Costs occurring over time the life cycle cost

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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 logistics support, and pre-planned product 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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This document was uploaded on 02/26/2014 for the course E 515 at University of Louisiana at Lafayette.

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