# Presentation: 589361

## MAXIM Periscope Module

**PRICE H Cost Modeling**
**Bill Lawson**
**25 April 2003**

## PRICE H Cost Model

**PRICE H:  Commercial Parametric Hardware Cost Modeling Tool**
**Tool Heritage:  DOD**
**Global Parameters:**
- Labor Costs:  GSFC bid rates (used for in-house builds of spacecraft/instrument)
- Inflation:  NASA Inflation Index (MAXIM costs presented in Constant 2003 dollars)
- Engineering Environment
- NASA environment defined by PRICE Systems, Inc. calibration study
- Baseline environment emphasizes System Engineering, Project Management, and automated design capabilities
**Key Component Parameters:**
- Complexity Factors (Table driven from industry experience)
- Modification Level/Remaining Design Factor (Heritage)
- Quantity and Design Repeat (Learning Curve)
- Composition (Structure, Electronic, Purchased, Cost Pass-through)
- Mass
- Operating Platform (Unmanned-Space)

## ISAL PRICE H Cost Modeling

**Study begins with a blank model**
- Instrument payloads vary making a template approach difficult
- Similar components (e.g., electronics) from prior studies were incorporated and modified
**ISAL study output products:**
- Powerpoint presentation
- PRICE H model exported to Summary Excel Spreadsheet
- PRICE H model exported to Detailed Excel Spreadsheet
- PRICE model file (requires PRICE H software)
- Upon request:  Text reports containing input/outputs for each cost element

## Top-Level Cost Model

## Expanded Model

## PRICE Cost Summary1st “Periscope-Pair”

**PRICE Cost Summary****1****st**** “Periscope-Pair”**

**Engineering**

**Manufacturing**

**Cost Element**
**(Summary Report**
**Available for each **
**cost element)**

**Year Dollars**
**($03)**

**Total Cost Estimate**
**$23.9M**

**Production**

**Development**

**Schedule**

**Project Management**

**Mass**

## PRICE Cost Estimate Summary Incremental Cost of 2nd Unit (T2)

**PRICE Cost Estimate Summary**** Incremental Cost of 2****nd**** Unit (T2)**

- T1

- T1 + T2

## Learning Curve Basics

**PRICE H Users Manual:**
- Basis for improvement is the “human learning process”
- Learning curves in PRICE H apply to production run (not development)
- The more one produces, the more efficient one becomes
- Production learning improvement is virtually non-existent for automated manufacturing methods
- PRICE H provides a parameter to adjust the degree of automation (MPI)
- Typically, automation lowers Theoretical First Piece (T1) cost and flattens the Unit Learning Curve
**NASA Cost Estimating Handbook (April 2002)**
- The learning curve concept is used primarily for uninterrupted manufacturing and assembly tasks
- The major premise of learning curves is that each time the product quantity doubles the resources (labor hours) required to produce the product will reduce by a determined percentage.

## Multiple Unit Studies (PRICE H Learning Curve)

**PRICE H:**
- Calculates Theoretical First Piece (T1) production unit (most costly to produce)
- Incorporates industry standard Boeing Unit Learning Curve (ULC)
- Applies a correction factor to improve accuracy (for lower quantity studies)
- Includes Stanford-b formula to transfer prototype learning to manufacturing
- Calculates Production Average Unit Cost (UPC)

**Production Cost = T1**

**(QTY + QCF + Stan_b)  - (QCF + Stan_b)**

**A**

**A**

**A**

**- ULCF**

**Where:**

**ULCF = **

**(A – 1) (A – 2)**

**24**

**A = 1 +**

**ln(UNITLC)**

**ln(2)**

**QCF = 0.5151 – 0.001116 ln(QTY)**

**Stan_b = (input %)(Protos)**

**ULCF is PRICE H correction factor**

**Part of Boeing Equation**

**Quantity dependent correction factor**

**Percent of Prototypes to include**

## Learning Curves

## Summary Cost Estimate

## MAXIM_PRICEcost.xlsDetailed Cost Estimate (1st “Periscope-Pair”)

- ...