**Vision Spaceport Synergy Team**

**Spaceport Cost Model Research Report**

December, 1999

![](media/image1.png){width="4.2027777777777775in"
height="0.9972222222222222in"}

Table of Contents

1 Introduction [1](#introduction)

1.1 Definition of the Problem [1](#definition-of-the-problem)

1.2 Approach [1](#approach)

2 Data Collection Phase [2](#data-collection-phase)

2.1 Space Related Cost Models [2](#space-related-cost-models)

2.1.1 NASA Cost Models [2](#nasa-cost-models)

Table I, NASA JSC Cost Models [2](#table-i-nasa-jsc-cost-models)

2.1.2 Airforce Cost Models [3](#airforce-cost-models)

2.1.3 Army Cost Models [4](#army-cost-models)

2.1.4 Navy Cost Models [5](#navy-cost-models)

2.1.5 DOD Cost Models [5](#dod-cost-models)

2.1.6 Aerospace Corporation Cost Models
[6](#aerospace-corporation-cost-models)

2.1.7 The MITRE Corporation Cost Directorate
[6](#the-mitre-corporation-cost-directorate)

2.1.7.1 Telecon with MITRE's Economic and Decision Analysis Technical
Center (EDAC)
[6](#telecon-with-mitres-economic-and-decision-analysis-technical-center-edac)

2.2 Information on Cost Modeling and Related COTS Tools
[8](#information-on-cost-modeling-and-related-cots-tools)

2.2.1 Parametric Cost Modeling Links
[8](#parametric-cost-modeling-links)

Table VIII, Parametric Costing Links
[8](#table-viii-parametric-costing-links)

2.2.2 Activity Based Costing Links [9](#activity-based-costing-links)

2.2.3 Analogy-Based Costing Links [12](#analogy-based-costing-links)

2.2.4 Unique Cost Modeling Links [13](#unique-cost-modeling-links)

2.2.5 COTS Cost Tools [14](#cots-cost-tools)

2.3 Process Modeling and Related COTS Tools
[15](#process-modeling-and-related-cots-tools)

2.4 Quality Function Deployment [16](#quality-function-deployment)

2.5 Risk Assessment and Mitigation [17](#risk-assessment-and-mitigation)

2.6 TRANSCOST Model [18](#transcost-model)

2.6 Air Transport Association (ATA) System Code Approach
[20](#air-transport-association-ata-system-code-approach)

3 Conclusions and Recommendations [21](#conclusions-and-recommendations)

Acknowledgements: [25](#acknowledgements)

Bibliography [26](#bibliography)

*Abstract*

Vision Spaceport is a Joint Sponsored Research Agreement between NASA,
industry and academia. Project members require insight into prospective
space transportation system projects in order to advance the development
of more affordable, safe and routine access to space. This insight
should be quantifiable including such factors as costs and productivity,
or flight rate capabilities. The operational phase of proposed systems
is of particular emphasis. Cost information for prospective space
projects is used to determine feasibility, evaluate alternatives,
procure funding, and perform financial planning. The Vision Spaceport
Synergy Team is developing a cost model to meet this need. This paper
explores what form this model should take and presents the results of a
literature search.

#   {#section .unnumbered}

#  {#section-1 .unnumbered}

# 1 Introduction

This paper explores the problem of space project cost modeling, presents
relevant information obtained by research, and provides recommendations
for future development. Of particular emphasis is the area of space
transportation systems operations, the recurring processes of space
systems required for access to space.

## 1.1 Definition of the Problem

VSP customers need cost information for prospective space projects for
the following reasons:

a)  To provide insight into directions for investment, public or
    private, such as in technology

b)  To determine whether a concept is financially feasible

c)  To evaluate alternative concepts

d)  To procure funding

e)  To perform financial and schedule planning

f)  To advance improvement toward achieving more routine, reliable and
    safe access to space

Consequently, the VSP Synergy Team is developing a spaceport concept
model to meet this need \[1\] \[2\]. As described in the Cost Model
Definition Document \[2\], the model endeavors to estimate the cost of
projects at the conceptual level as well as for projects at a more
defined level. Clearly, the degree of confidence should be proportional
to the exactitude of problem knowledge. In any case, any model must
yield a quantitative measure of its accuracy/confidence, otherwise it
will amount to little more than conjecture. Of course, early model
attempts may suffice to provide semi-quantitative estimates, with more
accurate models to follow.

The above-defined problem is a specific instance of a more general one:

> 'How does one estimate something when the measurements and algorithms
> are imprecise, subjective, and conjectural?'

This classic problem recurs in diverse areas of science, engineering,
and apparently finance. The degree of success will depend on just how
imprecise, subjective, and conjectural the inputs are as well as the
ability of the model to reflect reality.

## 1.2 Approach

The author is not a cost analyst and does not claim any expertise in the
area. His background is Physics, and Electrical- and Systems
Engineering. Consequently, he routinely applies scientific methods to
engineering problems. After defining the problem, the author researched
the problem by conducting a web-based search for all information
relating to cost modeling, space launch-, operations-, and mission cost
models, activity-based costing, parametric cost estimation, and process
modeling. Advice and information was also solicited from Vision
Spaceport Synergy Team members. The effort ends with the third step in
the scientific method -- forming a theory or hypothesis. In this
context, the author interprets the results of the data collection phase
and recommends what should be done next and refers the team to experts
in the field.

# 2 Data Collection Phase

A wealth of information was found relating to space-related cost models,
various cost modeling techniques, and to process modeling in general.

## 2.1 Space Related Cost Models

NASA and every branch of the military have developed cost models for
space-related projects in all phases of a projects evolution. These
phases include vehicle development, launch operations, payload
development, mission operations, and long-term maintenance.

## 2.1.1 NASA Cost Models

NASA JSC maintains a very large collection of parametric cost models as
summarized below:

#### Table I, NASA JSC Cost Models

  ---------------------------------------------------- -----------------------------------
                                                       

  <http://www.jsc.nasa.gov/bu2/>                       Main Cost Modeling Page

                                                       

  <http://www.jsc.nasa.gov/bu2/MOCM.html>              Mission Operation Cost Model

                                                       

  <http://www.jsc.nasa.gov/bu2/AMCM.html>              Advanced Missions Cost Model

                                                       

  <http://www.jsc.nasa.gov/bu2/ATECM.html>             Aircraft Turbine Cost Model

                                                       

  <http://www.jsc.nasa.gov/bu2/airframe.html>          Airframe Cost Model

                                                       

  <http://www.jsc.nasa.gov/bu2/CECM.html>              DSN Missions Cost Analysis

                                                       

  <http://www.jsc.nasa.gov/bu2/ELV_INTL.html>          International ELV Cost Analysis

                                                       

  <http://www.jsc.nasa.gov/bu2/ELV_US.html>            U.S ELV Cost Analysis

                                                       

  <http://www.jsc.nasa.gov/bu2/inflate.html>           Inflation Calculator

                                                       

  <http://www.jsc.nasa.gov/bu2/learn.html>             Learning Curve Calculator

                                                       

  <http://www.jsc.nasa.gov/bu2/NAFCOM.html>            NASA/Air Force Cost Model

                                                       

  <http://www.jsc.nasa.gov/bu2/SOCM/SOCM.html>         Space Operations Cost Model

                                                       

  <http://www.jsc.nasa.gov/bu2/SVLCM.html>             Estimates Development and
                                                       Production of Spacecraft

  <http://www.jsc.nasa.gov/bu2/guidelines.html>        NASA JSC Costing Guidelines

                                                       

  <http://www.jsc.nasa.gov/bu2/CERproc.html>           CER Based Costing Package
                                                       Parametric

                                                       

  <http://www.jsc.nasa.gov/bu2/links.html#Companies>   HUGE LIST of Cost Modeling LINKS
  ---------------------------------------------------- -----------------------------------

**Table II, NASA GSFC, LRC, and ARC Cost Modeling**

  -------------------------------------------------------------------- -----------------------------------
                                                                       

  <http://www.ksc.nasa.gov/shuttle/nexgen>                             Shuttle Next Generation Web Site

                                                                       

  <http://www.ksc.nasa.gov/shuttle/nexgen/AATePaperDraft.htm>          Original Vision Spaceport Cost
                                                                       Model Technical Paper

                                                                       

  <http://joy.gsfc.nasa.gov/MSEE/cogs.htm>                             NASA **Operations Cost Estimation
                                                                       Tools GSFC**

                                                                       

  <http://joy.gsfc.nasa.gov/MSEE/msnwork.htm>                          NASA GSFC Mission Operations and
                                                                       Data Processing Workload Model

                                                                       

  <http://www.ksc.nasa.gov/shuttle/nexgen/OpsStuff>                    Tools Trade Study by Uwohali, Inc.

                                                                       

  <http://se-sun2.larc.nasa.gov/stae/tool_survey/tools/tol-075a.htm>   NASA Langley **Requirements-Based
                                                                       Operations Cost Model get from
                                                                       JPL**

                                                                       

  <http://se-sun2.larc.nasa.gov/stae/tool_survey_a/lst-001a.htm>       NASA Langley List of Tools

                                                                       

  <http://ic-www.arc.nasa.gov/ic/projects/saic/pbcm.html>              NASA Ames **Process-Based Cost
                                                                       Model Info**

                                                                       

  <http://ic-www.arc.nasa.gov/ic/projects/saic/scea.html>              NASA Ames PBCM White Paper

                                                                       

  <http://ic-www.arc.nasa.gov/ic/projects/saic/homepage.html>          Links to SAIC, the company that
                                                                       developed many of NASA's Cost
                                                                       Models
  -------------------------------------------------------------------- -----------------------------------

## 

## 2.1.2 Airforce Cost Models

The Air Force Cost Directorate maintains a large compendium of costing
information and models:

**Table II, Air Force Cost Models**

  ------------------------------------------- -----------------------------------
                                              

  <http://www.laafb.af.mil/SMC/FM/COST.HTM>   Air Force Cost Directorate

                                              

  <http://www.saffm.hq.af.mil/>               AF Activity Based Costing Links
  ------------------------------------------- -----------------------------------

## 2.1.3 Army Cost Models

The Army maintains a large cost estimation site and provides the
following:

**Table III, Army Cost Models**

  ------------------------------------------------------------------ -----------------------------------
                                                                     

  <http://www.ceac.army.mil/>                                        Army Cost Directorate

                                                                     

  <http://www.ceac.army.mil/>                                        Automated Cost Estimating Tool
                                                                     ACE-IT

                                                                     

  <http://web.deskbook.osd.mil/valhtml/1/12/122/1222/12224S01.HTM>   Aircraft Sustainability Model

                                                                     

  <http://web.deskbook.osd.mil/valhtml/2/2E/2ES03.HTM>               Cost Management SW for Titan LV

                                                                     

  <http://www.ceac.army.mil/>                                        Army's List of Cost Links

                                                                     

  <http://www.anu.edu.au/mba/faculty/mlm/mlmprod.html>               **Huge Center for Cost Modeling,
                                                                     Large list of Link**s

                                                                     

  <http://www.logsupport.com/www7.html>                              **HUGE ONLINE COST TOOL
                                                                     Catalog/Links**

                                                                     

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S11.HTM>          **Very Interesting Life-Cycle Cost
                                                                     Estimation System**

                                                                     

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S08.HTM>          **Cost-Risk Evaluator**

                                                                     

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S09.HTM>          **Correlation Calculator for
                                                                     Cost-Risk Analysis**

                                                                     

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S10.HTM>          Parametric Cost Estimating

                                                                     

  <http://web.deskbook.osd.mil/valhtml/2/25/252/252S03.HTM>          Schedule Cost-Risk Analysis Module,
  ------------------------------------------------------------------ -----------------------------------

## 2.1.4 Navy Cost Models

The Navy also maintains a Cost Directorate and includes the following
models and cost links:

**Table IV, Navy Cost Models**

  --------------------------------------------------- -----------------------------------
                                                      

  <http://www.navair.navy.mil/air40/air42/>           NAVAL AIR Cost Department

                                                      

  <http://www.ncca.navy.mil/links.htm>                **HUGE LIST of Cost Links from
                                                      NAVY**

                                                      

  <http://www.ncca.navy.mil/products.htm>             

                                                      

  <http://www.ncca.navy.mil/research/98ABC_sel.htm>   Activity Based Costing Analytical
                                                      Reports

                                                      

  <http://www.ncca.navy.mil/research/98O&S_sel.htm>   Large Compendium of Military
                                                      Operational and Support Phase Cost
                                                      Models

                                                      

  <http://www.ncca.navy.mil/research/98ACQ_sel.htm>   Acquisition Cost Model Projects

                                                      
  --------------------------------------------------- -----------------------------------

## 2.1.5 DOD Cost Models

The Department of Defense Maintains a Cost Site with the following:

**Table V, DOD Cost Models**

  --------------------------------------------------- -----------------------------------
                                                      

  <http://www.dtic.mil/c3i/dodim/costool.html>        **Huge List of Cost Estimation
                                                      Tools \*\*\*\*\***

                                                      

  <http://www.dtic.mil/c3i/dodim/costweb.html#Help>   **DOD Cost Estimation Links**

                                                      
  --------------------------------------------------- -----------------------------------

##  

## 2.1.6 Aerospace Corporation Cost Models

The Aerospace Corporation, a federally funded FFRDC, specializes in the
space field and provides the following:

**Table VI, Aerospace Corporation Cost Models**

  -------------------------------------- -----------------------------------
                                         

  <http://www.aero.org/software/sscm/>   Small Satellite Cost Model

                                         
  -------------------------------------- -----------------------------------

## 2.1.7 The MITRE Corporation Cost Directorate

The MITRE Corporation, also an FFRDC, has an entire division, the EDAC,
devoted to supporting and guiding federal agencies such as NASA and
military cost efforts. They may be found at
<http://www.mitre.org/resources/centers/edac.html> . They are currently
doing work for NASA under a contract with NOAA.

> "The Economic Decision and Analysis Center (EDAC) supports MITRE
> sponsors by performing cost analyses to estimate resources required to
> develop, procure, field, operate, and dispose of command, control,
> communications, intelligence, information, and space systems. The
> EDAC\'s capabilities in resource estimation cover both hardware and
> software cost, schedule, and staffing. Estimates are prepared by
> skilled analysts employing various techniques, including parametric,
> analogy, and activity based costing, as well as engineering
> techniques. Many cost models are available within the Center. By
> working closely with sponsors and technical teams, EDAC helps provide
> an understanding of cost drivers and tradeoff issues at critical
> program decision points. Typical Center products include system and
> program cost and schedule estimates, economic analyses, Analysis of
> Alternatives (AOAs), cost/benefit analyses, and functional economic
> analyses."

Assessments of cost and schedule risk associated with the estimates and
analyses accompany all the Center\'s products.

#### 2.1.7.1 Telecon with MITRE's Economic and Decision Analysis Technical Center (EDAC)

On November 10, 1999 Vision Spaceport Synergy Team members held a
telecon with Ms. Diane Buell Principal Space Systems Engineer, and her
MITRE colleagues \[5\]. Attending were Edgar Zapata, Russell Rhodes,
Mike Sklar and myself. The meeting confirmed MITRE\'s interest and
expertise in both Space Systems costing as well as Large Systems Costing
and costing theory. After forwarding the JSA documentation to MITRE, Ms.
Buell sent us an email stating that she and her colleagues are looking
into possible VSP collaboration and that Mr. Jim Bui has talked to a
NASA/Marshall engineer interested in helping us with model validation.
Mr. Bui went on to say that Ms. Arlene Moore of NASA/Langley is heading
up a NASA-wide IPT dealing with launch and mission costing and that
Langley may have the resources to bring to bear, and may conceivably be
in a position to utilize MITRE also.

***2.1.8 Commercially Available Space-Related Cost Models***

A number of private companies also provide space-related cost models and
tools as summarized below:

**Table VII, Commercially Available Cost Models**

  --------------------------------------------------- -----------------------------------
                                                      

  <http://www.silcom.com/~technomi/cost_models.htm>   **SPACE, Aircraft, Communication,
                                                      Sensor Costing from TECHNOMICS,
                                                      Inc.**

                                                      

  <http://www.tecolote.com/products/models.htm>       **SPACE related costing from
                                                      Telocote, Inc.**
  --------------------------------------------------- -----------------------------------

## 2.2 Information on Cost Modeling and Related COTS Tools

Information was obtained on Parametric Cost Modeling, Activity-Based
Costing, Analogy-Based Costing, and unique cost approaches.

### 2.2.1 Parametric Cost Modeling Links

The JSC Parametric Cost Estimating Handbook describes Parametric Cost
Estimation as follows:

"A parametric cost estimate is one that uses Cost Estimating
Relationships (CERs) and associated mathematical algorithms (or logic)
to establish cost estimates. For example, detailed cost estimates for
manufacturing and test of an end item (for instance, a hardware
assembly) can be developed using very precise Industrial Engineering
standards and analysis. Performed in this manner, the cost estimating
process is laborious and time consuming. However, if history has
demonstrated that test (as the dependent variance) has normally been
valued at about 25% of the manufacturing value (the independent
variable), then a detailed test estimate need not be performed and can
simply be computed at the 25% (CER) level. It is important, though, that
any CERs used be carefully tested for validity using standard
statistical approaches."

#### Table VIII, Parametric Costing Links

  --------------------------------------------------------------- -----------------------------------
                                                                  

  <http://infinity.msfc.nasa.gov/Public/pp01/pp03/history.html>   History of NASA Cost Modeling
                                                                  Attempts

                                                                  

  <http://mijuno.larc.nasa.gov/dfc/biblio/pcab.html>              Parametric Cost Analysis
                                                                  Bibliography

                                                                  

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S10.HTM>       Parametric Cost Estimating

                                                                  

  <http://www.jsc.nasa.gov/bu2/PCEHHTML/pceh.htm>                 NASA JSC Parametric Cost Estimating
                                                                  Handbook

                                                                  

  <http://ic-www.arc.nasa.gov/ic/projects/saic/scea.html>         NASA ARC Paper on Parametric Cost
                                                                  Estimation

                                                                  

  <http://www.ispa-cost.org/pceinewsletters/pnews4.htm>           GE Parametric Cost Estimating
                                                                  Newsletter

                                                                  

  <http://www.jsc.nasa.gov/bu2/resources.html#software>           JSC Links to Cost Estimating
                                                                  Software, Books, Periodicals

                                                                  

  <http://www.ispa-cost.org/>                                     International Society of Parametric
                                                                  Analysts

                                                                  

                                                                  

  <http://www.contract.org/parametrics.htm>                       Parametric Cost Estimating
                                                                  Initiative
  --------------------------------------------------------------- -----------------------------------

### 2.2.2 Activity Based Costing Links

Chris Pieper of ABC University describes Activity-Based Costing as
follows:

> "Activity-Based Costing (ABC) was developed as a practical solution
> for problems associated with traditional cost management systems. In
> the early 1980\'s many companies began to realize that their
> traditional accounting systems were generating inaccurate costing
> information. Traditional cost accounting systems that were designed to
> address the issues of inventory valuation for external audiences have
> two deficiencies:

1.the inability to accurately determine actual total product and service
costs

> 2.the inability to provide useful information to management for
> purposes of making operating decisions
>
> As a result, managers of companies selling multiple products and
> services were making decisions about pricing, product mix, and
> technology based on inaccurate cost information.
>
> Alternatively, ABC focuses on the activities associated with operating
> the business. Traditional cost systems do not touch the subject except
> in reports that isolate salaries, benefits etc. If a manager were
> asked to cut costs, he or she would cut headcount believing that it is
> the only largest cost contributor. But, today, people are not the
> major cost contributors; activities that people do contribute more.
> How often have we heard the lament well, we\'ve cut our staff 20% but
> the work is still here. ABC allows managers to attribute costs to
> activities and products much more accurately than conventional
> accounting methods. ABC is more than an accounting tool. These tools
> give you a view of what you have done financially and are fundamental
> to shareholding disclosure and the statutory reporting. But it is as
> important to have the ability to translate this cost information to
> the language of operational units and the business. With ABC, you get
> a strong internal view of your products/services and customers. Armed
> with this information, you are ready to make financial, operational
> and strategic decisions such as outsourcing and pricing.
>
> ABC identifies the activities that are responsible for costs. Activity
> costs are passed on to products or services only if the product or
> service uses the activity, i.e. activities consume resources, and
> products/services consume activities. As the number of activity
> measures increase, ABC is better able to capture the underlying
> economics of the company\'s operations, and the reported
> activity/product/service costs come to light. In addition, ABC
> analyzes all activities exist to support production and deliver of
> goods and services."

**Table IX, Activity Based Costing Links**

  -------------------------------------------------------------------------------- -----------------------------------
                                                                                   

  <http://www.abctech.com/>                                                        **ABC University** -- Huge
                                                                                   Authority on Activity Based Costing
                                                                                   and Cost Models

  <http://www.pitt.edu/~roztocki/abc/abctutor/>                                    ABC Tutorial

                                                                                   

  <http://akao.larc.nasa.gov/dfc/abc.html>                                         NASA Paper on Activity Based Cost
                                                                                   Modeling

                                                                                   

  <http://www.ml.afrl.af.mil/successes/1998/ss98077.html>                          Air Force Activity-Based Costing
                                                                                   Reports

                                                                                   

                                                                                   

  <http://www.saffm.hq.af.mil/>                                                    AF Activity Based Costing Links

                                                                                   

  <http://www.ml.afrl.af.mil/successes/1998/ss98077.html>                          AF Activity-Based Success Stories

                                                                                   

  <http://www.ncca.navy.mil/research/98ABC_sel.htm>                                Navy Activity Based Costing
                                                                                   Analytical Reports

                                                                                   

                                                                                   

  <http://www.rutgers.edu/Accounting/raw/ima/imabc.htm>                            Implementing Activity Based Costing

                                                                                   

  <http://www.rutgers.edu/Accounting/raw/ima/imabc3.htm#bi>                        ABC Bibliography

                                                                                   

  <http://solutions.sun.com/catalogs/all/Business_Related/Government/33425.html>   Activity Based Costing **Software**

                                                                                   

  <http://www.sapling.com/>                                                        Activity Based Management **Tools**
                                                                                   NetProphet

                                                                                   

  <http://www.acornsys.com/>                                                       Activity Based Costing COST
                                                                                   **Software**

                                                                                   

  <http://www.abctech.com/software/prdserv1.htm>                                   OROS 99 Activity Based Costing
                                                                                   **COTS Package**
  -------------------------------------------------------------------------------- -----------------------------------

**Table IX, Activity Based Costing Links (Continued)**

  -------------------------------------------------------------------------------------------------------- -----------------------------------
                                                                                                           

  [**http://www.pitt.edu/\~roztocki/abceva/index.htm**](http://www.pitt.edu/~roztocki/abceva/index.htm)    **Univ. of Pittsburgh ABC and
                                                                                                           ABC/EVA !EXCELLENT TREATMENT and
                                                                                                           LIST OF ABC and EVA Links**

  [**http://www.pitt.edu/\~roztocki/abcmyths**](http://www.pitt.edu/~roztocki/abcmyths)                    **Presentation on Myths about ABC**

                                                                                                           

  [**http://www.newpaltz.edu/\~roztockn/abcpaper.htm**](http://www.newpaltz.edu/~roztockn/abcpaper.htm)    **Implementing ABC**

                                                                                                           

  [**http://mijuno.larc.nasa.gov/dfc/abc/abcbib.html**](http://mijuno.larc.nasa.gov/dfc/abc/abcbib.html)   **Annotated Bibliography on ABC
                                                                                                           from LARC**

                                                                                                           

  <http://mijuno.larc.nasa.gov/dfc/biblio/abcbiblio.html>                                                  Ed Dean's ABC Bibliography

                                                                                                           

  **<http://www.acq-ref.navy.mil/wcp/abc2.html>**                                                          **Navy Paper on Implemting ABC**

                                                                                                           

  **<http://mime1.marc.gatech.edu/Courseware/autorecycling/ABC.html>**                                     **Tutorial grom Ga Tech Also has
                                                                                                           ABC With FUZZY Logic to handle
                                                                                                           UNCERTAINTY!!!!**

                                                                                                           

  <http://www.nan.shh.fi/raw/ima/imabc.htm>                                                                **Paper on IMPLEMENTING ABC**

                                                                                                           

  <http://www.faa.gov/ait/bpi/handbook/chap5.htm>                                                          **ABC Costing Organizational Act
                                                                                                           from FAA**

                                                                                                           

  <http://www.cfoeurope.com/199810f.html>                                                                  **Critique of Activity Based
                                                                                                           Costing NOT as Easy as ABC!!!**

                                                                                                           

  <http://www.rutgers.edu/Accounting/raw/ima/imabc.htm>**.**                                               **Practices and Techniques
                                                                                                           Implementing ABC, Rutgers Univ**

                                                                                                           

  <http://www.abctech.com/library/library.htm#whitepapers>                                                 **HUGE Compendium of ABC Papers**

                                                                                                           

  [http://www.leadsoftware.com](http://www.leadsoftware.com/)                                              **LEAD Software, ABC COTS Tools**

                                                                                                           

  [http://www.acornsys.com](http://www.acornsys.com/)                                                      **Acorn Systems, ABC COTS Tools**

                                                                                                           

  <http://www.armstronglaing.com/solad.htm>                                                                **Armstrong Liang Co., ABC COTS
                                                                                                           Software and Process Mapping
                                                                                                           Tools**
  -------------------------------------------------------------------------------------------------------- -----------------------------------

### 2.2.3 Analogy-Based Costing Links

The basis of estimation by analogy is to characterize (in terms of a
number of variables) the project for which the estimate is to be made
and then to use this characterization to find other similar projects
that have already been completed. The known effort values for these
completed projects can then be utilized to construct an estimate for the
new project.

**Table X, Analogy-Based Costing Links**

  -------------------------------------------------------------------- -----------------------------------
                                                                       

  <http://www.estec.esa.nl/eawww/ecom/analogy/analogy.htm>             **Euro Space Agency, Cost
                                                                       Estimation by Analogy Page**

                                                                       

  <http://www.cs.jmu.edu/users/foxcj/cs555/Unit3/PrjPlan/sld009.htm>   *Cost Estimation by Analogy
                                                                       Tutorial*

                                                                       

  <http://web.nps.navy.mil/~drmi/chapter3.htm>                         Parametric and Analogy/Engineering
                                                                       based

                                                                       

  <http://dec.bournemouth.ac.uk/dec_ind/decind22/web/Angel.html>       Software Cost Estimation by
                                                                       Analogy, ANGEL Project

                                                                       

  <http://dec.bournemouth.ac.uk/dec_ind/decind22/web/ESCOM96.html>     Software Cost Estimation by
                                                                       Analogy,

                                                                       

  <http://dec.bournemouth.ac.uk/dec_ind/decind22/web/ESCOM95.html>     More on ANGEL Project

  <http://dec.bournemouth.ac.uk/dec_ind/decind22/web/ESCOM95.html>     Online paper: Software Support for
                                                                       Cost Estimation by Analogy

  <http://dec.bournemouth.ac.uk/dec_ind/decind22/web/ESCOM96.html>     Effort Estimation by Analogy: A
                                                                       Case Study
  -------------------------------------------------------------------- -----------------------------------

###  

### 2.2.4 Unique Cost Modeling Links

**Table XI, Unique Cost Modeling Links**

  -------------------------------------------------------------------------------------------------- -----------------------------------
                                                                                                     

  <http://www.dgsciences.com/bipsa/bpsa7n16.htm>                                                     **Neural Net Cost Estimator when**
                                                                                                     information is scant or conceptual

                                                                                                     

  <http://solutions.sun.com/catalogs/all/Manufacturing/Manufacturing_Resource_Planning/36593.html>   **MetCAPP Knowledge-Based** Process
                                                                                                     and Cost Estimating System

                                                                                                     

  <http://www.vtt.fi/cic/projects/combine2/cetl1.htm>                                                **COMBINE 2,** **Costing Tools** --
                                                                                                     includes Neural Net, user interface
                                                                                                     Visual Basic. Used for Early
                                                                                                     Planning Phases

  <http://www.ecfc.u-net.com/cost/machine.htm>                                                       **Machine Learning Cost
                                                                                                     Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/neural.htm>                                                        **Neural Net Cost Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/fuzzy.htm>                                                         **Fuzzy Logic Cost Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/case.htm>                                                          **Case-Based Reasoning Cost
                                                                                                     Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/analogy.htm>                                                       **Analogy-Based Cost Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/rule.htm>                                                          **Rule-Based Cost Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/trees.htm>                                                         **Regression Tree-Based Cost
                                                                                                     Estimators**

                                                                                                     

  <http://www.ecfc.u-net.com/cost/hybrid.htm>                                                        **Hybrid Neuro-Fuzzy Cost
                                                                                                     Estimators**

                                                                                                     
  -------------------------------------------------------------------------------------------------- -----------------------------------

### 2.2.5 COTS Cost Tools

Numerous Commercial-Off-the-Shelf cost tools were found, many listed
under Sun Microsystem's Solutions Catalog:

**Table XII, COTS Cost Tools**

  ------------------------------------------------------------- -----------------------------------
                                                                

  <http://www.jsc.nasa.gov/bu2/links.html#Companies>            NASA JSC's List of Cost-Related
                                                                Companies

                                                                

  <http://www.decisioneering.com/crystal_ball/index.html>       Crystal Ball Risk Analysis/Sim COTS

                                                                

  <http://www.estimatingsystems.com/>                           PULSAR Construction Cost Estimating
                                                                Tools

                                                                

  <http://www.galorath.com/main_frame.html>                     SEER COTS Tool

                                                                

  <http://www.galorath.com/estimating_frame.html>               Software Estimating Tools

                                                                

  <http://www.costimator.com/>                                  Manufacturing Technologies, Inc.
                                                                RapidCOST, FabriCOST, CostEstimator
                                                                COTS Tools

                                                                

  <http://www.microest.com/index.htm>                           Micro Estimating Systems , Inc.
                                                                Fabrication and Machining Cost Est
                                                                and Simulation

                                                                

  <http://www.modtechcorp.com/1.0/1.0.cfm>                      Modern Technologies Corporation,
                                                                cost analysis support

                                                                

  <http://www.ontrackengineering.com/ontrack.shtml>             **CostTrack Project Management
                                                                COTS**

                                                                

  <http://www.palisade.com/>                                    **Excellent Suite of Tools
                                                                including \@Risk**

                                                                

  <http://www.psindustry.com/frameset.html>                     **Manufacturing Cost Planning**

                                                                

  <http://www.resi.net/html3/winrace30.html>                    

                                                                

  <http://www.silcom.com/~technomi/cost_models.htm>             **SPACE, Aircraft, Communication,
                                                                Sensor Costing**

                                                                

  [http://www.leadsoftware.com](http://www.leadsoftware.com/)   **LEAD Software, ABC COTS Tools**

                                                                

  [http://www.acornsys.com](http://www.acornsys.com/)           **Acorn Systems, ABC COTS Tools**

                                                                

  <http://www.armstronglaing.com/solad.htm>                     **Armstrong Liang Co., ABC COTS
                                                                Software and Process Mapping
                                                                Tools**

                                                                

  <http://www.tecolote.com/products/models.htm>                 **SPACE related cost models**

                                                                

  <http://www.timberline.com/prec.htm>                          Construction Cost Modeling

                                                                

  <http://www.uscost.com/August.htm>                            Construction Cost Modeling

                                                                

  <http://www.vertigraph.com/>                                  

                                                                

  <http://www.walker.com/products_services/>                    Construction Cost Modeling

                                                                

  <http://www.winest.com/>                                      
  ------------------------------------------------------------- -----------------------------------

## 2.3 Process Modeling and Related COTS Tools

All space projects involve sequences of activities, some of which are
complex, involve large teams, and exhibit dependencies. These activities
constitute processes involving engineering, manufacturing, launch
operations, mission operations, test and checkout, payload integration,
and post mission analysis and data reduction. Clearly, the better the
knowledge of the processes, the better the ability to estimate costs
related to such activities. This is especially true for activity-based
cost approaches. Consequently, the ability to pictorially capture the
process and annotate/populate a database with cost related info will
help the cost estimation process. A number of COTS tools for process
modeling are currently available, some of which have
interfaces/components to Cost Estimation COTS Tools. They are summarized
below:

**Table XIII, Process Modeling and Related COTS Tools**

  -------------------------------------------------------------------------------------------------- -----------------------------------
                                                                                                     

  <http://www.ismodeler.com/index.html>                                                              **ISModeler** Process Modeling and
                                                                                                     Activity Based Costing COTS

  <http://www.simulationdynamics.com/index.htm>l                                                     Simulation Dynamics Process/Cost
                                                                                                     Modeling COTS

  <http://solutions.sun.com/catalogs/all/Business_Related/Vertical/17997.html>                       Process Modeling and Visualization
                                                                                                     Tool

  <http://solutions.sun.com/catalogs/all/Business_Related/Vertical/36763.html>                       What If Business Modeling SW

  <http://www.cs.man.ac.uk/ipg/>                                                                     Information Industry Process
                                                                                                     Modeling University of Manchester

  <http://www.cs.man.ac.uk/ipg/pelsiam.html>                                                         Legacy Process Engineering Tool
                                                                                                     Univ. of Manchester

  <http://www.cs.man.ac.uk/ipg/pie/pie-e.html>                                                       Process Instance Evolution Univ. of
                                                                                                     Manchester

  <http://www.elet.polimi.it/section/compeng/db/wf/>                                                 Workflow Management Modeling Milan
                                                                                                     Polytechnica University, including:
                                                                                                     Modeling of Unexpected Exceptions
                                                                                                     and a sophisticated Database to
                                                                                                     Support Workflow Management,
                                                                                                     Interoperability and
                                                                                                     Inter-Departmental Workflow

  <http://www.comp.lancs.ac.uk/computing/research/cseg/>                                             Cooperative Engineering, University
                                                                                                     of Lancaster:

  <http://www.ie.utoronto.ca/EIL/eil.html>                                                           University of Toronto: Industrial
                                                                                                     Engineering -- Enterprise
                                                                                                     Integration Laboratory include
                                                                                                     Supply Chain Management

  <http://www.dms.csiro.au/world/ProgC/mmip/>                                                        Mathematical Modeling of Industrial
                                                                                                     Processes

  <http://bprc.warwick.ac.uk/bp-site.html#SEC4>                                                      Process Reengineering: Research,
                                                                                                     Tools, Practice

  <http://www.cimpact.ch/Faq.html>                                                                   Process Model

  <http://solutions.sun.com/catalogs/all/Manufacturing/Manufacturing_Resource_Planning/38990.html>   CS/2 Processing, Workflow, and
                                                                                                     Costing SW

  <http://solutions.sun.com/catalogs/all/Manufacturing/Manufacturing_Resource_Planning/24710.html>   **Logility** Manufacturing Planning
                                                                                                     SW

  <http://solutions.sun.com/catalogs/all/Manufacturing/Manufacturing_Resource_Planning/36593.html>   **MetCAPP** Knowledge-Based Process
                                                                                                     and Cost Estimating System

  <http://www.gensym.com/>                                                                           Process Modeling

  <http://www.kbsi.com/>                                                                             Process Modeling , Knowledge Based
                                                                                                     Systems, Inc.

  <http://www.hyperion.com/solutions.cfm>                                                            Sapling Cost Modeling Software

  <http://www.kbsi.com/Services/R&d.htm>                                                             Activity-Based Costing, Knowledge
                                                                                                     Based Systems, Inc.

  <http://www.processmodel.com/Products/Overview/overview.html>                                      ProcessModel, Inc.

  <http://www.processmodel.com/>                                                                     ProcessModel

  <http://www.metasoftware.com/products.html>                                                        Workflow Analyzer from Meta
                                                                                                     Software

  <http://www.proformacorp.com/>                                                                     Business Process Re-engineering,
                                                                                                     Proforma Corporation
  -------------------------------------------------------------------------------------------------- -----------------------------------

## 2.4 Quality Function Deployment

Cost deployment is one facet of a holistic quality-based approach that
treats quality, technology, cost, and reliability throughout the product
life cycle. This approach allows the natural synergy amongst these
facets to drive a rational product life cycle. Numerous Quality Function
Deployment related web sites have been found, some of which focus on
Cost Deployment/Estimation. They are summarized below:

**Table XIV, Quality Function Deployment Links**

  ----------------------------------------------------------- -----------------------------------
                                                              

  <http://mijuno.larc.nasa.gov/dfc/qrd/cqfd.html>             Edwin Dean's treatment of CQFD and
                                                              QFD

                                                              

  [http://dfca.larc.nasa.gov](http://dfca.larc.nasa.gov/)     Edwin Dean's Design for Competitive
                                                              Advantage Page

                                                              

  <http://mijuno.larc.nasa.gov/dfc/qfd/qfdbib/cstdepb.html>   Cost Deployment

                                                              

  <http://mijuno.larc.nasa.gov/dfc/biblio/tcab.html>          Edwin Dean's Theoretical Cost
                                                              Analysis Bibl.

                                                              

  <http://dfca.larc.nasa.gov/dfc/ctec.html>                   Edwin Dean's Design for Comp.
                                                              Advantage Cost Page

                                                              

  [http://sscag.saic.com](http://sscag.saic.com/)             **SPACE SYSTEMS COST ANALYSIS**
                                                              Group VSP SHOULD JOIN!!

                                                              

  <http://www.dnh.mv.net:80/ipusers/rm/qfd.htm>               QFD Page

                                                              

  <http://box.ikp.liu.se/research/project/QFD.html>           QFD at Linkoping University
  ----------------------------------------------------------- -----------------------------------

##  2.5 Risk Assessment and Mitigation

No cost model would be complete without a treatment of risk and
uncertainty. After all, not all development efforts follow a completely
benign path -- unexpected failures or situations can and do occur. The
cost model should be sophisticated enough to allow for these paths and
give confidence intervals associated with them. A large compendium of
academic, government, and commercial reports are available as follows:

**Table XV, NASA Risk Assessment and Mitigation Links**

  ----------------------------------------------------------- -----------------------------------
                                                              

  <http://www.decisioneering.com/crystal_ball/index.html>     **Crystal Ball** Risk Analysis/Sim
                                                              COTS

                                                              

  <http://www.palisade.com/>                                  **Excellent Suite of Tools
                                                              including \@Risk**

                                                              

  <http://web.deskbook.osd.mil/valhtml/2/25/252/252S03.HTM>   Schedule Cost-Risk Analysis Module,

                                                              

  <http://www.elet.polimi.it/section/compeng/db/wf/>          Workflow Management Modeling Milan
                                                              Polytechnica University,
                                                              including**: Modeling of Unexpected
                                                              Exceptions** and a sophisticated
                                                              Database to Support Workflow
                                                              Management, Interoperability and
                                                              Inter-Departmental Workflow

                                                              

  <http://www.cs.man.ac.uk/ipg/>                              Information Industry Process
                                                              Modeling University of Manchester

                                                              

  <http://www.cs.man.ac.uk/ipg/pelsiam.html>                  Legacy Process Engineering Tool
                                                              Univ. of Manchester

                                                              

  <http://www.cs.man.ac.uk/ipg/pie/pie-e.html>                Process Instance Evolution Univ. of
                                                              Manchester

                                                              

  <http://www.ie.utoronto.ca/EIL/eil.html>                    University of Toronto: Industrial
                                                              Engineering -- Enterprise
                                                              Integration Laboratory include
                                                              Supply Chain Management

                                                              

  <http://www.dms.csiro.au/world/ProgC/mmip/>                 Mathematical Modeling of Industrial
                                                              Processes

                                                              

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S08.HTM>   **Cost-Risk Evaluator**

                                                              

  <http://web.deskbook.osd.mil/valhtml/2/2B/2B4/2B4S09.HTM>   **Correlation Calculator for
                                                              Cost-Risk Analysis**
  ----------------------------------------------------------- -----------------------------------

## 2.6 TRANSCOST Model

The TRANSCOST Model for Space Transportation Systems Cost Estimation and
Economic Optimization \[6\] covers all three areas of cost assessment:

Development Cost

Vehicle Recurring Cost

Flight Operations Cost

The Development Cost- and Vehicle Recurring Cost submodels are again
subdivided into models for the following technologies:

Liquid Rocket Engines

Solid Rocket Boosters

Expendable Ballistic Rocket Stages

Unmanned Reusable Ballistic Vehicles/Stages

Winged Orbital Reusable Vehicles

Advanced Aircraft/Winged First Stage Vehicles

TRANSCOST is a system-level model, and is based on actual costs of
completed projects with careful data evaluation and use of sophisticated
statistical methods. Consequently, a number of specific Cost Estimation
Relationships (CERs) have been derived. Many of the CERs are based on
vehicle or vehicle component mass and have the basic form of:

**C = a \* M^x^**

Where C = cost, a = a system-specific constant value, M = mass in kg,
and x = a system specific cost/mass sensitivity factor. The CERs are
derived from historical space projects and application of error
minimization techniques and outlier mitigation and special consideration
to 'first of a kind' projects. The submodel CER computations also
utilize 'f-factors' that take into consideration:

Development Standard

-   First Generation/State-of-the-art System

-   New Design Using Either Existing Components or Similar to Existing
    Systems

-   Variation of Existing Design, with Minor Modifications

> Technical Quality Factor

-   Element-specific Correction Factor

-   Related to Level of Technical Advancement

-   Related to Reliability/Safety/Maintainability Demands

> Team Experience Factor

-   Function of Team Experience with a Given Technology and Project

> Learning Factor

-   Cost Reduction Achieved when Producing a Series of Similar
    Projects/Vehicles

Dr. Koelle's models appear to reliably estimate some development- and
recurring costs of historical projects to within 15-50%. The newest
submodel, the Flight Operations Cost Submodel, is still in development.

TRANSCOST Flight Operations Cost Submodel is of particular interest
because the Vision Spaceport Cost Model currently focuses on twelve
launch/operations modules \[1\]\[2\]. The Flight Operations Cost Model
is comprises the following components:

-   Direct Operations Cost

-   Includes management, prelaunch operations (assembly, checkout),

> launch operations and mission control, propellants, and ground
>
> transportation.

-   Refurbishment and Maintenance Costs

-   All effort preceeding the pre-launch operations to bring the vehicle

> to the same status as a newly-buildt system.

-   Includes the cost of all required spares and manpower for
    maintenance.

-   Indirect Operations Cost

-   Program Administration

-   Launch Site Management, Facilities Maintenance, Spares, Storage and
    Supply Service

-   Engineering Support, Vehicle Improvements

-   Fees and Profit, Reserve Fund Contributions, etc.

-   Additional Costs (for commercial projects)

-   Vehicle Cost Amortization

-   Development Cost Amortization

The operations costs are sensitive to the size and complexity of the
vehicle (especially whether it is manned or unmanned), the assembly and
launch mode, the propellant cost, transportation and recovery mode, the
number of reusable elements and their refurbishment factors, the number
of launches per year, and indirect operations costs.

According to Dr. Koelle's data, the Flight Operations Cost Submodel
appears to account for the dominant cost drivers for historical
projects.

**Table XVI, TRANSCOST Related References**

+-----------------------------------+-----------------------------------+
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **TRANSCOST, Statistic-Analytical | **MBB-Report No. URV-180(88)**    |
| Model for Cost Estimation and     |                                   |
| Economic Optimization of Space    | **Author: Dietrich Koelle**       |
| Transportation Systems**          |                                   |
+-----------------------------------+-----------------------------------+
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **Future Low Cost Space           | **Acta Astronautica, Vol 6        |
| Transportation System Analysis**  | (1979), pp 1635-1668Euro Space    |
|                                   | Agency, Cost Estimation by        |
|                                   | Analogy Page,**                   |
|                                   |                                   |
|                                   | **Authors: Dietrich Koelle, H. H. |
|                                   | Koelle**                          |
+-----------------------------------+-----------------------------------+

## 2.6 Air Transport Association (ATA) System Code Approach

The Air Transport Association has devised a common set of
aircraft-related accounting codes. The codes are organized according to
industry-accepted categories including ones for aircraft systems,
subsystems, and components. Use of these standard codes provides an open
systems advantage and allows different groups, companies, and
organizations to share information and solutions. In particular, a
number of third-party aircraft/airline accounting packages and cost
simulation systems exist that utilize this standard.

Bryant Aumack of the USA Corporation, formerly of Eastern Airlines, has
done significant work streamlining and automating Eastern's accounting
and tracking system based on the ATA systems approach \[4\]. He also
completed a research effort to convert Shuttle accounting to an
ATA-compliant breakdown. Such a cost breakdown would allow a more
precise and detailed set of costs inputs to our cost model. It would
also allow the Shuttle world to utilize existing cost estimators, at
least for those Shuttle elements mappable to existing aircraft. Mr.
Aumack noted that a number of Shuttle systems are analogous to
commercial aircraft and that some existing models could probably be
tuned to our special requirements. For comparison purposes, the Shuttle
could be ranked between a Boeing 757 and a DC-10.

Use of ATA codes would go a long way in solving the "lack of data"
problem (described by Zapata and Torres \[1\]):

> *"The lack of hard data, such as maintainability parameters, cost data
> down to sub-systems (main propulsion, power, controls, etc) and most
> reliability/dependability data has severely hampered the state of
> operations cost modeling for future reusable space transportation
> systems. That the Shuttle fleet is the only semi-reusable,
> operational, crew capable, access to space makes the situation even
> more severe.*
>
> *This undesirable situation, affecting understanding the operation of
> reusable space transportation systems, has not gone without notice by
> multiple parties throughout the years"*

Another side-benefit of ATA-compliance would be the addition of several
alternative cost models for the Shuttle. These models and the Vision
Spaceport Model could be fit into the Binary Polling Scenario
Architecture approach to yield better results than any model alone. This
approach is analogous to the impressive results in hurricane prediction
that FSU achieved using similar methods.

**Table XVII, ATA Systems Codes and Approach Links**

  ----------------------------------------------------------- -----------------------------------
                                                              

  <http://www.air-transport.org/public/publications/61.asp>   **SPEC 2000: Integrated Data
                                                              Processing Materiels Management
                                                              (Main Document & Common Support
                                                              Data Dictionary)**

                                                              

  NASA/CR                                                     Space Shuttle Processing: A Case
                                                              Study In Artificial Intelligence

                                                              

  **NASA/CR 1999-20893**                                      **A User's Manual for Developing
                                                              Cost Estimator Relationships**

                                                              

  **NASA/CR-1998-207656**                                     **The ASAC Carrier Investment Model
                                                              (3^rd^ Gen)**
  ----------------------------------------------------------- -----------------------------------

#  3 Conclusions and Recommendations

The problem of estimating the cost of conceptual space projects is not
an exact science and demands knowledge of the accuracy of the data and
its effects on the final estimate. Even estimates for well-established
launch and mission applications have inherent uncertainties due to price
fluctuations, parts availability, and change in technology.

![](media/image2.wmf){width="5.995833333333334in"
height="2.5256944444444445in"}**Figure 1. Life Cycle Costs and Resources
Expended vs. Project Phase**

Compounding the situation, as shown in Figure 1.0, is the desire to
affect and set a course for a project during as early a conceptual phase
as possible so as not to expend major resources. An appropriate balance
of decision making information early in a project contrasts with still
being able to redirect those decisions based on cost or flight rate
analysis as these evolve. Especially as in many cases resource
expenditures rise steadily as a system definition occurs the need is to
be able to generate the insight required into future systems costs, such
as costs of operations, "a priori" without expending resources to a
degree that alternate options and redirections are not possible.

During the data collection phase, the author found existing models
utilizing parametric cost models, activity based costing, costs based on
analogy and similarity, and unique costing approaches. It appears that
activity based costing is the current trend. It may not, however, be
appropriate for all cost efforts because it requires (some level of)
detailed knowledge of industrial processes. Our more conceptual space
projects may not provide such in-depth (if any) knowledge of the
processes involved. Parametric modeling, on the other hand, takes a more
'thermodynamic' approach, and determines costing based on more general
driving parameters such as size, complexity, and application specific
drivers. This approach may be the prime method for areas where process
knowledge is scant or non-existent. Similarity- or analogy-based
estimates may be well suited for conceptual projects that are similar or
scalable from well-known cases. The TRANSCOST model provides a very good
framework for organizing conceptual space projects and has a proven
track record for historical projects. Its Flight Operations Cost Model
is particularly applicable to the Vision Spaceport Cost Model. The above
modeling choice predicament has parallels in physics: Detailed
quantum-mechanical models do very well predicting atomic and nuclear
behavior and many macro-scale phenomena as well. Thermodynamics and
statistical mechanics, are also successful predictors of large-scale
phenomena such as the behavior of gasses, liquids, and solids on a large
scale. Thermodynamic models extract relatively few key parameters and
derive fundamental and useful models of reality. In the nebulous world
of conceptual finance, we may need to utilize a rational combination of
parametric, activity-based, analogy-based, and unique costing
approaches. We, therefore, should consult experts in the field for
guidance and enlightenment. Consequently, the author recommends that the
VSP Synergy Team consult with:

1.  The MITRE Corporation's Economic Decision and Analysis Center (EDAC)

2.  Mr. Gideon Samid, of D&G Sciences Corporation

3.  The Aerospace Corporation's Costing Experts

4.  Edwin Dean, the NASA/Langley Costing/Business Process Expert

5.  JSC Engineers that developed the space-related cost models

6.  Jan Emblemsvag, Georgia Tech graduate student, author of ABC Model
    with Uncertainty

A number of COTS cost modeling and process modeling tools are available
that might accomplish significant parts of the costing/risk analysis
efforts. Consequently, the author recommends the following tools be
obtained for evaluation:

**Table XVIII, COTS Tools Recommended for Evaluation**

  ----------------- --------------------- ---------------------------------------------------------
  **Tool Type**     **Tool Name**         **Link**

  Process Modeling  IS/Modeler            <http://www.ismodeler.com/index.html>

  Process Modeling  Simulation Dynamics   <http://www.simulationdynamics.com/index.htm>l

  Process Modeling  Event & Activity      
                    Scheduler             

  Activity-Based    NetProphet (ABC)      <http://www.sapling.com/>
  Costing                                 

  Manufacturing     Costimator            <http://www.costimator.com/>
  Cost                                    

  Fabrication Cost  FabriCost             <http://www.costimator.com/>

  Risk Assessment   CrytalBall            <http://www.decisioneering.com/crystal_ball/index.html>

  Risk Assessment   \@Risk                <http://www.palisade.com/>

  Unique Costing    BiPSA                 <http://www.dgsciences.com/bipsa/bpsa7n16.htm>
  ----------------- --------------------- ---------------------------------------------------------

The author also recommends that Mr. Bryant Aumack's ATA Systems Code
approach be applied to Shuttle cost accounting and tracking. This would
effectively transform the previously unique, closed accounting and
tracking systems to an open one and open the door to applying (or
modifying) existing aircraft cost models and accounting tools for
Shuttle purposes. It would also solve the 'lack of data' problem
plaguing attempts to reliably mode Shuttle costs.

In light of the impressive hurricane tracking modeling by FSU
meteorologists who judiciously combined the outputs of several models, a
similar approach, BiPSA, could very well be applied to spaceport
costing.

In a similar light such an approach was used by NASA in it's 1997 Highly
Reusable Space Transportation System study. Table XVI from the NASA HRST
study executive summary highlights the use of multiple tools toward
gaining insights supporting complex technology, R&D related, investment
decisions.

Table XIX Use of Multiple Estimators and Analysis in Space
Transportation Operations

  -----------------------------------------------------------------------
  **Concept Name**       **Number of Times Ranked in Top 3 by Analysis**
  ---------------------- ------------------------------------------------
  **Argus**              **8**

  **ACRE 183**           **5**

  **Hyperion**           **4**

  **KM**                 **3**

  **Waverider**          **2**

  **ACRE 92**            **1**

  **TSTO**               **1**

  **ANSER**              **0**

  **LACE**               **0**

  **SSTO(R) LA**         **0**
  -----------------------------------------------------------------------

From the NASA HRST study, Executive Summary, November, 1998; Different
tools and experts can be successfully used to contribute to the analysis
of complex, long term, future R&D and investment decisions such as those
engendered within generic space transportation system design types. The
approach is similar in thought to the "Polling Scenario" as discussed
further ahead.

Mr. Gideon Samid, inventor of BiPSA, framed our situation very
succinctly:

"BiPSA: Binary Polling Scenario Analysis, is a new approach to estimate
cost at knowledge-edge. These are estimates, which border on the
guessing zone. Such estimates defy the true and tried methods and tools
of nominal cost engineering. They are soaked with uncertainty, inundated
with \'unknowns\' and require a long list of restrictive assumptions
(each removes the estimate further from reality) for any estimate to
take place. **Just about every spaceship that NASA ever built, was such
a knowledge-edge case.** Off shore rigs until today defy construction
cost estimators. Software projects, control, electronics, pharmaceutical
undertakings \-- all characterized by fast evolving technology and the
collapse of history as a direct estimating source. How can data from
software projects that were written in the 70s in COBOL for the IBM-360,
be of any help for a C++ or JAVA project written for an Intranet
environment? By way of contrast, the factors that represent, say, the
cost of paint in a construction project are not much different today
compared to what they were 30 years ago.

The fundamental difficulty, and in fact the metrics for knowledge-edge
estimates is the spectrum of learned opinions. While construction
estimators would differ by say 5 or 10 percent from each other, (even
for a multi million dollar project), estimators of R&D, and high-tech
engineering would mark a huge span of opinions and estimates, one
perhaps twice or even thrice than the other.

Not only do the estimates differ on their calling, but their agreement
or disagreement is often hard to ascertain. Each estimator would prepare
his or her own list of assumptions and so construct his estimate. If the
assumptions are not the same, there is little point in comparing the
estimates themselves. In practical terms, for a large project, the owner
would often summon several renowned estimators and instruct each to come
up with his or her own estimate. The expert, if only to justify his
subsequent bill, would prepare a detailed report, print it out in
several copies and distribute it to his client. So do the other say,
three of four independent experts. What is the poor owner to do? Where
will he find time to even read the over detailed, often pompous
narrations, and how would he compare the assumptions the suppositions,
the strength of the underlying logic etc.

So with all that investment in independent estimates the result becomes
a confusion, and a ripe case for \"another study\" or for a special
committee to look into the apparent complexity.

The above description applies to a grown class of estimates. They are
estimates, which fall between the two extremes:

\-- formula ready

\-- random picking

The formula-ready estimate are those which can be computed with the aid
of a proper formula, and the result is quite sound. The random-picking
cases are those where there is so little knowledge, so little
information that it is impossible to claim any scientific basis to an
asserted opinion. It\'s every body\'s guess!

It so happens that some of those hard to estimate projects turn out to
be the most profitable projects for their investors. The problem is that
these gems hide inside a heap of look-alike. It is no secret that
prosperity tomorrow depends on innovation today. And so visionaries,
dare-devils, as well as arch-conservatives like major banks take their
chances, and in turn challenge us, cost engineers, with developing new
methods, novel concepts, for taking on this impossible estimates. BiPSA:
Binary Polling Scenario Analysis is an attempt to respond to the
challenge."

#  

# Acknowledgements:

*The author gratefully acknowledges the help and guidance provided by
Edgar Zapata and the Vision Spaceport Synergy Team members, the
information on ATA System Codes and Approach provided by Bryant Aumack,
and the technical interchange provided by Ms. Diane Buell and the MITRE
EDAC Team.*

# Bibliography

\[1\] Edgar Zapata and Dr. Alex Ruiz Torres, "Space Transportation
Operations Cost Modeling and the

Architectural Assessment Tool -- Enhanced", International Astronautical
Federation (IAF-99),

Amsterdam, The Netherlands, October 1999

\[2\] Vision Spaceport Synergy Team, " Model Definition Document, with
Functional Requirements",

Vision Spaceport Organization, November 1999

\[3\] Conversations with Edgar Zapata, Vision Spaceport Synergy Team,
July-December 1999

\[4\] Conversations with Bryant Aumack, USA Corporation, December 1999

\[5\] Telecon with Ms. Diane Buell, Principal Space Systems Engineer,
and colleagues at The Mitre

Corporation, Economic Decision and Analysis Technical Center

\[6\] Dr. Dietrich Koelle, "TRANSCOST Statistic-Analytical Model for
Cost Estimation and Economic

Optimization of Space Transportation Systems", MBB_Report, 1988