Corporate Library
Parametric Cost Analysis for Evolving Technologies
Evin Stump - Senior Consultant, Galorath Incorporated
Commercial and in-house parametric cost models are widely used in the aerospace industry to predict development and production costs of high value systems that fly in the atmosphere or beyond. Parametric models are widely believed to provide the most accurate cost forecasts in the early stages of projects when much about the project is still undefined or vague. Because this is precisely the stage at which the most significant cost driving decisions about the project tend to be made, parametrically estimated costs can play a crucial role in project success.
When dealing with evolving technologies, expert judgment inevitably becomes a necessary adjunct to limited "hard" data. This paper describes a process developed by Galorath Incorporated to mold sparse data and expert judgment into a useful parametric cost model.