Cost risk analysis and learning curve in the military shipbuilding sector

Authors:
  • ASAbderrahmane Sokri
    Abderrahmane Sokri
  • AGAhmed Ghanmi
    Ahmed Ghanmi
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Abstract
The learning curve shows how unit costs can be expected to fall over time. It has been demonstrated that learning is a major cost risk driver in defence acquisition projects. It can be affected by changes in processes, resource availability, and worker interest. This paper examines the risk that military ship builders may not realise expected production efficiencies. A probabilistic risk approach is used to portray the learning curve risk and estimate the corresponding cost contingency. A case study using a military shipbuilding project is presented and discussed to illustrate the methodology.