Applying the informal definition above life cycle

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Unformatted text preview: ationally among alternatives. Another is as a control mechanism during the project life cycle. Cost measures produced for project life cycle reviews are important in determining whether the system goals and objectives are still deemed valid and achievable, and whether constraints and boundaries are worth maintaining. These measures are also useful in determining whether system goals and objectives have properly flowed down through to the various subsystems. As system designs and operational concepts mature, cost estimates should mature as well. At each review, cost estimates need to be presented and compared to the funds likely to be available to complete the project. The cost estimates presented at early reviews must be given special attention since they usually form the basis under which authority to proceed with the project is given. The system engineer must be able to provide realistic cost estimates to the project manager. In the absence of such estimates, overruns are likely to occur, and the credibility of the entire system development process, both internal and external, is threatened. 5.2.1 Life-Cycle Cost and Other Cost Measures A number of questions need to be addressed so that costs are properly treated in systems analysis and engineering. These questions include: • • • What costs should be counted? How should costs occurring at different times be treated? What about costs that cannot easily be measured in dollars? What Costs Should be Counted. The most comprehensive measure of the cost of an alternative is its life-cycle cost. According to NHB 7120.5, a system's life-cycle cost is "the total of the direct, indirect, recurring, nonrecurring, and other related costs incurred, or estimated to be incurred in the design, development, production, operation, maintenance, support, and retirement [of it] over its planned life span." A less formal definition of a system's life-cycle cost is the total cost of acquiring, owning, and disposing of it over its entire lifet...
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This document was uploaded on 02/26/2014 for the course E 515 at University of Louisiana at Lafayette.

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