Posted by Step-Down Functions in Airframe Learning Curves: Do They Exist?
From the Journal of Cost Analysis and Parametrics: Volume 10 | Issue 3 | November 2022
Downloadable File: JCAPv10i3-Step-DownFunctionsAirframeLearningCurves-Moore
Abstract: Defense cost analysts employ a multitude of techniques to estimate the cost of a weapon system. One of the most widely accepted and utilized techniques is learning curve analysis. Learning curves are traditionally used to estimate recurring costs in a production process (Mislick & Nussbaum, 2015). While previous researchers have studied learning curves along a multitude of dimensions, one area that lacks empirical examination in defense programs is the concept of a step-down function. This lack of empirical examination has led to some debate on whether step-down functions should be employed in cost estimates. We examine the evidence in military fighter airframes to shed light on the issue. Thus, the purpose of this article is four-fold: 1) empirically detect step-down functions in defense aircraft programs 2) examine the impact of weight normalization on step-down functions 3) analyze factors that impact step-down functions and 4) develop an empirically based Cost Estimating Relationship (CER) to predict first unit production costs based upon development unit cost data.
Authors:
Captain Susan Moore, is a cost analyst at the Space Systems Command, Los Angeles AFB, CA. She holds a BS in Business Administration with a concentration in Finance from the University of California, Riverside and a MS in Cost Analysis from the Air Force Institute of Technology (AFIT). Her primary research interests include learning curves, public choice, and cost analysis.
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.
Lt Col Clay M. Koschnick, PhD, is an Assistant Professor of Systems Engineering in the Department of Systems Engineering and Management at AFIT. He received his BS in Operations Research from the United States Air Force Academy, his MS in Operations Research from the Georgia Institute of Technology, and his PhD in Industrial and Systems Engineering from the University of Florida. His research interests including engineering economics, decision analysis, and econometrics.
Dr. Brandon M. Lucas is an Assistant Professor of 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.
Mr. Shawn M. Valentine is an Operations Research Analyst at AFLCMC Cost Staff, Wright-Patterson Air Force Base, Ohio. He holds a BS in Actuarial Science from Ohio University and an MS in Financial Economics from Ohio University. He currently acts as the research technical lead at AFLCMC where he engages in Air Force research initiatives related to aircraft.