ABSTRACT
Reliable Life Cycle Cost (LCC) estimates result from a comprehensive approach to the acquisition programme they are prepared for, including the acquisition strategy, technical definition, characteristics, system design features and technologies relevant to system design. LCC estimation requires that technical baselines should be prepared for each alternative of system life cycle implementation; as the programme develops, the number of alternatives and, therefore, of technical baselines decreases. LCC estimation process consists of a series of tasks that are mainly directed to the definition of system economic aspects, on the basis of the level of system complexity, of the time when the estimation takes place and of the kind of cost data available for the estimation. Parametric methodologies use algorithms called Cost Estimating Relationships (CERs) to estimate cost by applying statistical techniques mostly relying on historical data. This methodology consists of a progressive aggregation of known or estimated cost elements that are located at a certain level of system breakdown.
