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This study provides parametric O&S cost models for future US Navy aircraft acquisition programs based on physical and performance parameters. The proposed parametric cost models provide decision makers with a tool for developing rough-order-of-magnitude annual O&S cost estimates for future US Navy aircraft acquisition programs. The historic aircraft cost data was provided by the Naval Center for Cost Analysis (NCCA) in a spreadsheet format and the data were extracted from the Navy Visibility and Maintenance of Operating and Support Cost (VAMOSC) data warehouse. After validating the assumption that the average annual O&S cost for any aircraft type/model/series is constant from year to year, cost estimating relationships are developed. The first model developed is based on multivariate regression. In this case, forward stepwise regression was used to find the model with the best fit. Since the multivariate regression model turns out to be impractical, having more than 30 variables in the equation, a tree-based model is presented as an alternative. Additionally, single variable cost estimating relationships are formulated based on the physical and performance parameters length, weight, and thrust.
With few effective decision-making tools to assess the affordability of major weapon systems, management of total ownership costs is continually misunderstood. Cost analysis provides a quick and reliable assessment of affordability. Because there is no standardized method for calculating reliable estimates of operating and support (O&S) costs (the principal component of total ownership cost), this thesis formulates a parametric cost model which can be used to determine the annual O&S costs of U.S. Navy (non-nuclear) surface ships based on known (or assumed) physical characteristics and manpower expectations. Source data for the cost model is obtained from the Navy Visibility and Management of O&S Costs (VAMOSC) database, a historical cost database maintained by the Naval Center for Cost Analysis (NCCA). Through standard regression and data analysis techniques, cost estimating relationships are developed for three major cost drivers: ship light displacement, ship overall length, and ship manpower. The formulated parametric cost model is a top-level and fairly reliable representation of average annual O&S cost, and it can be used by the DOD cost community to perform component cost analyses or independent cost estimates.
This report documents the revisions of a parametric model for estimating Naval aircraft operating and support costs developed by Administrative Sciences Corporation. The model provides an estimate of average annual and life cycle O and S costs based on aircraft physical characteristics and basic program parameters using parametric cost-estimating relationships, cost factors and throughputs, and has been used to support numerous cost analyses prepared for CAIG review as well as other special studies such as the Naval Escort Force Mix Study and the Sea Based Air Study. It is updated often in order to remain responsive to each particular analysis, to reflect the changing nature of Naval aviation, and simply to remain timely. This report reflects the status of the model after incorporation of all FY1976 data. The bulk of the report is concerned with providing a clear, concise and complete definition of each cost element and the way it is estimated by the model.
The report is in two parts. Part I details the development and implementation of an operating and support cost model for aircraft carriers and surface combatants. Twenty-three O and S cost elements were identified and defined, with close adherence being maintained to the draft CAIG Operating and Support Cost Development Guide for Naval Ships, the Navy Resource Model (NARM), and the work of the Visibility and Management of Support Costs (VAMOSC) Study Group. Cost data were obtained from three principal sources: Navy Cost Information System (NCIS), NARM Program Factors, and the Center for Naval Analyses' SOCER Study. Procedures consisting of parametric cost-estimating relationships, cost factors and 'thruput' estimates were developed for the full set of cost elements. Those procedures were incorporated into an automated model which was then used to estimate annual O and S costs for the DD-963 and the FFG-7. Part II of the report summarizes all the work accomplished under the contract and provides a listing of all technical reports submitted. (Author).
In fiscal 1974, Administrative Science Corp. developed a parametric cost-estimating model which has been updated and documented several times and used to support numerous Defense Systems Acquisition Review Council (DSARC) reviews as well as other cost reviews. This report provides a detailed documentation of the cost-estimating relationships (CER's) developed from FY77 data. In addition, the report has been significantly enhanced in order to serve as a handbook and training aid for Op-96D aircraft analysts. For each cost element in the structure, this report provides: (1) a definition; (2) discussion of the definition and other aspects of how, where, and why these costs are incurred, points of contact including organizational codes and telephone numbers, historical data, and sources for planning data; (3) cost-estimating relationship, including all computational procedures, regression statistics for the CER, and the data base; (4) an alternative CER (in many cases) with the same detail as above; and, (5) an example calculation.
The following sample of a CAIG(Cost Analysis Improvement Group) Operating and Support Cost Estimate Report covering a hypothetical case has been developed to further assist the cost analyst in the preparation of cost estimating reports submitted to the DSARC and CAIG during the acquisition process of a new weapon system. The sample is intended to show an example of how Operating and Support Costs can be developed for CAIG review with available data bases and one example of an appropriate format for presentation of cost estimates. The existing A-7E data base was used only to illustrate the need to relate an estimate to an existing similar system and to ensure a constant relationship between values and the Cost Element Structure. Each case should address that data which is the most complete and accurate for its purposes. The level of detail depicted in this example may be greater than that which is available or appropriate to a specific case.
The following sample of a CAIG(Cost Analysis Improvement Group) Operating and Support Cost Estimate Report covering a hypothetical case has been developed to further assist the cost analyst in the preparation of cost estimating reports submitted to the DSARC and CAIG during the acquisition process of a new weapon system. The sample is intended to show an example of how Operating and Support Costs can be developed for CAIG review with available data bases and one example of an appropriate format for presentation of cost estimates. The existing A-7E data base was used only to illustrate the need to relate an estimate to an existing similar system and to ensure a constant relationship between values and the Cost Element Structure. Each case should address that data which is the most complete and accurate for its purposes. The level of detail depicted in this example may be greater than that which is available or appropriate to a specific case.
With the end of the Cold War, the winds of military downsizing are blowing all over the world. Downsizing means fewer personnel, less facilities and smaller military budget. Therefore, understanding the relationships among factors responsible for force operating costs is extremely important when facing downsizing budgetary decisions. This study analyzes the U.S. Navy main combatant vessels' Operating and support costs. It seeks to reveal basic relationships of O and S costs through accounting and structural methods. The accounting oriented analysis found the VAMOSC-SHIPS and Jane's combined database to be relatively accurate with the exception of nuclear submarines and nuclear aircraft carriers. The structural analysis found that the overhaul cost should be analyzed separately due to essential differences used to calculate overhaul costs and a 1985 policy revision to ship overhaul. O and S cost relationships between factors other than overhauls were strong. Manpower was found to have the most dramatic effect on determining O and S costs.
This report provides the updated equations using fiscal 1978 data for the Administrative Sciences Corporation Aircraft Operating and Support (O & S) Cost-Estimating Model. It is intended to be used as an addendum to Naval Aircraft Operating and Support Cost-Estimating Model - FY77 Revision, ASC-R-120, February 1979, which contains an extensive discussion of each cost element as well as other background material. Several initiatives to improve the quality and accuracy of the cost-estimating relationships were incorporated into this version of the model. The most notable is the examination of Replenishment Spares consumption over a two-year period rather than a single year. As more data becomes available, the period will be lengthened even more. Substantial work was also done in the areas of Engine Rework and Modifications. For engines, the recently implemented Engine Analytical Maintenance Plan which has changed the Navy's engine maintenance philosophy for most engines from one of scheduled overhaul to one without scheduled overhaul was investigated. This new policy provides for engine components to be replaced/overhauled periodically but not the entire engine. Although much useful data was obtained on engine removal rates and differentiation of maintenance costs for engines utilized in different aircraft (e.g., the J52-P8 in the A-4E and the A-6E); the data does not yet reflect the new maintenance policy.
This research provides justification for experimenting with system dynamics (SD) for performing Operation and Support Cost estimates. For the C-17 Globemaster III cargo aircraft, these costs could exceed $64 billion dollars. Also, many of our weapon systems are beginning to reach the end of their effective life span, and discussions about the impact of aging, on aircraft, has become a hot topic in the literature. System Dynamics is a modeling methodology developed in 1958, but never used extensively for cost estimating. SD offers unique capabilities to the cost estimator, including the ability to model causal relationships. This capability offers the cost estimator the ability to estimate O&S costs, spares availability, and mission capable rates, throughout the life span of a weapon system. The primary goal of this thesis endeavor is to prove the applicability of SD for cost estimating by demonstrating the various outputs of a SD model, including fixed and variable costs; secondarily, showing how the results from the SD model can provide a better estimate of future costs, when compared to models in use today.