The development and application of warship cost estimating methods

Accurate cost estimating methods are critical to the success of the shipbuilding industry. However, a review of the published literature reveals that the subject has been largely neglected and existing methods have a number of limitations. In particular, preliminary estimating methods to support ship design optimisation during the earliest phases of the design process are not well developed. In addition, labour estimating methods employed when tendering are often based on intuitive methods with only subjective use made of recorded manhours data. To address these limitations a number of parametric labour estimating models were developed. Two databases of shipbuilding production manhours were compiled, the first containing manhours by trade group data, the second manhours according to a functional ship system breakdown. A third database containing details of the technical characteristics and build circumstances of each ship was also compiled. For each of the two production manhours breakdowns, three types of parametric estimating models were developed, including analogy-type Cost Estimating Relationships (CERs), and those developed using simple linear and multiple linear regression analysis. These three models were then applied and compared, enabling the advantages, limitations and most appropriate applications of each to be identified. A particular feature of this work was the development of multiple linear regression CERs based on a number of cost driver parameters. These cost drivers include both design and build parameters and result in a CER which is more sensitive to warships' design characteristics than previously developed CERs. It was found that the inclusion of up to five parameters in the system-based CERs were able to explain virtually all the variation in the source data. Of particular interest was the finding that'outfit density' was a significant parameter affecting a high proportion of the outfitting manhours. To demonstrate the potential of this type of CER when applied to warship design optimisation, a study was carried out to investigate the relationship between the size and cost of a warship. The limitations of existing cost estimating methods have prevented the solution of this long standing debate. Four stretched corvette designs were developed by adding volume to a basis ship. Estimates of production manhours indicate that whilst structural and services manhours are higher for the larger ships, these are outweighed by a reduction in outfitting manhours in the more spacious vessels. When the labour costs are added to the marginally increased material costs, the result is a small reduction in Unit Production Costs of the stretched ships.