Parametric Costing

摘要

The use of parametric costing on a recent government proposal saved 1,000 hours and helped to promote the use of less expensive design alternatives. In the past, our company has used the bottoms-up and similar-to basis of estimate (BOE) approaches to determine program development costs. On a recent project, in response to the government's "cost as independent variable" (CAVV) initiative, our firm tried the parametric costing approach in conjunction with the BOE approach. A commercial knowl-edge base consisting of extensive industry data was used to estimate the development and production cost of a new sys-tem. The use of the knowledge base saved a considerable amount of research time and guesswork on the part of the cost engineer and made it possible to evaluate alternative approaches on a much timelier basis. The conclusion of the development team was that the parametric costing approach provides a useful alternative to the bottoms-up and BOE approaches that could offer significant benefits in many future programs.