Cost As an Independent Variable

Report Number: NPS-AM-05-005

Series: Acquisition Management

Category: Cost as Independent Variable (CAIV)

Report Series: Working Paper

Authors: Michael Boudreau

Title: Cost As an Independent Variable

Published: 2005-06-01

Sponsored By: Acquisition Research Program

Status: Published--Unlimited Distribution

Research Type: NPS Faculty

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Keywords: Acquisition Logistics: Cost as an Independent Variable, CAIV; Joint Capabilities Integration and Development System, JCIDS; Lifecycle Cost, LCC; Performance-Based Logistics, PBL; Reduction in Total O


Reduction in Total Ownership Costs (R-TOC) is the current initiative to manage costs over the entire life of a weapon system. Cost as an Independent Variable (CAIV) is the front-end focus of R-TOC. CAIV is the collection of practices, process, and tools by which system developers and other stakeholders control Lifecycle Costs (LCC). CAIV includes setting affordability goals, technical versus cost tradeoffs, cost and performance architectures that include production and sustainment costs, and a range of specific practices. Recent research into R-TOC
suggests that CAIV efforts may not be taking full advantage of new JROC/JCIDS processes nor engendering full leadership support to reduce O&S costs. The Program
Manager (PM) is responsible for developing and managing a TOC plan