerospace parametric cost models predict space project costs using regression equations. The equations relate the historical cost of projects to technical variables such as weight and power. While improvements in parametric cost modeling have been made, there is still significant variability in the estimates. This is particularly true when estimating the costs for complex systems. Part of this variability may be due to the models’ inability to capture the impacts of the engineering management considerations required to develop these systems. Our paper lays the groundwork for the introduction of engineering management variables into current cost models to improve their predictive capabilities. Introduction The general problem in space project cost estimating is predicting the cost of projects early in their formulation phase in order to make accurate commitments on what the project is likely to cost. These commitments are made to the project stakeholders who include NASA management, the Office of Management and Budget and Congress, among others. Parametric cost models are used because in the early stages of project definition, not enough detailed information is known to perform other types of estimates (such as a detailed engineering estimate which is based on a labor and material buildup of cost). The parametric cost models that are generally used in the early phases currently relate design information to cost. The purpose of this paper is to report the results of our investigation into whether engineering management parameters show promise for improving the accuracy of the models. Background on Cost Estimating Parametric estimating is the process of estimating cost by using mathematical equations that relate cost to one or more physical or performance variables associated with the item being estimated. Parametric estimating is used in a wide variety of applications including aeronautics and space, the military and commercial aircraft industries, the chemical industry, shipbuilding, construction, mining, power plants, computers, computer software, electronics and many other settings. Sometimes, especially before detailed designs are available, the parametric approach is the only estimating technique used in a project. Parametric estimating equations are often called cost estimating relationships, or CERs. Cost is the dependent variable in CERs while the physical or performance inputs are the independent variables. CERs can relate cost to many different types of independent variables (e.g., dollars per square feet for buildings, dollars per cubic feet for chemical process pressure vessels, dollars per pound for spacecraft, dollars per kilowatt for electrical power plants, dollars per horsepower for motors, dollars per kilobyte for computers, dollars per line of code for
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This note was uploaded on 11/22/2009 for the course ISE 627 taught by Professor Componation during the Fall '08 term at University of Alabama - Huntsville.

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Improving_Space_Cost_Project_Estimating_ - IMPROVING SPACE...

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