Please use this identifier to cite or link to this item:
Title: Quantifying Uncertainty for Early Life Cycle Cost Estimates
Authors: Jim McCurley
Robert Ferguson
Dennis Goldenson
Robert Stoddard
David Zubrow
Keywords: QUELCE
Life Cycle
Cost Estimation
Issue Date: 30-Apr-2013
Publisher: Acquisition Research Program
Citation: Published--Unlimited Distribution
Series/Report no.: Life Cycle Cost
Abstract: Extensive cost overruns in major defense programs are common, and studies have identified poor cost estimation as a main contributor. Research and experience have identified several factors associated with poor cost estimates. These include optimistic expectations about the program scope and technology that can be delivered on schedule and within budget; the enormous amount of unknowns and uncertainty that exist when these estimates are made about large-scale, unprecedented systems that take years to develop and deploy; and the heavy reliance, of necessity, on expert judgment. In this paper, we describe a new, integrative approach for pre-Milestone A cost estimation called quantifying uncertainty in early life cycle cost estimation (QUELCE). QUELCE synthesizes scenario building, Bayesian belief network (BBN) modeling, and Monte Carlo simulation into an estimation method that quantifies uncertainties, allows subjective inputs, visually depicts influential relationships among change drivers and outputs, and assists with explicit description and documentation underlying an estimate. We use scenario analysis and dependency structure matrix (DSM) techniques to limit the combinatorial effects of multiple interacting program change drivers to make modeling and analysis more tractable. Finally, we describe results and insights gained from applying the method retrospectively to a major defense program.
Description: Cost Estimating / Defense Acquisition Community Contributor
Appears in Collections:Annual Acquisition Research Symposium Proceedings & Presentations

Files in This Item:
File SizeFormat 
SYM-CE-13-058.pdf711.98 kBAdobe PDFView/Open

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.