# PowerPoint Presentation - The Society of Cost Estimating and by ewghwehws

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```									     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
wayne.a.johnson@saic.com
Overview

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

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
Cost
Input

Yes                            Yes
Is Start
Year >
Curren                   Output
Is Start
Is Start
Year
Year +           No    Is Start    No             t Year
and
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 <=
Curren
t Year

No                 Yes                                                                   Constant
Phasing
Duration
Input
No
Profile
Lookup                                                                                                         Multiply
Cost = 0
Table                                                                                                         Cost by
One (1)

Build up function out of pieces
Background

Life Cycle Cost Integration Model

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

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.
Applications

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

Probabilistic Analysis of Concepts and Technologies
Framework

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
Estimate
Engine

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

Figures
of Merit
Life Cycle Cost Profiles

Constant
Year

Real
Year
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
• 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

On/Off
Toggle

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

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

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

• 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?

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 ?
Summary

Modeling Lets You “Break Out” Of The Mold

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