A Method for Repricing Aircraft Procurement Programs

Planned annual procurement quantities for defense weapon systems are often altered after production starts. Department of Defense analysts support the decision process by providing cost estimates for alternatives to ongoing procurement programs. This paper presents a method for repricing aircraft pr...

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Bibliographic Details
Published in:Operations research 1989-03, Vol.37 (2), p.255-265
Main Authors: Balut, Stephen J, Gulledge, Thomas R., Jr, Womer, Norman Keith
Format: Article
Language:English
Subjects:
Aircraft
Analysis
Annuals
Applied sciences
Capital costs
Cost allocation
cost analysis: estimating costs of defense systems
Cost estimates
Cost estimation models
Direct costs
Exact sciences and technology
Fixed costs
Inventory control, production control. Distribution
Learning curves
Management science
Mathematical models
military, defense systems: military aircraft procurement
Monte Carlo simulation
Operational research and scientific management
Operational research. Management science
planning, government: DoD planning and budgeting
Procurement
Purchasing
Sensitivity
Variable costs
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Description
Summary:Planned annual procurement quantities for defense weapon systems are often altered after production starts. Department of Defense analysts support the decision process by providing cost estimates for alternatives to ongoing procurement programs. This paper presents a method for repricing aircraft programs under a proposed change in quantity. The method is an extension of the standard learning curve model that accommodates the redistribution of fixed costs at the contractor's plant.
ISSN:0030-364X
1526-5463
DOI:10.1287/opre.37.2.255