Space economics measurement - A survey of space cost models

Abstract

How do cost models help in making economic decisions about space transportation vehicles? To what extent do cost models illuminate the cost impact of decisions due to management, technical, engineering and manufacturing, and cultural factors? What types of cost explanatory variables are used and what are their impacts? We shall first identify cost drivers across several space cost models: PRICE-H, SEER-H, TRANSCOST, and NAFCOM, and then classify them by using a management opportunity (for cost reduction) matrix. Second, we shall review cost explanatory variables for a vehicle structure, engine system, and process and technical parameters. Third, we will present a simple baseline, consisting of a launch vehicle structure and engine. Then we list each model's cost drivers, and root cost drivers and present the cost sensitivities graphically. Fourth, we will present the economic properties of the cost models which include economies of size, impact of schedule, learning curve and process improvement, and economic externalities (cost which are seen to be external, but are really internal to system cost). These external costs can be addressed and decreased by cooperative organization action at a level where the cost driver is seen to be endogenous to management action. The concluding section lists the most important cost drivers and comments on each cost model's strengths in addressing management/staff, technical, and process improvement types of cost drivers.