We all know the theory of calculating Total Acquisition Costs but anyone in the real world also knows that when you get down to practice predicting future costs is a bit harder than the theory. The latest saga in the fighter jet and aircraft carrier saga provides a good case study. Rather than the preferred option being 25% lower, MOD are now faced with the cost of justifying an increased upfront cost of £1.8bn, as opposed to the previously predicted £400m. That's quite a difference and I'm sure many of you ask, 'How could your calculations be so far out?' Getting the predicted figures wrong is understandable but making the wrong choice somewhat harder to justify.
If you were asked to calculate TAC for a fighter jet you may well have done a comparison of the alternatives and really looked at running costs, maintenance costs, etc., but would you have included the additional costs of
