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Estimating Parameters and Gathering Data 61 Most of the differences between the NAVAIR data and the other sources are probably due to the grouping of related developments into a single observation. This grouping of developments into a sin- gle observation was a problem with some of the older studies. In some studies, it was clear which dash numbers were included in a group; in other studies, it was not. Another source of variation is whether the related experimental engine (the “X” or “Y” prototype engine) was included in the development cost (see the “Daley and Richey” and “NAVAIR database + X/Y engine” values in Figure 5.3). For our analysis, we isolated development costs by dash number and excluded the experimental engine cost. Of all the cost data we examined, the NAVAIR cost data were the most consistent with our approach. Other minor differences between NAVAIR data and other sources are likely due to various adjustments that were made to the cost data by researchers in earlier studies to state the values on a fixed-year basis.7 Normally, in parametric analysis, the dependent term (y) is known fairly accurately. However, with this example, significant uncertainty exists in how accurately we know the “true” development cost. Pro- vided that the uncertainty is truly random (i.e., we have not introduced a systematic bias), the information can still be used for parametric purposes; however, one should expect the residual errors to be relatively high for any relationship. To perform a similar validation on our production data, our sources of alternative data were much more limited. The only studies to which we had access and that had published unit lot costs and technical and performance data were Nelson (1977) and Large (1970). The production values in RAND studies prior to this one and the NAVAIR data differed by only a few percentage points. In this chapter, we summarized the parameters for the various turbo- fan engines in our database and our efforts at validating those data. We also described a series of technical risk and maturity measures that we applied to each engine. In the next chapter, we use that data and those measures to develop CERs for development cost, devel- opment time, and production cost of military jet engines. ______________ 7An exact time frame is not shown in Figure 5.3 due to the sensitive nature of that data.PDF Image | Military Jet Engine Acquisition Technology Basics and Cost-Estimating Methodology
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