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Estimating Relationship Development Spreadsheet and Unit-as-an-Independent Variable Regressions

Parametrics Track




MCR has constructed an estimating relationship (ER) development spreadsheet based on the zero percent bias, minimum percent error (ZMPE) regression technique to help with more credible and efficient development of cost improvement curves and cost estimating relationships (CERs). The CER-development method accommodates linear, power and triad functions with single and multiple technical and dummy independent variables. Furthermore, the ER development spreadsheet may be modified to accommodate other functional forms that may be of value in particular contexts. The mathematically-enhanced MCR spreadsheet overcomes the two common drawbacks that have associated with ZMPE, namely local minimization traps and lack of significance testing. We describe the methods applied to circumvent these obstacles and how the ER development spreadsheet can be used to perform unit regressions of first unit and 1000th unit costs as well as other unit regressions of multiple lot data using a single step process called unit-as-an-independent variable (UAIV). The ER development spreadsheet also provides a presentation-ready view of the regression and resulting CER.


Raymond P. Covert
Raymond P. Covert, Technical Director and Chief Practitioner for Cost and Schedule Analysis at MCR, is responsible for ensuring technical excellence of MCR products, services, and processes by encouraging process improvement, maintaining quality control, and training employees and government and industrial customers in cost and schedule analysis and associated program-control disciplines. He has given numerous technical and tutorial presentations on cost-risk analysis, cost-estimating relationship development, and other statistical aspects of cost and economics to DoD, NASA, and EACE (European Aerospace Working Group on Cost Engineering) Cost Symposia, the AF/NASA/ESA Space Systems Cost Analysis Group (SSCAG), and professional societies such as the International Society of Parametric Analysts (ISPA), Society for Cost Estimating and Analysis (SCEA), Military Operations Research Society (MORS), U.K. Association of Cost Engineers (ACostE), and the American Institute of Aeronautics and Astronautics (AIAA).

Noah L. Wright
MCR Federal, LLC
Mr. Wright is a junior Cost and Project Control Analyst at MCR, LLC. He has been involved with developing Cost Estimating Relationships and factors for missile programs. Prior to working with MCR he served for five years in the Marine Corps with two air control squadrons as an air control electronics operator. His specific experience covers both cost and schedule with regards to analysis and estimating, along with cost modeling using advanced statistical methods, and schedule development and maintenance. He received his BS in Business Administration degree in 2009 from the University of Central Florida and is currently a 2013 MBA Candidate at Rollins College.