Posted by Investigating Shifts in Engineering Manufacturing Development (EMD) Factors for Department of Defense Assets through Decadal Analysis
From the Journal of Cost Analysis and Parametrics: Volume 12 | Issue 1 | January 2025
Downloadable File: JCAPv12i1-ShiftsinEMDforDODAssets-Smith
Abstract: Analysts and estimators often use cost factors to estimate future costs throughout several phases of a weapon system’s development. Factors can be used as a primary methodology early in development when few programmatic or technical details are known, or as a secondary crosscheck throughout later development to assess other estimating methods. This research focuses on factor development for the Engineering and Manufacturing Development phase and uniquely investigates Level 2 Work Breakdown Structure elements to assess any changes or trends over time. Using standardized cost reports (DD 1921) as a basis, we analyzed seven decades and eight WBS elements by commodity type, contract and contractor type, and service branch. After completing several statistical tests, we determined which factors were stable, increasing, decreasing, or unpredictable over time. Our research empirically substantiates the need to evaluate data points (i.e. programs) carefully prior to inclusion for factor development rather than relying on simpler rules of thumb, such as use the ‘latest data’ or include ‘all available data.’
Authors: Captain Michael J. Smith is the Lead Cost Analyst, Missile Warning/Missile Tracking program, SNF, Los Angeles Air Force Base, California. Captain Smith enlisted in the Air Force following his graduation from Northwest University, WA. He then commissioned to Second Lieutenant through Officer Training School, Maxwell AFB, AL. He attended the Air Force Institute of Technology and received a Masters in Cost Analysis at Wright Patterson AFB, OH.
Dr. Brandon M. Lucas is an Assistant Professor of Systems Integration & Cost Analysis in the Department of Systems Engineering and Management at AFIT. He holds a BA in History from the University of Texas at Austin, a MA in International Relations and ME in Teacher Education from the University of Oklahoma, a MS in Cost Analysis from AFIT, and a PhD in Economics from George Mason University. Dr. Lucas’ research interests include profit analysis, cost & economic analyses, and incentive structures.
Dr. Jonathan D. Ritschel is an Associate Professor of Cost Analysis in the Department of Systems Engineering and Management at AFIT. He received his BBA in Accountancy from the University of Notre Dame, his MS in Cost Analysis from AFIT, and his PhD in Economics from George Mason University. Dr. Ritschel’s research interests include public choice, cost analysis, and economic institutional analysis.
Dr. Edward D. White is a Professor of Statistics in the Department of Mathematics and Statistics at AFIT. He received his BS in Mathematics from the University of Tampa, MAS from The Ohio State University, and PhD in Statistics from Texas A&M University. His primary research interests include statistical modeling, simulation, and data analytics.
Mr. Shawn M. Valentine is an Operations Research Analyst at AFLCMC/FZCE at Wright Patterson AFB, Ohio. Mr. Valentine graduated from Ohio University with a Bachelor of Science (BS) in Actuarial Science and a Master of Science (MS) in Financial Economics.