SPACE TECHNOLOGY & APPLICATIONS INTERNATIONAL FORUM (STAIF -98) Conference on Next Generation Launch Vehicles E5 - Cost & Operations A NOVEL METHODOLOGY.

SPACE TECHNOLOGY & APPLICATIONS INTERNATIONAL FORUM (STAIF -98)

Conference on Next Generation Launch VehiclesE5 - Cost & Operations

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES

January 25-29, 1998 Albuquerque, N.M.

RUSSEL RHODES/NASA

RAYMOND BYRD/BOEING

KENNEDY SPACE CENTER, FL.

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES

Introduction:• Process enables "quick look" estimations and evaluations to effectively determine

if a concept provides focus for leapfrog improvement (Relies on existing cost estimating tools for input)

• A back of the envelope technique for fast, timely, on-the-spot, assessment of affordability (profitability) of commercial space transportation concepts

• Cost Charts are provided to determine relationships and/or upper limits

• Process will enable user to develop "cost and price per payload unit to orbit" supplemental to basic vehicle cost estimates for determining concept's ability to achieve system-profitability goals

• Technique will allow architectural concept developer or user to easily determine concepts' conformance to system required objectives

EARTH ORBIT TRANSPORT SERVICE CORPORATION

INVESTORS $ $ $ $ $ $

CUSTOMERS $ $ $ $ $

PAYLOADS

CAPITAL INVESTMENT• REAL PROPERTY• EQUIPMENT• PEOPLE

REVENUESTREAM

CORPORATEOPERATIONSCOST

GROSS INCOME NET PROFIT

$$

OPERATIONS• NON-RECURRING COST• RECURRING COST

RECURRING• DEBT SERVICE• LABOR• HARDWARE• PROPELLANTS• INSURANCE

NON-RECURRING• REAL PROPERTY• FLIGHT VEHICLE(S)• GSE

TAXES

Visualization Diagram of the Business Process

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURESDiscussion on the Use of Charts and Assumptions That Apply to Each:

COST • Non-recurring cost

– Acquisition Cost

• Recurring Cost

– Acquisition Payback Cost

– Labor Cost

– Replacement Hardware Cost

– Propellant Cost

PRICE • Recurring Factors

– Debt Service

– Insurance

– Profit

PAYLOAD CAPACITY IS ASSUMED TO BE 20,000 LB. TO LOW EARTH ORBIT, IF PAYLOAD CAPACITY IS 2X ASSUMED, COST/UNIT TO ORBIT VALUES ARE 1/2 THOSE SHOWN; OR, IF PAYLOAD CAPACITY IS 1/2 ASSUMED, THE VALUES ARE 2X THOSE SHOWN

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES• Tutorial Exercise Using the Charts to Understand the Bounds for

Major Cost Related to a Profitable Space Transportation System:

ASSIGNED ASSUMPTIONS– Investment where recurring cost are controlled at $200/pound to orbit– Price controlled at $400/pound to orbit– One (1) Billion dollar vehicle investment for two (2) vehicles total– One (1) Billion dollar ground infrastructure investment– Labor cost goal @ 10% of total cost ($20/pound to orbit)– Replacement hardware cost goal @ 10% of total cost ($20/pound to orbit)– Propellant cost goal @ 10% of total cost ($20/pound to orbit)– Acquisition investment payback in 5 years– Flight rate @ 50 times per year per vehicle (100 flights/year total) – Vehicle payload delivery to orbit of 20,000 pounds each flight– Investment mony acquired at 20% simple interest for 5 years ($1 billion)– Insurance cost @ 1% vehicle investment exposed ($500 million/year)

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES• Assessment From The Charts:

– From the acquisition chart for 5 year payback, yields $100/pound to orbit

and left $100/pound for other operating costs

– Infrastructure investment by Spaceport and charged through fees

– Labor, replacement hardware, and propellant cost = $60/pound to orbit

– Debit service accounts for $1billion over 5 yrs. or $100/pound to orbit which leaves $100/pound to cover insurance

– Profit was a loss of $110/pound because insurance cost of $250/pound to orbit

• Limit vehicle cost to 1/2 of assigned ($250 million/each) and check– Now acquisition chart for 5 years payback yields $50/pound to orbit

– Debit service now is $1/2 billion over 5 years or $50/pound to orbit

– Total operating cost is $110/pound to orbit

– Insurance cost $125/pound to orbit plus debit service of $50/pound

– Gross income would be $400 - 285 = $115/pound to orbit (reasonable?) High !

0

4

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16

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24

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$400

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it

$200

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$100/lb to orbit

$50/lb to orbit

0 200 400 600 800 1000 1200 1400 1600 1800

0 1 2 3 4 5FLIGHTS/YEAR

TO

TA

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FIGURE 1. Total Acquisition Cost @ 20% & 5 year payback

0

1

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2

B

3

B

4

B

5

B

6

B

7

B

0 40 80 120 160 200 240 280 320 360 FLIGHTS /YEAR

$800

/lb t

o or

bit

$400

/lb to

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it

$200/lb to

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$100/lb to orbit

$50/lb to orbit

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Sum

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to

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it

FIGURE 1c. Total Acquisition Cost @ 20 % & 5 year payback

0 200 400 600 800 1000 1200 1400 1600 1800

0 1 2 3 4 5

FLIGHTS/YEAR

FLIGHTS /DAY

TO

TA

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bit

$400

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orb

it

$200

/lb to

orbit

$100/lb to orbit

$50/lb to orbit

$160

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to

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it

FIGURE 1d. Total Acquisition Cost @ 20 % 10 year payback

0

2

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4

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8

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1

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0 40 80 120 160 200 240 280 320 360 FLIGHTS /YEAR

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Sum

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it

$200/lb to

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$100/lb to orbit

$50/lb to orbit

$160

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to

orbi

t

FIGURE 1b. Total Acquisition Cost @ 20 % & 10 year payback

0 40 80 120 160 200 240 280 320 360 FLIGHTS /YEAR

TO

TA

L A

CQ

UIS

ITIO

N C

OS

T -

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it

$200/lb to

orbit

$100/lb to orbit

$50/lb to orbit

$160

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to

orbi

t

FIGURE 1a. Total Acquisition Cost @ 10% & 10 year payback

0 40 80 120 160 200 240 280 320 360FLIGHTS/YEAR

23

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FIGURE 2. Recurring Labor Cost @ $40/hr average rate

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0 40 80 120 160 200 240 280 320 360FLIGHTS/YEAR

$20,000/lb to orbit (Early 1990's Shuttle curve)

$5,000/lb to orbit (Early 1990's KSC ops contractor curve)500

1

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FIGURE 2a. Recurring Labor Cost @ $ 40/hr average rate

0 40 80 120 160 200 240 280 320 360FLIGHTS/YEAR

0

4

0

8

0

120

1

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200

2

40

AN

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it

$80/

lb to

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it

$40/lb to

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$20/lb to orbit

$10/lb to orbit

$5/lb to orbit

FIGURE 3. Replacement Hardware Cost

0 40 80 120 160 200 240 280 320 360FLIGHTS/YEAR

0

4

0

80

120

1

80

200

2

40

AN

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AL

PR

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it

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$20/lb to orbit

$10/lb to orbit

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it

FIGURE 4. Recurring Propellant Cost

0 40 80 120 160 200 240 280 320 360

FLIGHTS/YEAR

AN

NU

AL

IN

SU

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FIGURE 5. Insurance Cost

0 40 80 120 160 200 240 280 320 360FLIGHTS/YEAR

0

6

4

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1

92

256

3

20

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A

NN

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@ $

200/

lb t

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bit

)

25% or $50/lb

to orbit

20% or $40/lb to orbit

15% or $30/lb to orbit

10% or $20/lb to orbit

FIGURE 6. Annual Profit @ $200/lb to orbit cost

0 40 80 120 160 200 240 280 320 360FLIGHTS/YEAR

0

25

6

512

7

68

1024

1

280

153

6

A

NN

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L P

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- $

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ed O

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tion

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ost

@ $

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lb t

o or

bit)

25% or $200/lb to

orbit

20% or $160/lb to orbit

15% or $120/lb to orbit

10% or $80/lb to orbit

FIGURE 6a. Annual Profit @ $800/lb to orbit cost

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES• Relationship of Orbiter Orbit Stay Time and Time Available for Non-

scheduled Maintenance @ 50 flights per Year per Vehicle:– For 2 days in orbit each flight, would utilize 100 days a year– Leaves only 265 days for ground turn-around operations, including payload

and propellant servicing and both scheduled & un-scheduled maintenance– Assuming an operational availability factor of 0.90, leaves 26.5 days per year,

or an average of 12.7 hours per flight for un-scheduled maintenance– For (airline-like) 1/4 day in orbit each flight, would utilize 91.25 days a year – Leaves only 273.75 days for ground turnaround operations– Assuming an airline-like operational availability factor of 0.98, leaves 5.5 days

per year, or an average of 21.7 minutes per flight for un-scheduled maintenance

• High availability and minimum orbit stay time add synergistically to enable the promise of an operable and responsive (affordable) space transportation system

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURESMAJOR COST DRIVER RELATIONSHIPS

"1994" SHUTTLE BENCH MARKS

• Total Program Budget $ 4,973.4 Million– Labor Cost $ 3,445.9 Million or Headcount of 37,147 FTE's

– Hardware & Materials $ 1,527.4 Million

$ 14,210/# to Orbit or $ 710.49 Million/Flight

• Shuttle Operations Only $ 3,375.7 Million

– Hardware & Materials $ 920.9 Million

– Labor Cost $ 2,454.7 or Headcount of 28,461 FTE's

• Labor– Total Program $ 3,445.9 Million or Headcount of 37,147 FTE's

$ 9,846/# to Orbit or $ 492.27 Million/Flight

• Shuttle Operations only $ 2,454.7 Million or Headcount of 28,461 FTE's

$ 7,014/# to Orbit or $ 35.67 Million/Flight

– Located @ KSC Labor Cost $ 637 Million or 8,657 FTE's

$ 1820/# to Orbit or $ 91 Million/Flight

• Launch Operations $ 503.5 Million or 7,547 FTE's

• Orbiter Logistics $ 133.5 Million or 1110 FTE's

– SSME Logistics $ 121.6 Million or 869 FTE's

A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE

CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES

MAJOR COST DRIVER RELATIONSHIPS

"1994" SHUTTLE BENCH MARKS CON'T

• Replacement Parts Support Labor "Covered Above"– $ 110.7 Million

$ 316.29/# to Orbit or $ 15.8 Million/Flight • Orbiter $ 40.5 Million $ 133.5 Million or 1110 FTE's

• SSME $ 41.4 Million $ 121.6 Million or 869 FTE's

• Ground Systems $ 28.8 Million $ 12.2 Million or 219 FTE's

• Propellants Support Labor "Covered Above"– $ 10 Million $ 6.6 Million or 60 FTE's

$ 28.57/# to Orbit or $ 1.43 Million/Flight

• Number of Launches Completed in FY-1994– 7 Flights

$ 9,645/# to Orbit or $ 482.24 Million/Flight = $ 3,375.7 Million