Abstract : There are three basic methods used for cost estimation--the industrial engineering, analogy, and statistical approaches. The statistical method is considered the most useful for government cost analysts, whether the purpose is long-range planning or contract negotiation. An estimating procedure must rely on a data base that includes cost, physical and performance descriptions, and a development and production history of previous equipment programs. Experience has proved the value of the learning-curve concept. Its basis is that each time the total quantity of items produced doubles, the cost per item is reduced to a constant percentage of its previous cost. A thorough knowledge of the learning-curve phenomenon is indispensable to persons involved in cost analysis. (Author)