From: steinly@topaz.ucsc.edu (Steinn Sigurdsson)
Newsgroups: sci.space
Subject: Re: Stupid Shut Cost arguements (was Re: Terminal Velocity of DCX?
Date: 23 Dec 92 20:14:15 GMT
	<STEINLY.92Dec23102952@topaz.ucsc.edu> <1992Dec23.191306.6705@iti.org>
Organization: Lick Observatory/UCO
NNTP-Posting-Host: topaz.ucsc.edu
In-reply-to: aws@iti.org's message of 23 Dec 92 19:13:06 GMT

In article <1992Dec23.191306.6705@iti.org> aws@iti.org (Allen W. Sherzer) writes:

Sheesh, that was fast! Doesn't anyone break for holidays any more?

   In article <STEINLY.92Dec23102952@topaz.ucsc.edu> steinly@topaz.ucsc.edu (Steinn Sigurdsson) writes:

   >   You left out the $34 billion (in 86 $$) development costs which must
   >   be amortized.

   >Does this include the cost of the Enterprise? 

   When Boeing built the first 747 it was a non-flying test aircraft just
   like Enterprise in most important respects. Since Boeing didn't count
   this first 747 as a sunk cost (they would be bankrupt if they did) I
   don't think Enterprise should be considered a sunk cost.

A gliding body with no engines and no heat shield is comparable
to the operational system? And are you sure that the first 747 didn't
fly? Even the first 707 flew and that was a far more groundbreaking 
test article (despite the B-47 and B-52 which sunk some of the
development costs - and it still crashed before taking off!).
Henry, you there to arbitrate?

   >If so, why is it not a
   >sunk cost as you argue the DC-Y should be? 

   DC-Y is a proof of concept for a very limited market (SDI deployment). The
   DC-1 will likely be a very different vehicle and will be a new one for all
   practical purposes. That cannot be said for Enterprise.

   >Does it include
   >construction of wind tunnels, the (Grumman?) glide simulator and
   >operations thereof? 

   Since Boeing charges those things to development and passes those on to
   customers, I think NASA should as well for its operational vehicles.

Really, did Boeing pay for the development of winglets (those little
dinky wingtip things the latest models have)? Did they pay for the
aerodynamic studies of ducted vs unducted fans? Did they even pay
for the development costs of the basic jetliner airbody designs
or did they sink it to military contracts? 
[as I understand it, the developments I mentioned above were largely
done by NASA, under its first "A" - and, no, I don't think those
studies included to any "real" science [sic] - including some work done at NASA
Ames using the windtunnel that did the shuttle 1/3 scale simulations. 

   >What about the software development costs for
   >doing a lot of the aerodynamic simulations, 

   Boeing also writes software for aerodynamic simulations when it developes
   aricraft. The cost of this is included in development and is passed on
   to customers. NASA should as well for its operational vehicles.

   Fair enough?

Nope, not when a lot of the algorithm development is done
by NASA and Universities under NASA contracts and then
handed over to the aerospace companies at below cost (or for
free).

   >You've said you want to bill all manned space program costs to the
   >shuttle, 

   No, that is not what I said. That is what Dennis put into my mouth.

I thought you quoted a (Pike?) study saying $500 M per flight
charging all costs to shuttle, $750 M if (sunk) development costs
were included. Apologies if it was Dennis...

   >does that include suit development? If so, what are the DC
   >personnel going to wear for EVA?

   Well, I think they should pay their fair share of the development costs
   for whatever suit they use.

Yeah, right. Is there still a line in the budget to recoup Apollo and
Mercury sunk costs? Sometimes you just have to write some costs off
as sunk and not try to recoup them...

   >I think you are quite inconsistent in how you assign costs to
   >the DC and Shuttle. 

   I disagree. However, it is a minor point since if you use the same rules
   (pick any you like) DC comes out far far ahead of Shuttle. In fact, you
   could amortize DC-Y development, DC-X development, and DC-1 development
   and it STILL comes out cheaper than the operational costs of Shuttle
   (~$6,000 per pound for DC vs $10,000 per pound for Shuttle). All three

Over how many flights??? At the moment, with zero flights the DC is
inifintely more expensive than the shuttle! What flight rate and
amortization period are you using?

   efforts cold be funded with the interest you would get by putting Shuttle
   development money in the bank at 5%.

No, you'd have to use it for severance pay...

   >For instance you explicitly said tank farm
   >operation for LOX and LH2 should not be included, only the marginal
   >cost of loading each DC 

   No, I have never said that. I think DC will get fuel from the same
   source that airliners get fuel. American Airline doesn't produce its
   own fuel, not do they get it at marginal cost. Instead they buy it
   from suppliers who include the cost of tank farms in the price they
   charge. DC will be no different.

Again over how many flights to you propose to amortise the
infrastructure for? What throughput will you guarantee whoever
capitalises the tank farm construction and pays for operation?
That will critically determine the cost. 

|  Steinn Sigurdsson	|I saw two shooting stars last night		|
|  Lick Observatory	|I wished on them but they were only satellites	|
| steinly@lick.ucsc.edu |Is it wrong to wish on space hardware?		|
| "standard disclaimer"	|I wish, I wish, I wish you'd care - B.B. 1983	|