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CH9 Pricing and Estimating - Coggle Diagram
CH9 Pricing and Estimating
type of global pricing strategies
Type I acquisition - one-of-a-kind program with little or no follow-on potential
2) Type II acquisition – the new program with potential for large followon business or representing a desired penetration into new markets
types of estimates
Order-of-magnitude analysis
Approximate estimate (or top-down estimate)
Definitive estimate, or grassroots buildup estimate
Learning curves
overhead rates
Actual costs to date and estimates to completion
Proposal data
Marketing intelligence
Management goals
Past performance and trends
steps to determine project price
Step 1: Provide a complete definition of the work requirements.
Step 2: Establish a logic network with checkpoints.
Step 3: Develop the work breakdown structure.
Step 4: Price out the work breakdown structure.
Step 5: Review WBS costs with each functional manager.
Step 6: Decide on the basic course of action.
Step 7: Establish reasonable costs for each WBS element.
Step 8: Review the base case costs with upper-level management
Step 9: Negotiate with functional managers for qualified personnel.
Step 10: Develop the linear responsibility chart.
Step 11: Develop the final detailed and PERT/CPM schedules.
Step 12: Establish pricing cost summary reports.
Step 13: Document the result in a program plan.
types of pricing reports
A detailed cost breakdown for each WBS element.
A total program manpower curve for each department
A monthly equivalent manpower cost summary
A yearly cost distribution table.
A raw material and expenditure forecast.
A functional cost and hour summary.
A monthly labor hour and dollar expenditure forecast
Total program termination liability per month.
(LCC) Life cycle circle
R&D costs
Construction cost
Production cost
Operation and maintenance cost
Product retirement and phase-out cost (also called disposal cost)