07mitmiltry_ndco

07mitmiltry_ndco - Military and Commercial Cargo Mission...

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Military and Commercial Cargo Mission Needs Presentation to Massachusetts Institute of Technology Subject 16.886 Air Transportation System Architecting 2/26/04 Blaine K. Rawdon, Boeing Phantom Works
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Introduction The cargo world attempts to solve a very complex mission (problem) This presentation outlines the elements of the problem but does not define a specific mission I have been trying to understand this subject for a few years now – I may only be a few weeks ahead of you (if that)! This presentation is non-linear – Requires integration by the student after the fact… Military and commercial needs are similar in structure – Widely different values – Military values very dependent on situation
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General Problem Object of the game: Devise a goods creation and distribution system that creates greater value than it costs – Measure of merit varies Elements of the system include: – Creation of the goods (manufacturing, mining, farming) – Distribution –C
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General Solution Provides overall production/transport architecture to maximize an economic measure This optimization results in the need for global distribution of goods – System seeks a balance between production and transport costs: • Low-cost or expert labor • Mass production • Product type consolidation (cars in Detroit, movies in LA) • Farmland • Proximity to market • Good transport system access •E t c
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Transport Problem The problem pertains to the distribution of non-human objects (not electronic information) – Humans are “self-loading cargo” and are a special case not addressed here • Chief difference between people and cargo is that people’s time is generally much more valuable than cargo’s – Transoceanic transport: » Cargo: 99% ship, 1% air (by weight) » People: 1% ship, 99% air (approximately) – As a result, cargo systems are much different than passenger systems Addressing the transport problem in isolation from production, the object is to obtain the lowest total cost of transport
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Total Distribution Cost Object of logistics systems is to minimize Total Distribution Cost (TDC) TDC is the total cost of transporting goods – Sum of cost of transport and cost of holding inventory Cost of transport is fees paid to carriers (ship, truck, etc) Annual cost of inventory is typically a fraction of the value of the inventory – This fraction is called “Inventory Carrying Cost” • Typical fraction is 25%, but depends heavily on actual goods, timing – Diamonds have low ICC, food has high ICC • Consists of interest, depreciation, taxes, insurance, losses, warehouses
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Depreciation Depreciation is the most powerful and variable factor in ICC Depreciation refers to loss of potential value over time Depreciation may not be linear at all Seasonal variation If you get the air conditioners in one month late they may be on the shelves for 10
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07mitmiltry_ndco - Military and Commercial Cargo Mission...

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