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9.1.1 Trade Study Cost Analysis Model
Author(s) -
Casey Ed,
Davis Desiree
Publication year - 2006
Publication title -
incose international symposium
Language(s) - English
Resource type - Journals
ISSN - 2334-5837
DOI - 10.1002/j.2334-5837.2006.tb02807.x
Subject(s) - weighting , schedule , bidding , operations research , process (computing) , computer science , cost estimate , relevant cost , reliability engineering , production (economics) , total cost , cost driver , order (exchange) , industrial engineering , engineering , economics , microeconomics , systems engineering , radiology , medicine , accounting , finance , operating system
The basic goal of a Cost‐Performance Trade Study is to find the optimum solution between several options that best balances cost, performance, risk and schedule given an agreed upon weighting. The Trade Study Cost Analysis Model was developed to support the CAIV trade study process by providing a means for the user to quickly and easily analyze alternative options. The model computes a rough order Life Cycle Cost (LCC) estimate for each study alternative, which can be compared giving the user a powerful input to the decision making process. The output should be considered a comparative estimate that is not the bottom line number, but rather the relative cost relationships between the alternatives. This model is not a bidding tool. The Trade Study Cost Analysis Model is primarily a predictor of Life Cycle costs and particularly Operation and Support (O&S) costs. Development and production costs are inputs to the model but not derived using the model. The Trade Study Model provides an estimate of the costs for the full life of the system/item being studied. While primarily hardware oriented, there is a software module embedded. The model has been designed to be used at the sub‐system and Lowest Repairable Unit (LRU) levels. Life Cycle Cost (LCC) Analysis is helpful to engineers in making decisions for trade study alternatives. They (LCC Analysis) are extensive and often require a great deal of time and resources to prepare. Included in this technical paper is the framework by which this model was created.