Mission Configuration – 100g Payload – Cost Analysis
Section A-5.8
A-5.8 - Cost Analysis
The purpose of this section of the appendix is to provide deeper insight into the cost
analysis methods found in the main body of the paper. The level of detail in the costing
method is representative of a feasibility study. While this method is not perfect, it
provides a baseline for the reader to improve upon. We realize that a different costing
method may result in the selection of different mission configurations.
We choose to abandon the NASA cost calculator. The online calculator provides an
order-of-magnitude estimation of total mission based on curve fits from previous NASA
missions. While this method has the advantage of using historical data to estimate cost,
all data points are previous NASA missions. Government organizations are notorious for
over-spending and inefficient use of funds. Our mission, designed to be built by a small
private company, is expected trim the total mission cost significantly compared to a
government organization.
We calculate costs using a bottom-up method, starting cost analysis at the component
level and working our way up to a total mission cost. Our model combines the cost of
each vehicle as well as an overhead cost to calculate a total mission cost. Each vehicle’s
cost is separated into three categories: purchase, integration, and research and
development. We tabulate these costs in Cost_Reliability_Model_100g.xlsx.
Purchase
The cost of purchasing off-the-shelf components.
This does not take into account
assembly or testing costs. The team quickly found that purchase costs are difficult to find
and are somewhat negotiable within the aerospace industry.
The costs within this
category are either quotes from industry or estimates based on historical data.
assume all component purchases are made in 2009.
Integration
Author: Solomon Westerman
We
Mission Configuration – 100g Payload – Cost Analysis
The cost associated with manufacturing a vehicle.
Section A-5.8
In reality, this cost would be a
function many variables, including vehicle complexity and problems encountered during
assembly. In this project, we make the simplifying assumption that the integration cost is
only a function of the vehicle mass. We base the integration cost on a manned lunar
architecture proposal by an aerospace consulting firm. (Herbert)
We expect manned lunar missions to be more expensive, per kilogram, than unmanned
missions. However, large manned missions have an economy of scale that may reduce
the cost per kilogram relative to smaller missions. In our analysis, we assume these
factors wash out and use a $10k per kilogram estimate for integration costs. We believe
this is an appropriate first-order approximation to the integration costs encountered in the
aerospace industry.
Research and Development
The cost of developing or refining a technology in-house. In many cases, off-the-shelf
components matching our requirements did not exist or were too expensive to be
considered. In some of these cases, we decide to design a system in-house in an attempt
to reduce the overall system cost. The research and development cost is an estimation of
the cost to design, build, and test a system we design in-house.
This cost is a function of the success rate of the system as well as the number of
engineers employed, their salaries, and testing equipment costs. We assume each month
of research and development increases the success rate of the system by two percent with
cap of 95%. We employ twenty engineers at a cost of $150k each per year ($12.5k per
month) and add $50k of testing equipment per month.
Overhead
Overhead is a separate category of cost independent of vehicle. Overhead represents the
recurring cost of maintaining a functioning company. This cost includes salary expense
for fifteen engineers at $150k per year. We purchase three Satellite Tool Kit licenses at
Author: Solomon Westerman
Mission Configuration – 100g Payload – Cost Analysis
Section A-5.8
$200k per year and fifteen MATLAB licenses at $15k per year. Communication rental
expense for ground stations is estimated at $1M flat cost. Our analysis does not include
overhead costs associated with building rental, computer hardware, or miscellaneous
expenses.
We expect the overhead cost to be under-estimated. A company with fifteen engineers
designing components is meager. Although some engineers are “employed” through the
integration cost, the total overhead cost represents a bare-bones company. We used a
bare-bones approach for overhead cost in an attempt to make direct profit from the
GLXP.
Cash flow
Our analysis incorporates inflation at a rate of 3.8%, the average inflation of the U.S.
dollar in the past eight years. (Inflation Data) We assume a constant value for simplicity.
We purchase the Dnepr launch vehicle in late 2011. We assume an even distribution of
overhead cost over four years from 2009 until mission completion in 2012. Integration
and research and development costs are evenly distributed over three years from 2009
until launch in 2011. Figure X.X.X-X depicts the cash flow for the 100g mission. This
spreadsheet is available on the course website as CashFlow_100g.xlsx.
Author: Solomon Westerman
Mission Configuration – 100g Payload – Cost Analysis
Section A-5.8
Net operating loss:
$4.83M in 2009 dollars
Figure X.X.X-X, Cash Flow Diagram for the 100g Mission. Overhead, purchase, integration, research and
development, as well as launch costs are shown. The 100g mission’s net operating loss is $4.83M in
2009 dollars. (Solomon Westerman)
Author: Solomon Westerman