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SPACE TECHNOLOGY & APPLICATIONS INTERNATIONAL FORUM (STAIF -98) Conference on Next Generation Launch Vehicles E5 - Cost & Operations. A NOVEL METHODOLOGY FOR ESTIMATING UPPER LIMITS OF MAJOR COST DRIVERS FOR PROFITABLE CONCEPTUAL LAUNCH SYSTEM ARCHITECTURES

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  1. 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.

  2. 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

  3. 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 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: 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

  4. 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)

  5. 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 !

  6. $1600/lb to orbit $400/lb to orbit $800/lb to orbit $200/lb to orbit 0 1B 2B 3B 4B 5B 6B 7B $100/lb to orbit • TOTAL ACQUISITION COST - $ BILLIONS • Sum of principal + simple interest = 0.5Pr+0.5In $50/lb to orbit 0 40 80 120 160 200 240 280 320 360 FLIGHTS /YEAR FIGURE 1c. Total Acquisition Cost @ 20 % & 5 year payback

  7. $1600/lb to orbit $800/lb to orbit $400/lb to orbit $200/lb to orbit $100/lb to orbit 0 8B 16B 24B 32B 40B 48B 56B • TOTAL ACQUISITION COST - $ BILLIONS • Sum of principal + simple interest = 0.33Pr+0.67In $50/lb to orbit FLIGHTS/YEAR FLIGHTS /DAY 0 200 400 600 800 1000 1200 1400 1600 1800 0 1 2 3 4 5 FIGURE 1d. Total Acquisition Cost @ 20 % 10 year payback

  8. $400/lb to orbit $800/lb to orbit $200/lb to orbit $100/lb to orbit $50/lb to orbit $1600/lb to orbit 0 2B 4B 6B 8B 10B 12B 14B • TOTAL ACQUISITION COST - $ BILLIONS • Sum of principal + simple interest = 0.33Pr+0.67In 0 40 80 120 160 200 240 280 320 360 FLIGHTS /YEAR FIGURE 1b. Total Acquisition Cost @ 20 % & 10 year payback

  9. $400/lb to orbit $800/lb to orbit $200/lb to orbit $100/lb to orbit $50/lb to orbit $1600/lb to orbit 0 2B 4B 6B 8B 10B 12B 14B • TOTAL ACQUISITION COST - $ BILLIONS • Sum of principal + simple interest = 0.5Pr+0.5In 0 40 80 120 160 200 240 280 320 360 FLIGHTS /YEAR FIGURE 1a. Total Acquisition Cost @ 10% & 10 year payback

  10. 500 1000 2000 4000 6,000 12,000 24,000 48000 $20,000/lb to orbit (Early 1990's Shuttle curve) $5,000/lb to orbit (Early 1990's KSC ops contractor curve) MANPOWER (HEADCOUNT) ANNUAL LABOR COST - $ MILLIONS $80/lbto orbit $40/lbto orbit $20/lbto orbit $10/lbto orbit $5/lbto orbit 24 47 94 188 375 750 1500 3K 1.95 3.9 7.8 15.6 31.2 62.5 125 250 0 40 80 120 160 200 240 280 320 360 FLIGHTS/YEAR FIGURE 2a. Recurring Labor Cost @ $ 40/hr average rate

  11. to orbit to orbit 25% or $50/lb 20% or $40/lb to orbit (Assumed Operations Cost @ $200/lb to orbit) 0 64 128 192 256 320 384 15% or $30/lb ANNUAL PROFIT- $ MILLION to orbit 10% or $20/lb 0 40 80 120 160 200 240 280 320 360 FLIGHTS/YEAR

  12. to orbit to orbit 25% or $200/lb 20% or $160/lb to orbit 0 256 512 768 1024 1280 1536 (Assumed Operations Cost @ $800/lb to orbit) 15% or $120/lb ANNUAL PROFIT- $ MILLION to orbit 10% or $80/lb 0 40 80 120 160 200 240 280 320 360 FLIGHTS/YEAR

  13. 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

  14. 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 • 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

  15. 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

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