This research has examined the cost estimating and cost modeling research literature and identified the benefits and limitations of existing practices. Particular emphasis has been placed on the methods available for developing cost models at the early stages of product and process development where data from which to develop models is scarce. Shortfalls in existing practices have been identified as well as potential methods of resolving these limitations. Of these methods Virtual Manufacturing appears to offer the greatest potential for resolving issues with lack of data availability by enabling such data to be generated. Detailed trials have, therefore, been undertaken to examine the effectiveness of Virtual Manufacturing in terms of its ability to generate valid data in the quantities required to ensure accurate cost models can be developed. In addition, the research has involved the use of Data Mining techniques to identify the cost estimating relationship's within the data output from the Virtual Manufacturing trials. Here the aim has been to investigate the potential use of Data Mining techniques to fully automate the data analysis stage of the cost model development process.