Estimating Methodologies - Actual Cost

Definition

Using the actual cost from the current build/production of a system to estimate future cost of the same system.

When used

After low rate production is complete or full rate production has already started.

Method

• The system is broken down from the highest to lowest level elements. This is called Work Breakdown Structure (WBS) or Cost element Structure (CES).
• Use the actual cost at the lowest WBS level and build up. In some cases, the cost at a higher level of WBS is applied.