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A Method for Repricing Aircraft Procurement Programs
Stephen J. Balut, Thomas R. Gulledge Jr. and Norman Keith Womer
Vol. 37, No. 2 (Mar. - Apr., 1989), pp. 255-265
Published by: INFORMS
Stable URL: http://www.jstor.org/stable/171505
Page Count: 11
You can always find the topics here!Topics: Fixed costs, Variable costs, Cost estimates, Prices, Procurement, Cost estimation models, Learning curves, Direct costs, Cost allocation, Capital costs
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Planned annual procurement quantities for defense weapon systems are often altered after production starts. Department of Defense analysts support the decision process by providing cost estimates for alternatives to ongoing procurement programs. This paper presents a method for repricing aircraft programs under a proposed change in quantity. The method is an extension of the standard learning curve model that accommodates the redistribution of fixed costs at the contractor's plant.
Operations Research © 1989 INFORMS