A Multidisciplinary Research Approach to Cost Estimating

1
A Multidisciplinary Research Approach to Cost
Estimating
2
Introduction

• Background
• Past Research
• Current Findings
• Future Direction

3
Background

• Acquisition
• Regression Modeling
• Cost Research
• Thesis Orientation

4
Past Research

• Genesis Point
• Sipple, White, and Greiner 2004
• Two-Pronged Approach
• Multiple and Logistic Regression

5
Logistic Regression

• Used Extensively in Health Sciences
• Predicts Binary Responses
• Research Utilized this Technique to Predict the
  Likelihood of Cost Growth
• Probability Estimates are within Theoretical
  Bounds

6
Logistic Regression Cont.
7
Multiple Regression

• Used to Predict Increase of Cost Given
  Propensity for Cost Growth
• Natural Logarithm Utilized to Overcome
  Non-Constancy of Model Residuals
• Transformation not Needed for Schedule Slippage

8
Mixed Distribution
9
EMD Schedule Variance
10
Current Findings

• Historical Selected Acquisition Reports (SARs)
• Engineering, Estimating, Schedule, and Support
  Cost Variances
• EMD, RDTE, and Procurement
• Publications

11
Scope of Findings
12
Publications

• Cost Engineering
• Defense Acquisition Review Journal (DARJ)
• Journal of Cost Analysis and Management (JCAM)
• Journal of Public Procurement (JoPP)
• Military Operations Research (MOR)

13
Future Direction

• SARs
• Longitudinal Versus Cross-Sectional
• GAO 2005 Report
• Number of Rebaselines

14
Example
15
Conclusions

• Incorporating Other Disciplines Methodology can
  Prove Beneficial
• Ordinary Least Squares Regression is NOT the Tool
  for All Regression Problems

16
Research Publications

• Predicting RDTE Cost Growth, Journal of Cost
  Analysis and Management (Fall), 1-12, D. C.
  Genest and E. D. White, 2005.
• Refinement of Estimates Using Logistic and
  Multiple Regression to Predict Cost Growth,
  Military Operations Research, 10(3), 45-56, J.
  Bielecki and E. D. White, 2005.
• Estimating Cost Growth From Schedule Changes A
  Regression Approach, Cost Engineering, 47 (8),
  28-34, J.V. Bielecki and E. D. White, 2005.
• A Regression Approach for Estimating Procurement
  Cost, Journal of Public Procurement, 5(2),
  187-209, G. W. Moore and E. D. White, 2005.
• Investigating Schedule Slippage, Defense
  Acquisition Review Journal, 12(2), 176-193, J. V.
  Monaco and E. D. White, 2005.
• A Two-Pronged Approach to Estimate Procurement
  Cost Growth in Major DoD Weapon Systems, Journal
  of Cost Analysis and Management (Winter), 11-21,
  M. B. Rossetti and E. D. White, 2004.
• RD Budget-driven Cost and Schedule Overruns,
  Journal of Cost Analysis and Management (Summer),
  80-97, E. J. Unger, M. A. Gallagher, and E. D.
  White, 2004.
• Using Logistic and Multiple Regression to
  Estimate Engineering Cost Risk, Journal of Cost
  Analysis and Management (Summer), 67-79, E. D.
  White, V. P. Sipple, and M. A. Greiner, 2004.
• Surveying Cost Growth, Defense Acquisition Review
  Journal, 11(1), 78-91, V. P. Sipple, E. D. White,
  and M. A. Greiner, 2004.

17
References

• Hosmer, D. W., and S. Lemeshow. 1989. Applied
  Logistic Regression. New York Wiley Sons.
• Levin, Robert E. "DEFENSE ACQUISITIONS
  Information for Congress on Performance of Major
  Programs Can Be More Complete, Timely, and
  Accessible," G.A. Office (ed.), 2005.