Original Date: 03/08/1999
Revision Date: 01/18/2007
Best Practice : Simulation Based Design Cost Estimating
The Applied Research Laboratory at the Pennsylvania State University (ARL Penn State) developed and implemented a Simulation Based Design (SBD) Cost Estimating system to perform rapid financial evaluations of virtual prototypes. The system uses commercial-off-the-shelf (COTS) cost estimating software (PRICE Enterprise Edition) to directly obtain data from the design server and generate a product cost estimate during the early design phase of the acquisition process. Hardware, software development, procurement and support costs are estimated parametrically. This software also provides sufficient cost, schedule, and reliability information for early concept design stage and bid proposal efforts. By changing the design parameters, the SBD Cost Estimating system can rapidly evaluate cost, schedule, and reliability data for various product configurations. Previously, product estimates involved time consuming, manual processes to develop proposals.
A product cost model template is created within the COTS cost estimating software. Design, production, and deployment data are developed from the SBD server and fed into the model. Input product parameters include volume, weight, complexity, production start/end dates, quantity, and years of deployment. The custom interface software then reads the input data files and writes output data files. The complexity can be calibrated using similar product historical data to provide more accurate cost, schedule, and reliability output parameters. Output product parameters include total program cost, unit production cost, tooling, test equipment, design, project management, labor, material, production end date, mean time between failures (non MIL-SPEC), and operational readiness.
By using the SBD Cost Estimating system, the ARL Penn State can cost effectively evaluate 100 product configurations in an hour, compared to weeks or months for manual preparation. This system rapidly provides an extensive amount of cost, schedule, and reliability product information for the rapid evaluation of design/decision alternatives. Informed decisions can be made early in the proposal and acquisition processes for military and commercial products.
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