Post on 22-Mar-2018
NPS Total Ownership Cost Models
Raymond Madachy
Naval Postgraduate School
rjmadach@nps.edu
Systems Engineering Research Center
Annual Technical Research Review
March 19, 2014
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Objective
• Total Ownership Cost (TOC) modeling to enable
affordability tradeoffs with integrated software-hardware-
human factors
• Current shortfalls for ilities tradespace analysis– Models/tools are incomplete wrt/ TOC phases, activities, disciplines, SoS
aspects
– No integration with physical design space analysis tools, system modeling, or
each other
• New aspects– Integrated costing of systems, software, hardware and human factors across full
lifecycle operations
– Extensions and consolidations for DoD application domains
– Tool interoperability and tailorability (service-oriented)
• Can improve affordability-related decisions across all
joint services
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Approach
• Research and development
– Create new ensemble of cost models with DoD
stakeholders for broader coverage.
– Enable interoperability with other toolsets and
researchers (plug and play)
• Piloting and refinement
– Engage with DoD organizations to pilot the TOC
methods, process and tools (MPTs); then refine
them based on the results of the pilot applications
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Progress
• Extended models for breadth of engineering disciplines to include systems engineering, software engineering and hardware.
• Improved TOC capabilities by adding lifecycle maintenance models.
• Added Monte Carlo risk analysis for subset of cost parameters in integrated SE/SW/HW cost model.
• Initial extensions of general cost models for DoD system types starting with space systems and ships.
• Developed COQUALMO web service for tool interoperability.
• Successful piloting and follow-on extensions of product line model at NAVAIR.
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Plans (1/3)
Task 2
• Support piloting and refinement of TOC MPT
capabilities at NAVSEA, Army TACOM,
NAVAIR, SPAWAR and others with RT 113
team.
• Continue NPS ship case study for design and
cost tradeoffs with NAVSEA military students
integrating TOC models into a Model-Based
Systems Engineering (MBSE) dashboard for
Total Ship Systems Engineering (TSSE).
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Plans (2/3)
Task 2
• Collaborate on SysML-based cost modeling
for TOC (w/ USC and Georgia Tech)
• Integrate web-based costing services with
other frameworks and tools
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Plans (3/3)
Task 3
• Research and develop an ensemble of cost
estimation models covering the systems
engineering, development, production,
operations, sustainment, and retirement (w/
USC)
– Begin with space domain with USAF/SMC and the
Aerospace Corp., then extend into other DoD
domains
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Cost Modeling Across Domains
• Structuring canonical TOC tools to address multiple DoD domains
efficiently.
– Included phases, activities, cost sources depend on domain
• Cost model architecting is similar to product line engineering
– Identify multi-domain commonalities and variabilities (e.g. cost factors,
product structures, lifecycle phases, activities)
– Identify fully, partially sharable commonalities
– Develop model interfaces and extensions for variabilities
• Comparing MIL-STD 881 Work Breakdown Structures (WBS) to
find commonalities and variabilities across DoD domains, and
identify suggested improvements.
– Some domains have 1-n repeating system structures (e.g. spacecraft networks),
others are single system
– Example “Common Elements” include Systems Engineering and Management
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Product Line TOC Modeling
• Will extend models and tools to analyze TOC for a family of
systems. The value of investing in product-line flexibility using
Return-On-Investment (ROI) and TOC is assessed with
parametric models adapted from the Constructive Product Line
Investment Model (COPLIMO).
• Models are implemented in separate tools for 1) System-level
product line flexibility investment model and 2) Software product
line flexibility investment model. The detailed software model
includes schedule time with NPV calculations.
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Product Line Extension
• Multi-mission needs call for extension of the top-
level COPLIMO model to handle subsystems.
Immediate pilot applications include:
– Task 2: NAVAIR avionics software product line modeling
– Task 3: USAF/SMC spacecraft and ground systems cost model
development
• Each subsystem has respective cost factors and
product line characteristics including
– Fractions of system fully reusable, partially reusable and cost of
developing them for reuse
– Fraction of system variabilities and cost of development
– System lifetime and rates of change
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Extended Product Line Model
Systems
Product Line
Model
For Set of Products:
For each subsystem:
• Average Product Cost
• Annual Change Cost
• Ownership Time
• Percent Mission-
Unique, Adapted,
Reused
• Relative Cost of
Developing for PL
Flexibility via Reuse
• Relative Costs of
Reuse
As Functions of #
Products, # Years in
Life Cycle:
• PL Total
Ownership Costs
• PL Flexibility
Investment
• PL Savings (ROI)
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SysML Integration
• Can deconstruct existing SysML models for
DoD systems to enumerate cost model size
inputs, and develop methods for automating
the conversions.
– Counting and weighting requirements, interfaces,
algorithms, scenarios and software size as inputs to
SysML internal cost calculations.
• Support SysML encoding of additional
parametric cost models.
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Total Ownership Cost vs. Lifecycle Cost
• Total Ownership Cost (TOC) is the total cost of
acquisition, development and operating costs.
– All direct and indirect costs of a product, product line, system,
project or program.
• Life-cycle cost consists of research and development costs, investment costs, operating and support costs, and disposal costs over the duration of a program.
• Total ownership cost is broader in scope. It includes the elements of life-cycle cost, as well as other infrastructure or business process costs not normally attributed to a program.
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Ship Total Ownership Cost
TOTAL OWNERSHIP COST
SAILAWAY COST
ACQUISITION COST
LIFE CYCLE COST
• Contractor Project
Management
• Hardware (e.g.
Structure, Propulsion,
Electric Plant)
• Start Up (e.g. Tooling,
Jigs, Fixtures)
• Engineering Change
Orders
• Tests and Trials
• Initial Outfitting
(Onboard Spares,
Repair Parts, Tools
and Fuel)
PLUS
• Design
• Development
• Software
• Technical Data
• Publications
• Support Equipment
• Training Equipment
• Initial Spares (Shore
based)
• Facility Construction
• Government Project
Management
PLUS
• Operations
and Support
• Disposal
PLUS
• Common
Support
System Costs
• Infrastructure
Cost for
Planning,
Managing,
Operating and
Executing
• Linked Indirect
Costs
• Modifications
and Upgrades
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Where?
• General cost modeling tool currently available at
http://diana.nps.edu/~madachy/tools/cost_model_suite.php
http://csse.usc.edu/tools/cost_model_suite.php
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AMCM Overview
• The Advance Missions Cost Model (AMCM)
predicts development, recurring and mission
operations costs of ground vehicles, ships, aircraft,
helicopters, missiles, launch vehicles, spacecraft, and
human explorations missions.
• It is a system level cost model appropriate for large
scale programs requiring many different systems that
will be integrated to perform a complex mission. The
model is most useful in the pre-conceptual and
conceptual design phases of a program when the
actual design of the systems is not known and many
factors are being traded off. 35
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AMCM Description
• The AMCM is a two equation, multi-variable cost estimating
relationship. The first equation predicts the development and
production cost of the system based of various technical and
programmatic factors. The second equation predicts the basic
mission operations cost of the system.
• Both equations are fitted to a large historical database that
spans 50 years of systems development. Most of the systems
are US Government developed, but some commercial and
European systems are included.
– Database of land, water, air and space systems. The data includes 54
spacecraft, 22 space transportation systems, 61 aircraft, 86 missiles, 29
ships, and 18 ground vehicles. All of the data points are from programs
that were completed through IOC.
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