Posted by Predicting Final CPI
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Predicting Final CPI – Coleman
Abstract
Estimating the EAC based on current performance has traditionally been a point estimate or, at best, a range based on different EAC calculations (CPI, SPI, CPI*SPI, etc.). NAVAIR is in the midst of revising their EVM Toolkit, which incorporates the formation of an EAC. This paper provides the EVM analyst with a predicted Final CPI (and thus EAC), and also provides a confidence interval around the predicted value. This will enable analysts to determine where the program EAC falls on the cumulative probability distribution and to calculate the likelihood of achieving a favorable Final CPI (e.g., the probability of a Final CPI of 1.0 or better). The rule of thumb that EACs never improve over their values at 20% complete is analyzed and found to be generally true, but with some exceptions. This paper is based on work by Michael Popp on distributions of Final CPI given Current CPI and % Complete for both development and production programs. This follow-on paper explores the larger patterns at work and discovers overarching trends in CPIs.
Author(s):
R.L. Coleman
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.
M.E. Dameron
Ms. Dameron graduated summa cum laude from the College of William and Mary in 1999 with a B.S. in Mathematics and Economics. Since her graduation, she has been working as a cost analyst at TASC, Inc. She performed cost and risk analysis for the Gold Team 21st Century Destroyer program (DD 21). In addition, she is part of a project team conducting cutting edge cost growth analysis for NAVAIR. She also provides cost and risk support to the intelligence community.
J.R. Summerville
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.
H. F. Chelson
Ms. Chelson graduated from the College of William and Mary with a B.S. in Mathematics and Economics in 1993. She received an M.B.A. from George Mason University in 1996. During and after completion of her M.B.A., she worked for TRW finance supporting various programs in the intelligence community. In 1998, she joined TASC, Inc., where she works as a cost estimator for NAVAIR, the Intelligence Community, and the Design Agent Team of the Navy’s 21st Century Destroyer Program, DD(X). In her capacity as lead cost analyst, she has participated in the creation of cost models, development of CARDs, and conducted several Independent Cost Estimates on automated information systems for her various customers. She has also been integral in incorporating cost and schedule risk into the estimates that support the National Imagery and Mapping Agency.
S. L. Van Drew
Dr. Van Drew is Deputy Division Head for the Special Studies and Databases Division of the Naval Air Systems Command’s Cost Department at Patuxent River NAS, MD. Prior to joining NAVAIR Steve was with the Defense Acquisition University Ft. Lee, VA Campus where he taught courses in cost estimating and cost risk analysis. Steve has also been a faculty member at Mercer University in Macon, GA, Old Dominion University in Norfolk, VA, and the US Military Academy at West Point, NY. Steve received his BS in general engineering from the US Military Academy and his MS and PhD degrees in Mineral Economics (Operations Research) from the Colorado School of Mines in Golden, CO. Following graduation from West Point, Steve served as an Army officer for 14 years with an assortment of air defense artillery and operations research/systems analysis assignments. Steve is a licensed professional engineer in Virginia.