1st Edition
Systems Life Cycle Costing Economic Analysis, Estimation, and Management
Although technology and productivity has changed much of engineering, many topics are still taught in very similarly to how they were taught in the 70s. Using a new approach to engineering economics, Systems Life Cycle Costing: Economic Analysis, Estimation, and Management presents the material that a modern engineer must understand to work as a practicing engineer conducting economic analysis.
Organized around a product development process that provides a framework for the material, the book presents techniques such as engineering economics and simulation-based costing (SBC), with a focus on total life cycle understanding and perspective and introduces techniques for detailed analysis of modern complex systems. The author includes rules of thumb for estimation grouped with the methods, processes, and tools (MPTs) for conducting a detailed engineering buildup for costing. He presents the estimating costing of complex systems and software and then explores concepts such as design to cost (DTC), cost as an independent variable (CAIV), the role of commercial off-the-shelf technology, cost of quality, and the role of project management in LCC management.
No product or services are immune from cost, performance, schedule, quality, risks, and tradeoffs. Yet engineers spend most of their formal education focused on performance and most of their professional careers worrying about resources and schedule. Too often, the design stage becomes about the technical performance without considering the downstream costs that contribute to the tota1 life cycle costs (LCC) of a system. This text presents the methods, processes, and tools needed for the economic analysis, estimation, and management that bring these costs in line with the goals of pleasing the customer and staying within budget.
Overview of Systems Life Cycle Costing
Systems Life Cycle Costing
Economic Analysis
Cost Estimation
Cost Management
Summary
Questions
Bibliography
References
Introduction to Engineering Economy
Introduction
The Capital Budgeting Decision
Time Value of Money
Amortization
Investment Measures
Inflation/Deflation
Summary
Question
Problems
Bibliography
Reference
Advanced Economic Analysis of Alternatives
Introduction to Advanced Cash Flow Analysis
Income and Cash Flow Statements
Expected Value
Sensitivity Analysis
Break-Even Analysis
Summary
Questions
Problems
Bibliography
Reference
Life Cycle Framework and Techniques
Introduction to Developing Life Cycle Models
Developing LCC Models
Life Cycle Cost Categories
Estimating LCC Throughout the Product
Development Cycle
Summary
Questions
Problems
Bibliography
References
Simulation-Based Costing
Introduction
Review of Probability and Statistics
Discrete Process Generators
Continuous Process Generators
Probability and Statistics Summary
Simulation in Practice
Using Readiness Levels for Model Input
Simulation Using Spreadsheets
Building Systems Simulations
Summary
Questions
Problems
Bibliography
References
Appendix 5A
Costing of Complex Systems
Introduction
Issues Surrounding Complex Systems
Systems Engineering and Management Costs
From Requirements to Architectures
Summary
Questions
Problem
Bibliography
References
Software-Intensive Systems
Introduction
Software Estimating Techniques
Summary
Questions
Problems
Bibliography
References
Appendix 7A
Parametric Cost Estimating
Introduction
The Role of Statistics
Some CERs of Interest
Summary and Conclusions
Questions
Problems
Bibliography
References
Cost as an Independent Variable
Introduction
CAIV Evolution Through the Life Cycle
CAIV Metrics
Design to Cost versus CAIV
Summary
Questions
Bibliography
References
Costing and Managing Off-the-Shelf Systems
Introduction
COTS
GOTS
Software Reuse
Open Source
Summary
Questions
Problems
Bibliography
References
Cost of Quality
Introduction
Six Sigma
CMMI
Generic Cost of Quality Models
Conclusions
Questions
Problems
Bibliography
References
Project Management’s Role in Life Cycle Costing
Introduction
Basics of Networks
Work Breakdown Structure
Progress Measurement
Monte Carlo Simulation of Networks
Summary
Question
Problems
Bibliography
References
Appendix A: Abbreviations and Acronyms
Appendix B: Excel® Tutorial to Support Economic Analysis and Simulation-Based Costing
Index
Biography
John Farr, Ph.D., P.E. is the leader of a highly acclaimed systems engineering and engineering management school who possesses a wealth of private, government, and educational management experience who has a proven track record in growing academic and research programs.
