• Predictive Analytics for Improved Cost Management  



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Original Post Date: Wednesday, September 25, 2013 These days bidding can be a game, and contractor leadership is constantly making decisions on whether to take on risk in order to stay competitive or to bid conservatively for the safety of not overrunning.  You may complete a cost model for a program, and spend time analyzing the uncertainties behind each input and in the end find that your estimate lands at the 30% confidence level.  After some strategic analysis, the bid leadership team decides, we would like to bid at the 80% Confidence level, “please present your estimate to support that total”.  ...
Original Post Date: Wednesday, September 25, 2013 A current consulting client has expressed interest in modeling scheduled overhauls, above and beyond scheduled maintenance. The latter is well-addressed by TruePlanning. Our challenge is to utilize the model and its calculated lifecycle metrics to estimate the former as well. We have recently developed an approach to address this specific need that I’d like to share with you here. Terminology is important to level-set.  Notwithstanding replacement procurement, restoring equipment readiness via operations & maintenance activities usually falls into one of three funded categories[1]:  Inspection/ Repair at the organizational and/or direct support ...
Original Post Date: Wednesday, September 25, 2013 During a recent Analysis of Alternatives (“AoA”) consulting project, our customer asked that we provide more insight into TruePlanning’s System and Assembly objects, which in our AoA context we termed Systems Engineering/ Program Management (SE/PM) and Alternative Integration/ Test, respectively. The customer’s challenge was understanding our parametric model’s treatment of principally hardware-COTS objects, combined with other cost, purchased service and training objects.Our Chief Scientist, Arlene Minkiewicz, provided us with insights that I’d like to share with you, as well as my views on how we at PRICE systems have consistently used these parent ...
Original Post Date: Wednesday, September 25, 2013 It is impossible to find a news website or magazine that is not full of articles on the effects of Sequestration.  As a cost estimator, I find the topic very interesting (and troublesome).  The immediate effects of Sequestration are widely discussed.  However, I do not see quite as much news coverage on the second and third order effects of this extremely complex policy decision. The Department of Defense (DoD) has a specific target that must be removed from the budget over the next 10 years.  Some analysts claim a doomsday scenario.  Others claim it ...
Original Post Date: Wednesday, September 25, 2013 In a recent National Public Radio (NPR) interview, Winslow Wheeler (Director of the Straus Military Reform Project of the Project on Government Oversight in Washington, D.C.), spoke on the recent problems with the Joint Strike Fighter acquisition process.  “Wheeler explained that Lockheed Martin, the manufacturer of the jet, uses a pricing vocabulary that masks costs. ‘Flyaway costs, non-recurring and recurring costs, and lots of gobbledygook, and they’ll say that comes to a number like $60-$70 million dollars. And, it’s complete baloney,’ said Wheeler.” (pogo.org)    The F-35 has the distinction of being the most ...
Original Post Date: Wednesday, September 25, 2013 Last November I hosted a webinar that discussed the use of the companion applications Live! This session helped to further explain how to use them in congruence with TP, the history, & why we created them, etc. During the presentation I showcased the success’s I have encountered with using them both in the recent AOA I described in part 2 and this blog part 3. You can find the recorded webinar on our site. In addition I described as I am going to do here the differences between the large project engine and the excel ...
Original Post Date: Wednesday, September 25, 2013 We all pull data and research from various sources when creating a project estimate.  You may pull together public CERS, internal research, subscription based data or commercial models.  In the end you want your entire estimate in one format.  If you use TruePlanning, you may have used the “Other Direct Cost Object” in the past to include costs estimated in another model.  You may have utilized the “Equation Cost Object” to include a CER with up to 5 variables, which would allow you to account for the size and complexity of an ...
Original Post Date: Tuesday, September 24, 201 Risk Analysis Methodology Overview – Method of Moments In this second of three articles on risk analysis, we will discuss Method of Moments.  Method of Moments (MoM) is an alternative to Monte Carlo simulation.  Along with the methodology, we will present some pros and cons of using MoM over Monte Carlo.  What is a moment? Before we discuss the methodology behind MoM, we first need to talk about moments.  Caution:  for all the master statisticians out there, this article is meant to boil down complex topics in an easy to understand manner.  There are obviously ...
Original Post Date: Thursday, November 29, 2012 With Customize View, TruePlanning™ offers great flexibility in editing favorites as row by column grids.  Typical examples are Object by Activity, Object by Resource and Activity by Resource.  But what if you wanted to view any of these grids also by year?  In other words, how can we add a third dimension?  Last October, in my “Work Breakdown Structures are Workable!” blog, we discussed the use of Excel’s Data-Sort and Data-Group options to build up a WBS, for a MIL-STD 881 style view of Activity by Object as a linear list.  Results were singular ...
Original Post Date: Thursday, November 1, 2012  Changing organization culture is often cited as necessary for surviving the grim financial realities we face today. Everywhere you look, no one seems to have enough money to buy what they need, but somehow, the need must be fulfilled. If we can just change organization culture, a smart new idea will emerge to save the day; maybe so. How, then, do we change the culture? Practically every B-school and business periodical has written on the subject. One thing they all agree is that achieving organization change is one of, if not the ...