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Unformatted text preview: ime. System life-cycle cost should be
estimated and used in the evaluation of alternatives
during trade studies. The system engineer should
include in the NASA Systems Engineering Handbook
Systems Analysis and Modeling Issues life-cycle cost those resources, like civil service workyears, that may not require explicit project
expenditures. A system's life-cycle cost, when properly
computed, is the best measure of its cost to NASA.
Life-cycle cost has several components, as
shown in Figure 25. Applying the informal definition
above, life-cycle cost consists of (a) the costs of
acquiring a usable system, (b) the costs of operating
and supporting it over its useful life, and (c) the cost of
disposing of it at the end of its useful life. The system
acquisition cost includes more than the DDT&E and
procurement of the hardware and software; it also
includes the other start-up costs resulting from the
need for initial training of personnel, initial spares, the
system's technical documentation, support equipment,
facilities, and any launch services needed to place the
system at its intended operational site.
The costs of operating and supporting the
system include, but are not limited to, operations
personnel and supporting activities, ongoing integrated
improvement. For a major system, these costs are
often substantial on an annual basis, and when
accumulated over years of operations can constitute
the majority of life -cycle cost.
At the start of the project life cycle, all of these
costs lie in the future. At any point in the project life
cycle, some costs will have been expended. These expended resources are known as sunk costs. For the
purpose of doing trade studies, the sunk costs of any
alternative under consideration are irrelevant, no
matter how large. The only costs relevant to current
design trades are those that lie in the future. The logic
is straightforward: the way resources were spent in the
past cannot be changed. Only decisions regardi...
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