PowerPoint Presentation - The Society of Cost Estimating and by ewghwehws


									     NASA Cost Integration Model
         A Systems Analysis Tool

National Conference & Education Workshop
               Manhattan Beach, CA
                 June 15 – 18, 2004

                         Presented by:
                      Wayne A. Johnson
         Science Applications International Corporation
                Space Technologies Operation
                      Huntsville, Alabama

                 What we are about to see…

• Why repetitive cost estimating/analysis tasks make good
  modeling candidates

• Life Cycle Cost Integration Model Description
   - Developed for NASA to conduct system level launcher trades
   - Spreads costs over time based on temporal and phasing inputs
   - Incorporates Visual Basic for Applications (VBA) controls

• Model Demonstration

• Questions ??
                                         Why Build a Model?
         If Your Thinking Is…                                           May I Suggest…

• We’ve been doing business the same way…           • New technologies/functions can likely do
                                                      it more efficiently

• I don’t have time to do it right the first time   • Do you have plenty of time to do it over until it is right?

                                                    • Visual Basic for Applications (VBA) only requires
• Visual Basic is hard to learn….intimidating…
                                                      inputs for a few key property fields; many format options

• Excel functions are complex                       • Perhaps some are, but…
                                                          • Most are simple to construct
                                                          • May be generated with detailed argument explanation
                                                          • Many functions can be embedded as arguments in
                                                            other functions
                                                          • Complex function can be built up (nested) from
                                                            simpler functions

                                       What are your hurdles ?
                                    Turning A Mountain Into a Mole Hill

                                                Formulate ideas….I want to….

Breakdown processes into units
                                                                           Select            Select Phasing Table            Multiply
                                                                          Phasing          Profile Year (Current Year       Phasing %
                                                                           Table                     minus                     By
                                                                           Profile          (Start Year + Duration))        Cost Input
                                                                         First Year

                                                                                Yes                            Yes
                                                                                                    Is Start
                                                                                                    Year >
                                                                                                    Curren                   Output
                                                   Is Start
                                    Is Start
                                                   Year +           No    Is Start    No             t Year
                                                                                                                             in Real     Real   Multiply
                                                   Duratio                Year =                                                or              Cost by
              Phasing     Start        >=                                                             Start
                                                      n>                  Curren                                             Consta             Inflation
               Profile    Year      Curren                                                          Year +
                                                   Curren                  t Year                                            nt Year             Factor
               Input      Input      t Year                                                         Duratio
                                                    t Year                                                                   Dollars
                                                                                                      n <=
                                                                                                     t Year

                                           No                 Yes                                                                   Constant
              Lookup                                                                                                         Multiply
                                                   Cost = 0
               Table                                                                                                         Cost by
                                                                                                                             One (1)

                                                                                                                        Build up function out of pieces

              Life Cycle Cost Integration Model

What Is It?            A spreadsheet tool to aid analysts
                       construct Life Cycle Cost (LCC)

Why is it needed?      To simplify the integration of cost
                       data to support an array of analyses
                       including independent cost estimates,
                       budget submissions, assess cost
                       realism, etc.

                  Already in employed in NASA Programs:
                             • Orbital Space Plane (OSP)
                                 - LCC Estimates
                                 - Budget Formulation Exercises
                                 - Sensitivity analyses
                             • Next Generation Launch Technology (NGLT)
                                 - LCC analysis
                                 - Sensitivity analyses
                                 - FASTPACT* Environment

* Framework  for Advanced Systems Trade-offs using
 Probabilistic Analysis of Concepts and Technologies

               Development                                    Operations
                  Costs                                         Costs
              • Design & Development                        • Variable
              • System Test Hardware                           - Ground
              • Production                                    - Flight
              • Facilities                                  • Fixed
              • System Integration                             - Ground
              • Spares                                         - Flight
              • DDT&E Surge Capability    Life Cycle Cost      - Program Support

  Technology                                                                   Disposal
     Costs                                                                      Costs
• Temporal Characteristics                                                 • 3 Year Cycle
                                                                           • Begins at end of
                                                                             Operations Phase

                                                                                   of Merit
           Life Cycle Cost Profiles


                   Figures of Merit

• Total Technology Cost
• Total DDT&E Cost
• Total Production Cost
• Total Operations Cost
• Total Acquisition Cost (DDT&E + Production costs)
• Peak Acquisition Cost (and year of occurrence)
• Peak Life Cycle Cost (and year of occurrence)
• Total Life Cycle Cost
                   LCC Engine Features

• Phasing Algorithms (up to 10 yrs.)
• Cost Skewing functions (beta curves)
• Switch Between Constant and Real Year Dollar Output
• Conditional Cell Coloring/Cell Shading
• VBA Objects to Facilitate Sensitivity Analysis
• Reusable and Expendable Component Production Units
• Annual Launch Rate Input (steady state with 4 yr. ramp up)
• Production Learning Curve
• Toggle switches to turn on/off selected elements
• Automatic Calculations for Spares and Surge Categories
                                   Screen Display

         Global Factors                  Active Elements              Metrics/Outputs


                      VBA Objects                    Cost Skewing             Time Phasing
                  (Increment Spinners)             (Pull Down Menu)           Calculations
               Future Improvements

• Integration of “traffic models”
    - Process driven (i.e., TAT) operations modeling

• Addition of uncertainty bounds to cost estimates
   - @Risk distributions

• Innovative spreadsheet tool for consolidating system or
  architecture Life Cycle Cost elements

• Phasing algorithms eliminate “Cut and Paste” approach

• VBA functions facilitate sensitivity analyses

• Modular design promotes flexibility

• Serves as a foundation for conducting economic analyses
                  Why Build a Model?

New Paradigm…

     My repetitive nature tasks can be modeled/automated…
     I don’t have the time to do it wrong again…
     Visual Basic for Applications is easy…
     I can break down complex functions into workable pieces…

                What can I model next ?

Modeling Lets You “Break Out” Of The Mold

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