16.885 Aircraft Systems Engineering Cost Analysis

1 Aircraft Systems Engineering cost Analysis Karen Willcox MIT. Aerospace Computational Design Laboratory AEROSPACE COMPUTATIONAL DESIGN LABORATORY. Outline Lifecycle cost Operating cost Development cost Manufacturing cost Revenue Valuation techniques AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Lifecycle cost Lifecycle : Design - Manufacture - Operation - Disposal Lifecycle cost : Total cost of program over lifecycle 85% of Total LCC is locked in by the end of preliminary design. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Impact on LCC (%). 0. 20. 40. 60. 80. 100. 9/19/2004. 65%. Conceptual design 85%. Preliminary design, 95%. system integration Lifecycle cost Detailed design Time Manufacturing and acquisition Operation and support Disposal (From Roskam, Figure ). AEROSPACE COMPUTATIONAL DESIGN LABORATORY. Operating cost Airplane Related Operating cost SROC.

2 10%. (AROC). CROC. Passenger Related Operating cost 2%. (PROC). PROC. Cargo Related Operating cost 18% AROC. (CROC) 70%. Systems Related Operating cost (SROC). AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Airplane Related Operating Costs CAPITAL COSTS: CASH AIRPLANE RELATED. Financing OPERATING COSTS: Insurance Capital Crew Depreciation Costs Fuel CAROC. Maintenance 40% 60% Landing Ground Handling GPE Depreciation GPE Maintenance Control & Communications CAROC is only 60% - ownership costs are significant! AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 CAROC Breakdown per Trip Other Control & Comm 3%. Ground Fuel is roughly 20% of Handling 9% 60% of 70% of Total 7% Operating cost Landing 6%. Crew 8%. 40%. Maintenance 15%. Fuel 20%. typical data for a large commercial jet AEROSPACE COMPUTATIONAL DESIGN LABORATORY.

3 9/19/2004 Non-Recurring cost cost incurred one time only: Engineering Engineering - airframe design/ Analysis - configuration control - Systems Engineering Tooling - design of tools and fixtures Tooling - fabrication of tools and fixtures Other - development support Other - flight testing AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Recurring cost cost incurred per unit: Labor - fabrication Labor - assembly - integration Material to manufacture - raw material Material - purchased outside production - purchased equipment Production support - QA. Support - production tooling support - Engineering support AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Learning Curve As more units are made, the recurring cost per unit decreases. This is the learning curve effect. Fabrication is done more quickly, less material is wasted.

4 N Yx Y0 x Yx = number of hours to produce unit x n = log b/log 2. b = learning curve factor (~80-100%). AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Learning Curve 1. Every time cost of unit production doubles, cost is reduced b= by a factor of 0. 0 10 20 30 40 50. Unit number Typical LC slopes: Fab 90%, Assembly 75%, Material 98%. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Elements of a cost Model Engineering Data Number of planes Build Schedule & Performance 120. 80. 40. 0. 2000 2010. Year 2020 2030. Recurring cost Component Breakdown Plane Wing Fuselage cost . Winglet Skin Ribs MODEL. RC/lb NRC/lb Weight Subparts/lb Non-Recurring Learning Curve NRC Distribution cost 1 2. cost of unit NRC ($B). 1. 0. 0 10 20 30 40 50. Unit number 0. 2003 2007 2011 2015. Year AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Typical cost Modeling 1.

5 Take empirical data from past programs. 2. Perform regression to get variation with selected parameters, cost vs. weight. 3. Apply judgment factors for your case. configuration factors, complexity factors, composite factors. There is widespread belief that Aircraft manufacturers do not know what it actually costs to turn out their current products. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 cost Modeling Aircraft is broken down into modules Inner wing, outer wing, . Modules are classified by type Wing, Empennage, Fuselage, . cost per pound specified for each module type Calibrated from existing cost models Modified by other factors Learning effects Commonality effects Assembly & Integration: a separate module . 2 cost categories: development & manufacturing Production run: a collection of modules AEROSPACE COMPUTATIONAL DESIGN LABORATORY.

6 9/19/2004 cost Modeling Plane Centerbody Wing Landing Propulsion Systems Payloads Final Gear Assembly At this level, the degree of detail can Winglet Outer Inner range from wing . Wing Wing to rivet . Identifier Weight Area RC per Subparts NRC per NRC time pound per pound pound distribution Labor Material & Support Tooling Engineering Other Equipment AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Development cost Data Baseline QA. Baseline Dev. Labs Baseline Baseline QA QA. Baseline Baseline Labs Labs non-dimensional labor hours Baseline Baseline ToolTool Fab. Fab Baseline Tool Fab. Baseline Baseline ToolTool Design Design Baseline Baseline Baseline Baseline . Engr. Engr. Baseline Tool Design Baseline Baseline Engr. non-dimensional time Boeing data for large commercial jet AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Development cost Model Cashflow profiles based on beta curve: c(t ) Kt D 1 (1 t ) E 1.

7 Typical development time ~6 years Learning effects captured span, cost Support Tool Fab normalized cost Tool Design ME. Engineering (from Markish) 0. normalized time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Development cost Model Payloads 8% Wing 20%. Systems 17%. Empennage 9%. Installed Engines 8%. Landing Gear 1%. Fuselage 37%. Representative non-recurring cost breakdown by parts for large commercial jet (from Markish). AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Development cost Data For your reference: $/lb assembled from public domain weight and total cost estimates plus representative NRC. breakdown by Aircraft part (see Markish). Tool Engineering ME Design Tool Fab Support Totals Wing $7,093 $1,773 $1,862 $6,171 $833 $17,731.

8 Empennage $20,862 $5,216 $5,476 $18,150 $2,451 $52,156. Fuselage $12,837 $3,209 $3,370 $11,169 $1,508 $32,093. Landing Gear $999 $250 $262 $869 $117 $2,499. Installed Engines $3,477 $869 $913 $3,025 $408 $8,691. Systems $13,723 $3,431 $3,602 $11,939 $1,612 $34,307. Payloads $4,305 $1,076 $1,130 $3,746 $506 $10,763. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Manufacturing cost Model Aircraft built modules required Modules database Records quantities, marginal costs Apply learning curve effect by module, not by Aircraft Labor Materials Support 85% 95% 95%. time AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Manufacturing cost Model Final Assembly 6%. Wing Payloads 27%. 11%. Systems 6%. Installed Engines 9%. Empennage Landing Gear 10%. 3%. Fuselage 28%. Representative recurring cost breakdown by parts for large commercial jet (from Markish).

9 AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Manufacturing cost Data For your reference: $/lb values assembled from public domain weight and total cost estimates plus representative RC breakdown by Aircraft part (see Markish). Labor Materials Other Total Wing $609 $204 $88 $900. Empennage $1,614 $484 $233 $2,331. Fuselage $679 $190 $98 $967. Landing Gear $107 $98 $16 $221. Installed Engines $248 $91 $36 $374. Systems $315 $91 $46 $452. Payloads $405 $100 $59 $564. Final Assembly $58 $4 $3 $65. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 NASA cost Models Online cost models available at Airframe cost Model - simple model for estimating the development and production costs of Aircraft airframes - based on military jet data - correlation with empty weight, max. speed, number of flight test vehicles, and production quantity AEROSPACE COMPUTATIONAL DESIGN LABORATORY.

10 9/19/2004 Revenue Model Revenue model must predict market price and demand quantity. 180. 90. 160. 80. 140 767-200ER A300. 70. 767-300ER. 120 A310. 777-200 60. price ($M). A330. deliveries 100 777-300. 50 A340. 747-400. 80 MD-11 40 747. A300. 767. 60 30. A330 777. 40 A340 20 MD-11. 10. 20. 0. 0. 1980 1985 1990 1995 2000. 1985 1990 1995 2000. year year Historical wide body data from Markish. No correlation found between price and quantity. AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Aircraft Pricing cost -Based Pricing Market-Based Pricing Performance cost + Profit = Price Operating cost Market Competition Value Passenger Appeal Personal Aircraft Commercial transport Business jets? Military Aircraft Source: Schaufele AEROSPACE COMPUTATIONAL DESIGN LABORATORY. 9/19/2004 Commercial Aircraft Pricing Total Airplane Related Operating Costs are fairly CAROC.