Objectives
- Ability
to explain data sources and their affects on LCC models
- Outline
Defence policy and procedures on LCC
Life Cycle Costing (LCC) Analysis comprises
estimation and analysis techniques applied to the financial
management of a capability.
It provides for the structured collection,
analysis and presentation of LCC data, to assist in decision making
for mission system capabilities.
Examine and understand The Iceberg effect.
Examine Cost Breakdown Structure
- Contains
all costs that can be attributed to the ‘Cost of
Ownership’ of a capability.
- Defined
by the model’s rules.
Life Cycle Cost Models and Data
Sources are examined in line with the following
factors:
- The
maturity of the requirements, including operating and support
concepts.
- The
maturity and complexity of the mission system and support
equipments being acquired.
- The
ability of external data systems to collect and provide accurate
LCC data.
Examine Risk and Uncertainty
- Risk and
Uncertainty relates to a modeller's confidence in the data
model.
- Is the
data accurate and/or volatile within the Cost Breakdown
Structure?
- This can
be quantified through Sensitivity Analysis.
Sensitivity Analysis
-
Identifies costing parameters that have a significant effect on
modelling outputs.
- What are
the cost drivers?
- Allows
the modeller to test the outcome of changing costs.
