Unformatted text preview: lidity of CERs based on weight, a common
indevariable in many models, in light of advances in
electronic packaging and composite materials.
Objections to using statistical CERs also include
problems of input accuracy, low statistical
significance due to limited data points, ignoring the
statistical confidence bands, and, lastly, biases in
the underlying data. tance, to obtain an estimate of cost. Similarly, software
CERs have been developed as well, relying on
judgments about source lines of code and other factors
to obtain development costs. (See sidebar on statistical
Another type of parametric model relies on
accepted relationships. One common example can be
found in the application of logistics relationships to the
estimation of repair costs and initial and recurring
spares costs. The validity of these cost estimates also
depends on the quality of the input parameters.
The principal advantages of parametric cost
models are that the results are reproducible, are more
easily documented than other methods, and often can
be produced with the least amount of time and effort.
This makes a properly constructed performance-based
parametric cost model useful in early trade studies. Analogy is another way of estimating costs.
When a new system or component has functional and
performance characteristics similar to an existing one
whose cost is known, the known cost can be adjusted to
reflect engineering judgments about differences.
Grass-roots (or "bottom-up") estimates are the
result of rolling up the costs estimated by each
organization performing work described in the WBS.
Properly done, grass-roots estimates can be quite
accurate, but each time a `'what if" question is raised, a
new estimate needs to be made. Each change of
assumptions voids at least part of the old estimate.
Because the process of obtaining grassroots estimates
is typically time-consuming and labor-intensive, the
number of such estimates that can be prepared during
trade studies is in reality severely limited.
Whatever technique is used, the direct cost of
each hardware and software element often needs to be
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