A Cost Function for Military Airframes

Recent theoretical and empirical work in the areas of learning curves, production rate and cost estimation of airframes has seemed to yield contradictory conclusions. A model of acquisition process that captures the interaction between learning and both endogenous and exogenous production rate changes is developed by modifying a previous model to include production experience and yearly production targets. This permits a production program to be modeled as a series of discrete tasks connected by experience. The impacts of an exogenous increase or decrease in deliveries, of stretching a lot out over a longer period of time, and of several restrictions on production can be modeled by this procedure. (Author)