Identifying and removing error in hierarchical cost estimates

The ability to estimate the manufacturing cost of a product proves to be critical through all phases of the development cycle. When developing an estimate, the two components of the process, the equations which estimate the cost and the data supplied to those equations may both contribute error to the estimate. The error associated with input data can be identified through risk analysis. Error in the equations can be identified through calibration with historical data. This paper presents a methodology for applying these two error identification techniques in a hierarchical cost estimation tool.