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Chapter Six STATISTICAL ANALYSIS In this chapter, we describe the parametric development cost, pro- duction cost, and schedule estimating relationships that we found when analyzing historical turbofan engine cost data. We determined each of the cost-estimating relationships through a series of least- square regressions (both stepwise and ordinary) using the criteria for including parameters in developing parametric relationships de- scribed in Chapter Five. In determining these relationships, we were unable to incorporate, or chose not to use, all the available parameters from the database. First, we have far too few observations (i.e., too few degrees of free- dom) to create relationships that complex. Second, some parameters do not correlate significantly with respect to the dependent variable. For example, we did not see any meaningful difference between Navy and Air Force engines (after accounting for the other parame- ters). Third, many of the parameters themselves are correlated. For example, thrust-to-weight ratio could be used instead of rotor inlet temperature as a parameter in a development-cost parametric rela- tionship. However, the resulting relationship would be slightly less desirable from a statistical standpoint. In any event, one should not include both of those variables in determining the resulting cost- estimating relationship because either parameter would serve to ex- plain the same sort of variance in the sample—i.e., both are proxies for technological risk and improvement.1 ______________ 1A cost estimating relationship is basically a regression model where the dependent variables (in our case, development cost, development schedule and productions cost) are correlated to a series of independent variables. The goal of this analysis is to use 63PDF Image | Military Jet Engine Acquisition Technology Basics and Cost-Estimating Methodology
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