Accession Number : ADA115963

Title :   Production Risk Assessing Methodology (PRAM).

Descriptive Note : Final rept. Apr 81-May 82,

Corporate Author : ARMY PROCUREMENT RESEARCH OFFICE FORT LEE VA

Personal Author(s) : Norton,Monte G ; Abeyta,Richard D ; Grover,Paul E

PDF Url : ADA115963

Report Date : May 1982

Pagination or Media Count : 74

Abstract : By analyzing Army SAR systems during the transition from R&D to production, it was determined that a 35% average cost growth was occuring in the Procurement appropriation (excluding inflation and quantity changes) which amounts to over $5 billion. It was also determined that as in R&D, risks are inherent in all systems during early production and often lead to large production cost increases. The various techniques used to address risk and uncertainty, including those used in the Army's TRACE program, were reviewed. Although these same techniques can be used to address initial production risks, the Production Risk Assessing Methodology (PRAM) offers an improvement. It combines an empirically developed risk structure with conventional cost estimating techniques to quantify initial production risks into a dollar estimate which complements the Baseline Cost Estimate. Using the PRAM production risk and cost growth can be reduced. (Note: PRAM, with some modifications, has been incorporated into a DARCOM approved methodology titled Total Risk Assessment Cost Estimating for Production (TRACE/P)). (Author)

Descriptors :   *Army procurement, *Army research, *Production, Risk, Costs, Cost analysis, Taxonomy, Formats

Subject Categories : Logistics, Military Facilities and Supplies

Distribution Statement : APPROVED FOR PUBLIC RELEASE