Welcome to Volume 8, Issue 3 of the Journal of Cost Analysis and Parametrics. We have three excellent articles that cover a variety of cost estimating and analysis topics.
The first article discusses the specific application of the Weibull and beta distributions to time-phasing research and development costs for aircraft. The Weibull and beta distributions have long been used in phasing of research and development costs. A common rule of thumb in cost is that 60% of the cost is spent half way through the schedule. The authors discuss this, and show how their research improves upon this, specifically as it applies to aircraft. The second article introduces a modification of duration-based cost to provide insight into fixed and variable costs. Duration-based costing is a recent innovation and is based upon the older notion of activity-based costing, which involves detailed bottom-up costing of individual activities. The author provides evidence that duration-based costing is a viable method that is less complex than activity-based costing. The third article in this issue concerns realism in cost risk analysis. All too often, cost risk analyses for government programs underestimate risk and uncertainty. The result is budgets that do not properly account for this, leading to cost growth. The author analyzes cost growth data for 289 Department of Defense and NASA programs to calibrate cost growth data to establish risk distributions that reflect the amount of risk seen in practice. The cost growth data are found to fit a lognormal distribution and the author provides an equation to develop realistic risk distributions for point cost estimates. The author notes that traditional cost risk analyses tend to be conditional risk distributions that assume away much of the risks inherent in a program.
These are all practical and timely articles. I am confident that you will find that the information presented in the current issue will provide you with techniques and ideas that you can apply to your work as a cost analyst or researcher.
Thanks to JCAP editor Ricardo Valerdi for guiding these articles to publication, to the referees for providing critical per review for these articles, and to the authors for taking time to provide their valuable contributions to the journal.
Christian Smart
Managing Editor