ABSTRACT
Cost as an independent variable (CAIV) is a formal methodology for reducing TOC while maintaining performance and schedule objectives. It involves developing, setting, and refining cost objectives in a systematic method while meeting owner/user requirements. CAIV entails setting aggressive, realistic cost objectives for acquiring systems and managing program risks to obtain those objectives. Cost objectives must balance against market and budget realities with projected out-year resources, taking into account existing technologies as well as the high-confidence matriculation of new technologies (Kaye et al., 2000). In essence, the CAIV concept means that, once the system performance and objective costs are decided (on the basis of cost/performance tradeoffs), then the acquisition process will make cost more of a constraint, and less of a variable, while obtaining the needed capability of the system. Figure 9.1 shows this graphically.
