Analogies: Techniques for Adjusting Them
CEBok Reference Track
The three basic methods of cost estimation are generally accepted to be Parametric, Analogy and Build-up. Considerable attention is devoted to research in parametric methods, generally in higher-level and oversight organizations, and for early studies. Likewise, great expertise is resident in manufacturing sector in Build-up methods. The technique of analogy receives surprisingly little attention in research or in development of methods. Practitioners are enjoined to “find the best match and adjust it if necessary.” The issue of what exactly constitutes a best match and how to adjust are left to the practitioner. This paper will discuss the usual method, linear adjustment based on a single parameter such as weight or size (often called “J-ing up”), and will recommend two other methods as preferable to straight linear adjustment: one which borrows a slope from a cost estimating relationship, when one exists, and the other that develops a factor from the geometry of correlation, and which arises from a previous paper by the authors. The reasons for these methods being preferable will be presented, and an illustrative case study with actual data will be shown. The problem of finding a best match is not trivial and is not solved in this paper, but it will be discussed briefly for completeness.
Richard L. Coleman, TASC
Mr. Coleman was commissioned upon graduation from the United States Naval Academy on 5 June 1968, where he received a B.S. in Naval Engineering with a minor in Operations Analysis. He received a Master of Science Degree in Operations Research (With Distinction) from the Naval Postgraduate School in Monterey, California in September 1974. Graduating first in his class, he was the recipient of the Chief of Naval Operations Award for Excellence in Operations Research. In the Navy, his career culminated in tours as Commanding Officer of USS Dewey (DDG 45) and Director, Naval Center for Cost Analysis. His awards include the Legion of Merit, the Meritorious Service Medal with two Gold Stars, and the Navy Commendation Medal with one Gold Star. He retired from active duty as a Captain, U. S. Navy in 1993. Since retirement, he has worked for TASC, Inc. He conducts risk analysis at the Ballistic Missile Defense Office and NAVAIRSYSCOM. He supports the Navy’s Acquisition Reform Office in Cost as An Independent Variable (CAIV) & Total Ownership Cost. He leads the Gold Team in cost analysis of the Navy’s 21st Century Destroyer (DD 21). Additionally, he supports the intelligence community in cost, risk and CAIV. He is a Regional Vice President of the Society of Cost Estimation and Analysis. He was a co-author of two papers at the 1998 ISPA/SCEA International Conference, one on CAIV and Total Ownership Cost, awarded Best Paper in Acquisition Reform, and one on Cost Risk, winning Best Paper Overall, and a co-author of a paper that won Best Paper in CAIV at the 1999 ISPA/SCEA International Conference.
Jessica R. Summerville, TASC
Ms. Summerville graduated with a B.A. in Mathematics from the University of Michigan in 1994. She received an M.S. in Operations Research from the College of William and Mary in 1995. During her Masters program, she worked as a Programmer/Analyst at SAIC in support of NASA’s Earth Radiation Budget Experiment. Upon graduation, she joined TASC, Inc., where she works as a cost estimator and risk analyst in support of the Ballistic Missile Defense Organization (BMDO), NAVAIR, the intelligence community, and the Cost Development Team for the Gold Team of the Navy’s 21st Century Destroyer Program (DD 21). Her cost estimating duties have involved lead analyst for National Missile Defense (NMD) radar systems and the Patriot Advanced Capability (PAC-3) missile system. In her capacity as Lead Analyst for Cost Risk for several organizations, she oversees the conduct of Schedule and Technical Risk Assessments and Cost Risk Analysis. In addition, she is a key member of multiple teams and working groups that perform research and modeling to advance the development of cost risk analysis.
Shishu S. Gupta, IC CAIG