Estimating and Explaining the Production Cost of High-Technology Systems: The Case of Military Aircraft

摘要

This study tests relationships between measures of the state-of-the-art of technology and advances in technology with production cost. The analysis is conducted using a sample of military aircraft. Parametric cost estimating models are developed. Actual production costs are compared with estimated production costs predicted from the models to create measure of cost overruns and cost underruns. A set of factors that are associated with instances of cost over/underruns are identified. These factors reflect aspects of the aircraft program, the political and economic environment at the time of commencement of production on the aircraft program, and the financial condition of the prime contractor. Keywords: Regression analysis, Cost models, Cost variances, Aircraft procurement. (KR)