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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Systems Product Line Model

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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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Backups

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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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Ship RDT&E Point Estimate

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Ship RDT&E Point Estimate

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Ship RDT&E Point Estimate

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Ship RDT&E Point Estimate

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Ship RDT&E Point Estimate

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Ship RDT&E Monte Carlo Risk Analysis

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Ship RDT&E Monte Carlo Risk Analysis

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Ship RDT&E Monte Carlo Risk Analysis

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System Maintenance

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System Maintenance

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Software Maintenance

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Total Ship Maintenance

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Acquisition and Maintenance

Monte Carlo Risk Results (1/3)

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Acquisition and Maintenance

Monte Carlo Risk Results (2/3)

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Acquisition and Maintenance

Monte Carlo Risk Results (3/3)

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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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Satellite RDT&E Point Estimate

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Software Cost Estimate Details

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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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