This pricing problem has been designed to permit application of a wide-range of price/cost analysis techniques. These include use of such tools as:

Leaming curves

Trend anaylsis, including index numbers

Overhead analysis

Profit analysis

Judgment

Required:

Your job is to develop a prenegotiation position for all cost elements with explanations. Available information includes program information, a cost proposal, DC4S and DCM reports, and an ASD Cost Research Report

Table of Contents

Program lnformation........................................................................................................... 2

Cost Proposal...................................................................................................................... 6

DCAS and DCA.tt Reports.............................................................................................. 20-27

Cost Research Report.......................................................................................................... 35

Program History

l. In .July 19X5 a requirement for a very small, very reliable, light weight radio :receiver transmitter/receiver fer use in a new aircraft, the A-8 became known. The aircraft was, a-t this time, in prototype production and units of the new receiver transmitter were necessary prior to flight test scheduled for July l9X7.

2. Due to the lack of acquisition Leadtime it was necessary to select on a single source basis, a contractor with tile necessary technical background to provide the equipment. Radiotronics, Inc was, after careful analysis, chosen to develop and produce the RT\ARC:. 1984 receiver transmitter unit.

3. The RT/ARC 1984 has proven to .be extremely effective and reliable and has been repurchased four times from Radiotronics to meet the needs of the Air Force.

LOT contract type Target Price Actual Price

l CPIF $l,450,000 $1500,000

2 CPIF $3,000,000 $2,650,000

3 CPIF $3,250,000 $3,270,000

4 CPIF $4,700,000 $4,720,000

5 CPIF $3,900,000 Unknown

6 (Proposed) CPIF $5,233,404