Valuing Flexibility in the Face of Uncertainty:
This presentation is the property of its rightful owner.
Sponsored Links
1 / 33

ESD.71 – Engineering System Analysis for Design December 9, 2008 Abe Grindle PowerPoint PPT Presentation


  • 43 Views
  • Uploaded on
  • Presentation posted in: General

Valuing Flexibility in the Face of Uncertainty: Deploying RFID-wired Cargo Bags on the International Space Station, 2009-2016. ESD.71 – Engineering System Analysis for Design December 9, 2008 Abe Grindle. Aurora Flight Sciences / Payload Systems Division. Outline. Background & Motivation

Download Presentation

ESD.71 – Engineering System Analysis for Design December 9, 2008 Abe Grindle

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Esd 71 engineering system analysis for design december 9 2008 abe grindle

Valuing Flexibility in the Face of Uncertainty:Deploying RFID-wired Cargo Bags on the International Space Station, 2009-2016

ESD.71 – Engineering System Analysis for Design

December 9, 2008

Abe Grindle

Aurora Flight Sciences / Payload Systems Division


Outline

Outline

  • Background & Motivation

  • Previous Work

  • Current Objectives

  • System Description & Definitions

  • Assumptions

  • Decision Tree Analysis

  • Lattice Analysis

  • Conclusions


Background iss inventory architecture

Background: ISS Inventory Architecture

  • Barcodes + manual barcode scanner

  • CTBs (Cargo Transfer Bags) and other bags/kits

    • 1/2, Standard, Double, Triple

    • Concentration of Inventory Transactions

  • IMS (Inventory Management System)

    • Software database of all inventory information

    • Copies in Houston, Moscow, Baikanour, and ISS

    • Delta files

  • Proposed: RFID Systems in CTBs

    • Antennas, Readers, Battery & Wi-Fi in CTBs

    • Gen II passive RFID tags on all items

Aurora Flight Sciences / Payload Systems Division


Motivation automate the iss inventory process

Motivation: Automate the ISS Inventory Process

@ ISS Assembly Complete:

  • 600 Cargo Transfer Bags (CTBs) on-orbit

  • 730 Crew Hours / Year spent updating IMS ~ 4 ½ person-months (40 hrs/wk)

    Questions:

  • Could we save some of this time with a CTB-based RFID inventory system?

  • Would this provide net value?

Image Credits: NASA / Rule-Based Analytic Asset Management for Space Exploration Systems (RAMSES) STTR Phase I Final Report (de Weck, et al. 2007)

Aurora Flight Sciences / Payload Systems Division


Previous work

Previous Work

  • January 2008

    • Study of ISS Logistics & Inventory Processes

  • Spring 2008

    • Development of Cost Model to evaluate Expected Net Present Value (ENPV) of RAMSES RFID System

    • Hardware Prototype development

    • Analysis of ENPV given hardware & performance uncertainties (single v. inflexible phased deployment)

Aurora Flight Sciences / Payload Systems Division


Objective of this study

Objective of this Study

  • Evaluate: RFID deployment strategies in the context of uncertain demand, system performance, and lifetime.

    • Fixed deployment:

      • all RFID systems launched in 2009

    • Flexible:

      • Some RFID systems launched in 2009

      • Option to launch additional systems in 2012

Aurora Flight Sciences / Payload Systems Division


System description definitions

System Description & Definitions

CTB

Deployed RFID Systems = “Wired” CTBs

Inventory Transactions = “Demand”

“Captured” Demand

Aurora Flight Sciences / Payload Systems Division


Esd 71 engineering system analysis for design december 9 2008 abe grindle

Concentration of Demand

Uniform Demand

25% RFID Deployment captures

25% (2/8) of “Demand”

25% RFID Deployment

captures

37.5% (3/8) of “Demand”

25% RFID Deployment

captures

50% (4/8) of “Demand”


Assumptions

Assumptions

  • Initial deployment of RFID systems occur in 2009

  • Benefits do not begin to accrue until 1 year after decision to deploy

  • ISS will have crew of 6 at start of 2010

  • “Planned” ISS retirement (for US) in 2016

Aurora Flight Sciences / Payload Systems Division


Decision tree analysis

Decision Tree Analysis

  • Fixed Strategy:

    • 2009 RFID Deployment = 33.3%of ISS CTBs

  • Flexible (Incremental) Strategy:

    • 2009 RFID Deployment = 16.7% of ISS CTBs

    • 2012 Option = +16.7%(for total of 33.3% of ISS CTBs)

  • 2 Elements of Uncertainty (Chance Nodes):

    • Is there Concentration of Demand?

    • When will the ISS actually be retired?

Aurora Flight Sciences / Payload Systems Division


Esd 71 engineering system analysis for design december 9 2008 abe grindle

EPV = $(21.16) M

EOL = 2020

Est. Prob. = 0.1

C

EOL = 2018

EPV = $(26.78) M

ISS End Of Life (EOL) = 2020

EOL = 2016

EPV = $(33.22) M

EOL = 2018

Expand Deployment (to 33.3%)

Est. Prob. = 0.2

EOL = 2014

EPV = $(40.59) M

EPV = $(31.46) M

D

EOL = 2016

Est. Prob. = 0.6

EPV = $(11.71) M

EOL = 2020

EOL = 2018

C

EPV = $(14.32) M

EOL = 2014

Maintain 16.7% Deployment

Est. Prob. = 0.1

EOL = 2016

EPV = $(17.32) M

EPV = $(16.50) M

EOL = 2014

EPV = $(20.74) M

8.33% Demand Captured

Est. Prob. = 0.1

EPV = $16.68 M

EOL = 2020

Flexible Delayed Deployment Strategy (100 CTBs ~ 16.7%)

EOL = 2018

C

EPV = $5.04 M

EOL = 2016

EPV = $(8.28) M

Expand Deployment (to 33.3%)

EOL = 2014

EPV = $(23.54) M

EPV = $(4.65) M

16.7% Demand Captured

D

C

EPV = $11.22 M

EOL = 2020

Est. Prob. = 0.3

EOL = 2018

C

EPV = $5.60 M

EPV = $11.93 M

Maintain 16.7% Deployment

EOL = 2016

EPV = $(0.83) M

EPV = $0.92 M

EOL = 2014

EPV = $(8.20) M

25% Demand Captured

Est. Prob. = 0.6

D

EPV = $54.51 M

EOL = 2020

EOL = 2018

C

EPV = $36.86 M

Expand Deployment (to 33.3%)

EOL = 2016

D

EPV = $16.65 M

EPV = $22.17 M

EOL = 2014

EPV = $(6.48) M

Fixed Up-Front Deployment Strategy (200 CTBs ~ 33.3%)

EPV = $34.15 M

EOL = 2020

Maintain 16.7% Deployment

EOL = 2018

C

EPV = $25.52 M

EPV = $18.34 M

EOL = 2016

EPV = $15.65 M

EOL = 2014

EPV = $4.33 M

EPV = $12.30 M

EPV = $(18.62) M

EOL = 2020

Maintain 33.3% Deployment

EOL = 2018

D

C

EPV = $(24.24) M

16.7% Demand Captured

EOL = 2016

EPV = $(30.68) M

EPV = $(28.92) M

EOL = 2014

Est. Prob. = 0.1

EPV = $(38.04) M

C

33.3% Demand Captured

EPV = $27.24 M

EOL = 2020

Maintain 33.3% Deployment

D

C

EOL = 2018

Est. Prob. = 0.3

EPV = $15.61 M

EOL = 2016

EPV = $5.92 M

EPV = $2.29 M

EOL = 2014

EPV = $(12.97) M

50% Demand Captured

Est. Prob. = 0.6

EPV = $73.11 M

EOL = 2020

Maintain 33.3% Deployment

EOL = 2018

D

C

EPV = $55.46 M

EOL = 2016

EPV = $22.36 M

EPV = $35.25 M

EOL = 2014

EPV = $12.11 M

2009

2012

2014-2020


Decision tree analysis1

Decision Tree Analysis

Aurora Flight Sciences / Payload Systems Division


Decision tree analysis2

Decision Tree Analysis

  • Results:

    • Fixed Strategy has larger ENPV than Flexible, as considered here

  • Why?

    • Large Capex required (launch & installation costs)

    • Low recurring cost, High recurring benefits

Aurora Flight Sciences / Payload Systems Division


Decision tree analysis3

Decision Tree Analysis

Aurora Flight Sciences / Payload Systems Division


Lattice analysis

Lattice Analysis

  • Fixed Strategy:

    • 2009 RFID Deployment = 25%of ISS CTBs

  • Flexible (Incremental) Strategy:

    • 2009 RFID Deployment = 25% of ISS CTBs

    • 2012 Option = +10%(for total of 35% of ISS CTBs)

  • Uncertainty:

    • How much time will a given deployment save the crew?

      • Current schedule = 20 min / day / crewmember for Inventory

Aurora Flight Sciences / Payload Systems Division


Lattice analysis1

Lattice Analysis

  • Growth Rate = 10% (over 6 yrs) Volatility = 20% (over 6 yrs)

    • Somewhat arbitrary; account for learning effects & uncertainties

  • Probability of Increase = ~ 60%Prob. of Decrease = ~ 40%

  • Upside Factor = ~ 1.09Downside Factor = ~ 0.92

  • Initial Value = 14.40 minutes

    • Corresponds to 25% RFID deployment, uniform distribution of transactions, crew of 6, manual inventory time of 20 min/day/crew

Aurora Flight Sciences / Payload Systems Division


Lattice analysis2

Lattice Analysis

Aurora Flight Sciences / Payload Systems Division


Lattice analysis3

Lattice Analysis

Aurora Flight Sciences / Payload Systems Division


Lattice analysis4

Lattice Analysis

Aurora Flight Sciences / Payload Systems Division


Lattice analysis dynamic programming not inc capex

Lattice Analysis: Dynamic Programming (not inc. Capex)

25% Fixed

35% Fixed

25% + 10% Flexible

Aurora Flight Sciences / Payload Systems Division


Lattice analysis effects of capex

Lattice Analysis: Effects of Capex

Aurora Flight Sciences / Payload Systems Division


Lattice analysis conclusions

Lattice Analysis: Conclusions

  • Results:

    • Flexible strategy has slightly larger ENPV than baseline fixed deployment (25% in 2009), but only when Capex is not included.

    • With Capex, flexible option is a net loss in value.

    • Expanded initial fixed deployment (35% in 2009) is better than either.

  • Why?

    • Large Capex required (launch & installation costs)

    • Low recurring cost, High recurring benefits

Aurora Flight Sciences / Payload Systems Division


Thank you

Thank you!

Questions?

Aurora Flight Sciences / Payload Systems Division


Back up slides

Back-up Slides

Aurora Flight Sciences / Payload Systems Division


Esd 71 engineering system analysis for design december 9 2008 abe grindle

Inventory Transactions (“Demand”) are uniformly distributed between 100% of CTBs

Concentration of Demand: 75% (6/8) of Transactions occur in 50% of the CTBs

Concentration of Demand: 50% (4/8) of Transactions occur in 25% of the CTBs


Esd 71 engineering system analysis for design december 9 2008 abe grindle

25% of CTBs “Wired”

with RFID Systems

50% of CTBs “Wired”

with RFID Systems

75% of CTBs “Wired”

with RFID Systems

Percent (%) Deployment


Esd 71 engineering system analysis for design december 9 2008 abe grindle

25% RFID Deployment

captures

25% (2/8) of “Demand”

50% RFID Deployment

captures

75% (6/8) of “Demand”

75% RFID Deployment

captures

87.5% (7/8) of “Demand”


Costs considered

Costs Considered

  • NASA Engineer Time for:

    • Flight Certification & Approval

    • Operational Support & Maintenance

  • Cost for Vendor to Modify CTBs or Cost to Build Mod-Kits

  • Cost of RFID Hardware

  • “Opportunity Cost” of:

    • Launching the System Mass

    • Launching the System Volume

    • Crew Time to Transfer Items to Wired Bags or Install Mod Kits

Aurora Flight Sciences / Payload Systems Division


Benefits considered

Benefits Considered

  • Value of Crew Time Saved on:

    • Bi-annual Inventory Audits

    • Missing Item Searches

    • Daily Inventory Management System Updates

  • Reduced workload for JSC Inventory Stowage Officers (ISOs)

    • Less need to assist Crew with Inventory updates/searches

  • Only Partial Savings realized, per “System Effectiveness” (β) parameter:

    β = (% of Inventory Transactions ‘Automate-able’) x (System Accuracy)

Aurora Flight Sciences / Payload Systems Division


Quantifying value opportunity cost of cargo launch volume mass

Quantifying Value (“Opportunity Cost”) of Cargo Launch Volume & Mass

  • Value of Cargo Launch Volume =

    [Annual Net Variable Recurring Cost (all Cargo Missions)]

    [Annual Net Dry Cargo Launch Volume Available (habitable)]

    = ~ $20.3 million / m^3 (‘09-’10), ~ $31.6 million / m^3 (‘10-’16)

  • Value of Cargo Launch Mass =

    [Annual Net Variable Recurring Cost (all Cargo Missions)]

    [Annual Net Cargo Launch Mass Available]

    = ~ $25,500 / lb (‘09-’10), ~ $35,700 / lb (‘10-’16)

Aurora Flight Sciences / Payload Systems Division


Quantifying value of on orbit crew time

Quantifying Value of On-Orbit Crew Time

  • Value of 1 Hour of On-Orbit Crew Time =

    [Average Annual ISS Ops Budget (Common Systems Operations Cost)]

    [# Crew] x [# “Active” Hours per day / Crew Member] x [365 days/yr]

    = ~ $185K / hr (’09) # Crew = 3, Each active 16 hrs/day

    = ~ $ 100K / hr (’10-’16) # Crew = 6, Each active 16 hrs/day

  • Notes:

    • Common Systems Operations (CSO) Cost is defined as “the cost to operate the ISS”, including “the cost to transport crew and common supplies” and “ground operations costs” [9]

    • International Partners’ negotiated shares of CSO Costs [10]:

      NASA = 76.6%; JAXA = 12.8%; ESA = 8.3%; CSA = 2.3% || RSA = Russian Segment & Crew Ops Costs

Aurora Flight Sciences / Payload Systems Division


Conclusions

Conclusions

  • If inventory transactions are concentrated in some subset of CTBs, and part or all of that subset can be targeted for RAMSES installation, this application of RAMSES is quite likely to result in positive Net Present Value.

    • Such concentration has been reported by JSC ISOs, but not quantified. Intuitively, it makes sense - some desk drawers get almost all the use.

  • Cost drivers:System Volume, Mass, & Crew Time required to install.

  • Key Benefit: Saving part of 20 min/day each Crew Member spends updating IMS (total = 730 hours/yr) . System Effectiveness (β) parameter is critical.

  • As with any Cost/Benefit Analysis, results are limited – can provide guidance, but not absolute truth. Assumptions and unknowns are important.

Aurora Flight Sciences / Payload Systems Division


Unresolved issues future work

Unresolved Issues / Future Work

  • Common Systems Operations Costs

    • Likely to be larger than currently calculated (baseline uses Proposed NASA FY 2009 ISS Ops Budget as reference, but this does not include launch costs)

       Would increase likelihood & magnitude of NPV (increase value of Crew Time)

    • Russian Ops Costs unknown; likely to be larger as well? Same impact.

  • Dry Cargo Volume Capacity of Launch Vehicles

    • Only “habitable volume” is consistently available; overestimates cargo space.

       Would decrease likelihood & magnitude of NPV (increase cost of cargo volume)

  • Benefits of Enhanced Safety and Mission Assurance are not included in this analysis

  • Cost of integrating RAMSES with existing IMS not included (technical & political)

Aurora Flight Sciences / Payload Systems Division


  • Login