Posted by Projecting Future Costs with Improvement Curves: Perils and Pitfalls
From the Journal of Cost Analysis and Parametrics: Volume 10 | Issue 3 | November 2022
Downloadable File: JCAPv10i3-ProjectingFutureCostswithImprovementCurves-Johnstone
Abstract: Improvement curves are one of the most common projection tools used by cost estimators. Their use is surrounded however by perils and pitfalls. Common errors include: the fallacy of “straight edge and graph paper” projection, the dangers of recovery slopes, failure to understand how development and production environments differ, and the dangers of using learning curve slopes to measure production line efficiency. This paper examines these potential pitfalls and proposes ways to avoid them.
Author: Brent M. Johnstone is a Technical Fellow and production air vehicle cost estimator at Lockheed Martin Aeronautics Company in Fort Worth, Texas. He has 34 years’ experience in the military aircraft industry, including 31 years as a cost estimator. He has worked on the F-16 program and since 1997 has been the lead Production Operations cost estimator for the F-35 program. He has a Master of Science from Texas A&M University and a Bachelor of Arts from the University of Texas at Austin.