# Presentation: 185694

## Process-Based Cost ModelingChristian Smart, Ph.D.SAICMarch 9, 2004

## Background

- Cost analysts have used weight-based parametric cost models for 50 years*
- Weight-based estimates have advantages, but also limitations
- Recent focus has been placed on developing next-generation cost models**

- *Joe Hamaker, “But What Will It Cost? The Evolution of NASA Cost Estimating” , Issues in NASA Program and Project Management, 1991.
- **Andy Prince, ”Weight and the Future of Space Flight Hardware Cost Modeling,”, SCEA National Conference, 2003

## Next Generation Cost Modeling

- Traditional parametric approaches are very useful for cost estimating
- But even the most sophisticated multivariate models have limitations
- One example is out-of-date samples and small sample sizes for some manned launched vehicle subsystems
- Crew Accommodations
- Crew Life Support
- There is need for a tool to supplement existing parametric models

## Overview

- The objective is to improve state-of-the-art cost
- 	modeling techniques using process-based estimation
- Process-based models supplement traditional parametric tools
- they are ***not*** intended to replace parametric estimates
- Traditional parametrics provide an early estimate of a project’s cost
- These traditional weight-based statistical estimates can be greatly refined using a process-based model

## Process-Based Modeling

- Process-based cost modeling promises to provide a greater level of fidelity for cost estimating
- May be especially useful for large projects
- Parametric analysis has tended to focus on the “what” of cost
- Process-based modeling focuses on the “how”
- Process-based modeling is a relatively new approach to cost estimation
- Process-based models are also being developed by Boeing and Galorath

## Process-Based Modeling (cont.)

- Process-based modeling provides cost estimates  by
- 	relating cost drivers to the processes that occur during design, development, test, evaluation, and production
- Cost drivers affect cost by directly impacting the cost
- 	of the processes
- Adding/removing some process,
- Changing the number of times some process occurs
- Changing the cost of a specific process
- In addition to serving as an estimation tool, the process-based model will also be a communication tool between cost analysts and project personnel and management

## Scope

- Capture all processes that occur during Phase C/D, from ATP up to Operational Readiness Review
- Focus on manned launch vehicles only
- Reflect recent aerospace program development and experience
- Model is top-down, with processes defined at an intermediate level (rather than the lowest level possible)

## Outline of the Modeling Process

- Document processes at the subsystem level – design, tooling, fabrication, assembly, etc., and account for interfaces
- Collect detailed time-phased costs for several programs
- Analyze historical data
- Create calibrated models
- Develop algorithms for relating complexity generators to cost

## Cataloging Processes

- Created detailed process flows (process catalogue) for all spacecraft-related subsystems
- Includes hardware and systems engineering/integration subsystems
- Met with subject-matter experts for each subsystem to validate the process flows and revise as needed
- Catalogued over 500 generic processes

## Process Catalog - Example

- Interface with Systems
- Personnel, Discuss
- Requirements,
- Constraints, etc.

- Provide
- Data
- To Other
- Disciplines

- Determine
- Sensitivities
- & Margins

- Detailed
- Design
- Complete?

- N

- Y

- Produce
- Drawings,
- Etc.

- Perform
- Detailed
- Analyses

- Meets
- Requirements?

- Y

- N

- Local
- Re-design

- Re-design
- Impacts
- System?

- N

- Y

*Detailed Design Process Flow - Structures*

## Data Collection

- Collected detailed cost data for several missions
- Apollo
-  Cassini
- Chandra
- Shuttle
- Galileo
- In the process of collecting data for other missions
-  Gemini
- X-37

## Data Analysis

- Collected detailed, time-phased WBS level cost and data for Shuttle and Apollo
- Allocated cost to the individual process level using schedules and other information

## Data Analysis Flow

## Model Development - Shuttle

- Analyzed detailed, time-phased historical data for Shuttle Orbiter and modeled 22 subsystems and over 700 processes

| Structures – 58 | Technical Mgt. and Support – 24 |
| --- | --- |
| Thermal Protection – 43 | Provisioning – 9 |
| EPD&C – 40  | Trainers and Mockups – 31 |
| GN&C – 38  | Mechanical Systems – 38 |
| CC&DH – 59 | Auxiliary Propulsion – 48 |
| Avionics Dev. And Int. Labs – 19 | ECLS – 31 |
| Approach and Landing Tests – 23 | IACO – 24 |
| Crew Station – 33 | GSE – 37 |
| Major Test and Support – 36 | Power Generation (APU) – 35 |
| Flight Tech. Analysis – 11 | System Requirements – 11 |
| Design and Project Control – 19 | Safety and Reliability - 24 |

## Model Development - Apollo

- Analyzed detailed, time-phased historical data for Apollo CSM and modeled 8 subsystems and over 250 processes

| Crew Module Structures – 39 | Service Module Structures – 38 |
| --- | --- |
| Crew Module Heat Shield - 37 | Crew Accommodations - 33 |
| Crew Module Mechanisms - 37 | Launch Escape  Structures - 38 |
| Earth Landing System - 37 | Launch Escape SRMs - 38 |

## Calibrated Models

- Calibrating the models to specific historical programs is similar in its approach to using analogy-calibrated weight based CERs
- Our efforts to date have been focused on calculating the “intercepts”
- We have more “intercepts” to calculate, but we must also must calculate the “slope”

- Apollo

- Shuttle

- Complexity Generator

- Cost

## Algorithms and Process Drivers

- NAFCOM complexity generator inputs are used
- Also, based on our research to date and the information gathered from subject matter experts and several key process drivers will be added, including
- Material type
- Hardware geometry
- Organizational structure

## Process-Based Modeling and NAFCOM

- Process-based model is at the subsystem level
- Structures
- Thermal Control
- Systems Engineering
- Etc.
- Cost drivers include all the NAFCOM complexity generators, plus others:
- Material Type
- Organization Structure
- Etc.

## Example – Detailed Structural DesignCost Drivers

- NAFCOM Cost Drivers for Structures Include:
- Weight
- New Design
- Engineering Management
- Manufacturing Methods
- Number of Deployed Structures
- Funding Availability
- Test Approach
- Integration Complexity
- Amount of Pre-Development Study
- Large Inert Structure (Yes/No)

## Example – Relating % New Design and Engineering Management To Cost

- Engineering Management reflects the experience of the design team and the environment of the design effort
- Both % New Design and Engineering Management can range from 0 to 100
-  Detailed Structural Design has three sets of loops
- One of the projects (but not the only project) to which the model is calibrated is Shuttle  - for Shuttle, the number of iterations was 5, 3, and 2

## Example – Relating % New Design and Engineering Management To Cost (cont’d)

- % New Design
- 0-10, Reflight
- 11-21, Minor Mods., No Requal.
- 22-31, Minor Mods., Requal.
- 32-55, Moderate Mods.
- 56-73, Significant Mods.
- 74-85, Based on Prev. Design
- 86-96, Similar to Prev. Design
- 97-100, New Design

- Engineering Management
- 0-12, Minimum Design Changes
- 13-37, Few Design Changes
- 38-62, Moderate Design Changes
- 63-87, Dedicated Design Team, Experiences Sig. Reqmts. Changes
- 88-100, Distributed Design Team, Dependent Upon Major Technological Advances

## Example – Relating % New Design and Engineering Management To Cost (cont’d)

- Using the Shuttle values as a point of departure as an example, the definitions of levels of engineering management and % new design, we have the following table:

## Additional Products

- In addition to providing a modeling tool, an additional
- product of the process-based model is the most
- complete and detailed time-phased breakout of Shuttle
- and Apollo costs known to exist

## Future Plans

- Incorporate recent advances in aerospace design and manufacturing
- Make model applicable to generic launch vehicles
- Test the model and compare results to NAFCOM
- Deliver a stand-alone Excel-based prototype model in November for use in the evaluation of future launch vehicle architectures
- Eventually incorporate model into NAFCOM