Systems Life Cycle Costing: Economic Analysis, Estimation, and Management, 1st Edition (Hardback) book cover

Systems Life Cycle Costing

Economic Analysis, Estimation, and Management, 1st Edition

By John V. Farr

CRC Press

316 pages | 130 B/W Illus.

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pub: 2011-06-20
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Description

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.

Table of Contents

Overview of Systems Life Cycle Costing

Introduction to 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

About the Author

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.

About the Series

Engineering Management

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Subject Categories

BISAC Subject Codes/Headings:
TEC009020
TECHNOLOGY & ENGINEERING / Civil / General
TEC009060
TECHNOLOGY & ENGINEERING / Industrial Engineering
TEC020000
TECHNOLOGY & ENGINEERING / Manufacturing
TEC032000
TECHNOLOGY & ENGINEERING / Quality Control