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Terms in this set (30)
Life Cycle Cost Estimate
A forecast of the non-recurring and recurring costs associated with the development, implementation, and support of a program over a defined period of time
Cost Effectiveness Analysis
Determining which of several alternatives has the lowest life cycle cost given that the benefits do not differ significantly among alternatives and that each alternative satisfies a common requirement
Cost Benefit Analysis
Systematic method of assessing the overall economic desirability of competing alternatives, each of which offers a different stream of costs and benefits.
Capital Plan
Using the results of the business case and incorporating the acquisition details to ensure that the resources and contractual vehicles can be incorporated within the defined schedule program
Understand
Cost Element
estimating techniques
Collect data
Develop model
Sensitivity
Life Cycle Cost Estimating Process:
1. ____ the program
2. Define ___ ___ structure
3. Selecting cost ___ ___
4. Identify and ___ ___
5. ___ ___ and document cost estimates
6. Perform ____ analysis
7. Integrate into decision documentation
Definition
Operations
Programmatic Parameters
Quantities Status
Outcomes of Task 1 - Understand the Program:
- Mission/functional ___
- Concept of _____
- ___ ___
- Schedules/____/ test plans/ ____
Formal
Estimating Allocating
Outcomes of Task 2 - Define a Cost Element Structure
- ____ Structure
- Format for identifying, ____, ____, and reporting all life cycle costs.
Primary
Alternative
Outcomes of Task 3 - Select Cost Estimating Techniques
- ____ & ____ methodologies are selected
Time phased
Constant
Then Year
Outcomes of Task 5 - Develop model and calculate costs
- ___ ___ LCC estimates for each alternative
Being : - ___ and ___ ___ dollars
Variations
Quantifying
Investment
Sensitivity Analysis
Outcomes of Task 6 - Incorporate Sensitivity & Risk Analyses
- Revised LCC estimates reflecting ____
- _____ relationship between LCC and technical/operational parameters
- Identification of ____ areas
- Incorporate results of ___ ___ into final package
Development
Production
Operations and Support
3 traditional system life cycle phases:
Work Breakdown Structure
Product-oriented family tree composed of hardware, software, services, data, and facilities
Cost Element Structure
A hierarchical structure created specifically to facilitate the cost estimating process.
Sunk Costs
Costs incurred in the past that will not be affected by any present or future decision.
Contract Line Item Number (CLIN)
A number applied to each of the supplies and services to be provided under a contract.
Detailed
Empirical
Comparative
Analogy
Parametric
Statistical
Standard
Roundtable
Expert Opinions
Grass Roots
Extrapolation from actual costs
Types of Cost Estimating Methods (11):
Analogy Cost Estimate
An estimate of costs based on the historical cost data of similar items and utilizing adjustment factors to account for complexity, technical, or physical differences between the items
Comparative Cost Estimating
Estimating the cost of an item by comparing the job to be done (or portions of it) to all or parts of a previously completed job for which valid and comparable cost and technical information is available.
Complexity Factor
Builds on comparative cost estimating, through the use of a factor based on judgment or experience used to evaluate the degree of unknowns for a new end item as compared to a similar item.
Extrapolation from Actual Cost
A cost estimating methodology which requires prototype, reproduction, or prior production actual cost data on the system being estimated.
Production Cost
System Hardware
Extrapolation from Actual Cost Methodology is primarily used in estimating the ___ ___ of ___ ___
Historical data
Quick
Readily Understood
Minor Deviations
Analog/Comparative/Extrapolation Strengths:
- Based on actual ___ ___
- ____
- ___ ___ by clients
- Accurate for ___ ___
Parametric Cost Estimating
Uses statistical relationships between historical costs and other program variables
Cost factor
A cost estimating relationship in which cost is directly proportional to a single independent variable
Scope program
goals
Strategy
Hypothesis
When you define the hypothesis:
- Consider the ___ of the ____
- Define what the ___ are
- Develop the ____ to accomplish the goal
- Develop the ____
Cost drivers
Heuristic CERs
Cost
Explanatory Variable
Potential Sources
When you Develop the Hypothesis:
- Identify candidate ___ ___
- Conceptualize ___ ___
- Ensure the relationship between the ____ and the __ __ is logical, direct, and obvious
- Identify data type and __ __
Cost Data
Technical non cost data
Program data
Three Principal Types of Data:
Statistically significant relationship
Collect enough data to generate a ___ ___ ____
Regression Analysis
The purpose of ___ ___ is to predict a value for a dependent variable given a value for an independent variable.
Constant Coefficients
Reliability Significance
Two Stages of Regression Analysis:
- Estimate the ___ and ____ of the equation
- Inferring the ___ and ____ of the results on the basis of the assumed properties
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