Module 2: Cost And Economic Analysis

Question 1

The Defense Acquisition System is the management process that guides DoD acquisition programs and is basically the process by which programmatic risk is managed. What are the three programmatic risks that must be successfully managed?

Answer 1

Cost, Schedule, and Performance Risks

Question 2

2. What are the appropriations that may be caused to fund an acquisition program?

Answer 2

RDT&E, Procurement, O&M, MILCON, and MILPERS

Question 3

3. What is the term used to describe dollars shown in the life cycle cost estimate wherein the effects of inflations are not considered?

Answer 3

Base year dollars or Constant year dollars

Question 4

4. What is the term used to describe dollars used for programming and budgeting purposes wherein the effects of inflation are considered?

Answer 4

Then-year dollars or current year dollars

Question 5

5. What cost structure does MIL-STD-881C represent?

Answer 5

Work Breakdown Structure (WBS)

Question 6

6. Which cost estimating method is based on direct comparison with historical information of one similar system?

Answer 6

Analogy Method

Question 7

7. Which cost estimating method is known as a statistical method or top-down method?

Answer 7

Parametric Approach

Question 8

8. Which cost estimating method requires extensive knowledge of the product or process?

Answer 8

Engineering Approach

Question 9

9. What are the methods/steps in conducting the Delphi Technique?

Answer 9

Query Expert Opinions
Seek supporting rational or information from each expert
Summarize results
Gather second opinion
Continue iteration until consensus or near-consensus is reached

Question 10

10. What is the theory that as the quantity of output doubles, the man-hours required to produce the quantity decreases at a fixed rate?

Answer 10

Learning Curve Theory

Question 11

11. What is the name of the integrated management tool intended to relate contractor actual performance n a contract to the contractor’s planned cost and schedule that measures the work progress in objective terms and that states the value of the work completed in dollars?

Answer 11

Earned Value Management System (EVMS)

Question 12

12. What is the EVM-related term when there is a difference between budgeted cost of work performed (BCWP) and the actual cost of work performed (ACWP) on a cost reimbursable contract?

Answer 12

Cost Variance

Question 13

13. What is a systematic approach to the problem of choosing the best method of allocating scarce resources to achieve a given objective?

Answer 13

Economic Analysis

Question 14

14. Cost Savings, Cost Avoidance, and Productivity Improvements are examples of what type cost benefits?

Answer 14

Quantifiable Benefits

Question 15

15. In regards to measures of central tendency, what is a mean? A mode? A median?

Answer 15

Mean is the arithmetic average
Mode is the most frequent score in a distribution of scores
Median is the middle of arrayed values

Question 16

16. What does correlation measure?

Answer 16

Degree of relationship between two or more variables

Question 17

17. For a perfect correlation to exist, what would be the coefficient?

Answer 17

1.0

Question 18

18. When evaluating a proposed investment or project with costs and benefits occurring not only in the current year but also future years, it is necessary to “bring back to today’s dollars” all those costs and benefits. What is this process determining?

Answer 18

Net Present Value of the proposed investment or project