Research On Cost Estimate And Cost Risk For Aero Fuel Pump Development Project

Recently, the rapidly developing civil aviation industry makes intensive competition in the market of civil aircraft and its components. Each aero product manufacturers invest more and more in product development in order to enhance their product competition so as to gain more profits. However, many development projects are over budget upon its completion mainly because the cost estimate at the early of project is inaccurate or too optimistic. It makes those projects difficult to gain profit even become loss. Moreover, it forces manufacturer to increase excessive investment and carry huge operating burden. Therefore, it is significant for manufacturer to improve the capability of cost estimate especially for the aero product development projects.This paper is to advance the project cost estimate process and methodology by considering risks. The study is based on a real project for main fuel pump development. There are two main courses to complete the project cost estimate. The preliminary cost estimate is done by defining voice of customer and project work scope, analyzing project development process, planning project resources and using 3-point estimate and Monte Carlo simulation. Then, the accurate cost estimate is determined by conducting qualitative and quantitative risk assessment in order to allocate risk reserves. It is expected to work out a best practice on project cost estimate thru this study and to be used as reference to other similar development projects.