Refer to the cost projection in Figure 19.6. Although the overall estimate looks
ID: 419745 • Letter: R
Question
Refer to the cost projection in Figure 19.6. Although the overall estimate looks favorable • in terms of the projected life-cycle cost, the results from Program Review 3 are not favorable. What would you do (if anything) to ensure that the ultimate projection is a realistic one and is being maintained?
Program Reviews $700 500 LCC estimaie a 574.1 Program review 3 cost rep 6D 510 40 Tinget $ Estimited $ % 534 23,10 33052 242 771,1 +1.3 Prxlaction Opcralioa& suppot 20 Total LC 657 200 534,1 12.7 I0 Program time (ycars) Figure 19.6 Life-cycle cost projection at a major revicw point.Explanation / Answer
Answer:
By referring to the cost projection in Figure 19.6., although the overall estimate looks favorable in terms of the projected life-cycle cost, the results from Program Review 3 are not favorable. We would take below actions to ensure that the ultimate projection is a realistic one and is being maintained as
Estimation matches with targets: We would like to have detail review for the estimates so that we can make the estimates as real as possible and avoid the major future surprises in the estimates. Thus improvement in estimates with respect to the targets will be the first step to remove the gap identified in third project review.
Increase the target for research and development : In order to matvh the estimates and target, we would like to increase the target for research and development as the estimates for this category is high and it will not be able to execute within the given targets.
Total LLC estimate needs to be close to targets within 2 %: We need to match targets and estimates in such a way that the differences between them are very low and it should not be more than 2%.
These actions will help in reducing the gap and makes the real estimates against the targets.