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MIT
Cost Engineering in Axiomatic Design
2.882 May 2nd, 2005
MIT
Cost: What’s the problem?
• “Cost nightmare”• The Big Dig
• $2.6B (1982) to $14.6B (2004)
• Ingalls Shipbuilding Co.• Continuous design change, required
by the Navy• $2.7B unsettled claim U
SS
Pel
eliu
Bos
ton’
s B
ig D
ig
Photo removed for copyright reasons.
Photo removed for copyright reasons.
MIT
Freiman Curve
0
Fina
l Pro
gram
Cos
t
0
Estimated Cost
10
1 = Underestimates lead to disaster
1 2 3
2 = Realistic estimatesminimize final costs
3 = Overestimates becomeself-fulfilling prophecies
The Freeman Curve
20
10
20
Figure by MIT OCW. Adapted from Freiman, F. R. “The Fast Cost Estimating Models.” AACE Transactions (1983).
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• Fail to address:• Credible cost estimation• Cost drivers• Cost management• Schedule risk
WHY does a system cost how much?
TRACEABILITY
• We need …• Systematic approach• Better utilization of cost
data
MIT
Goals & Approaches
• Goals• Enhance the credibility of life cycle cost estimation • Quickly predict the cost impact of engineering changes to
the system• Identify key cost drivers to guide the cost reduction effort
• Approaches• Develop a general method for integrating cost information
into the system architecture• Development, Production, Operation phase
• Develop a method to predict the cost of system changes• Requirement changes, Solutions changes
• Integrate the method into a usable tool for designers/ engineers
Value
•• Cost CredibilityCost Credibility•• Cost information is tied to system design information viaCost information is tied to system design information via
Axiomatic Design (AD) frameworkAxiomatic Design (AD) framework•••• Unified framework for cost estimation at different stages ofUnified framework for cost estimation at different stages of
system design by constructing a hierarchical structuresystem design by constructing a hierarchical structure
•• Capability to Assess the Cost Impact of ChangesCapability to Assess the Cost Impact of Changes•• Ramification of changes in a requirement and/or designRamification of changes in a requirement and/or design
solution is captured by AD frameworksolution is captured by AD framework•• The estimate of cost impact is quickly generated to supportThe estimate of cost impact is quickly generated to supportTraceability
decision making processdecision making process•• Key cost drivers can be identifiedKey cost drivers can be identified
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Scope of cost estimation becomes apparentScope of cost estimation becomes apparentCompleteness, Visibility
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Detailedsystem
Integrate physical entities(Bottom -up)
Establishinterfaces
Construct localassemblies
Satisfy systemmorphology
Identify physical components
Detailedsystem
Integrate physical entities(Bottom -up)
Establishinterfaces
Construct localassemblies
Satisfy systemmorphology
Identify physical components
CREDIBLE COST ASSESSMENT
• Estimate the Systems Physical Solutions
• Technical Scope Defined is the Scope Estimated
System Design & Development
CustomerNeeds
Define FRs
Map toDPs
DefineModules
Build FR -DP hierarchy(Top-down)
Decompose
CustomerNeeds
Define FRs
Map toDPs
DefineModules
Build FR -DP hierarchy(Top-down)
Mapping DPs into physical entities
Decompose
TECHNICAL CREDIBILITY
System changes are assessed
• NASA Requirements (Level 1 & 2)
• Identifies Lowest Level Requirements
& Interactions
MIT
Software Tool to Aid the Process
Courtesy of Axiomatic Design Solutions, Inc. Used with permission.
MIT
Software Tool Demonstration SDCM Development Module
DP1.3.1 is Evaluated for Change
Nature of a ‘change’is further specified
% completion(hr)
50%Baseline Cost
Adjusted Cost
Time when the change is introduced(User selects this point)
Simulation input (change, project phase), Result (cost impact), and Details are summarized
Courtesy of Axiomatic Design Solutions, Inc. Used with permission.
MIT
Development Module Model Structure
Functional Design Change
Affected Design Parameters Identified
Axiomatic Design Framework
Cost Domain
Linking Functional and Costing Domains
Input
Output
Comment
FR1
FR11 FR12
FR111 FR112 FR121 FR122
FR1111 FR1112 FR1211 FR1212
:
FR1
FR11 FR12
FR111 FR112 FR121 FR122
FR1111 FR1112 FR1211 FR1212
:
DP1
DP11 DP12
DP111 DP112 DP121 DP122
DP1111 DP1112 DP1211 DP1212
:
DP1
DP11 DP12
DP111 DP112 DP121 DP122
DP1111 DP1112 DP1211 DP1212
:
Functional Domain
PhysicalDomain
CU1, $
CU2, $
CU11, $
CU21, $
CU12, $
CU13, $
CU22, $
:
CostDomain
Con
cept
ually
Des
ign
Ass
embl
e
Tes
t
Des
ign
Tool
ing
Fabr
icat
ion
Tes
t
Inst
alla
tion
Des
ign
Tool
ing
Fabr
icat
ion
Tes
t
Inst
alla
tion
Des
ign
Tool
ing
Fabr
icat
ion
Tes
t
Inst
alla
tion
Des
ign
Tool
ing
Fabr
icat
ion
Tes
t
Inst
alla
tion
u0, W
ork
Vect
or (
hour
s)
Conceptually Design 400Assemble 40Test 100
Design 0.05 0.10 0.10 0.10 0.50 0.10 150Tooling 0.50 0.20 0.10 150Fabrication 0.50 0.10 75Test 0.70 0.40 20Installation 0.80 0.80 10
Design 0.05 0.10 0.10 0.10 0.50 0.10 150Tooling 0.50 0.20 0.10 150Fabrication 0.50 0.10 75Test 0.70 0.40 20Installation 0.80 0.80 10
Design 0.05 0.10 0.10 0.10 0.50 0.10 150Tooling 0.50 0.20 0.10 150Fabrication 0.50 0.10 75Test 0.70 0.40 20Installation 0.80 0.80 10
Design 0.05 0.10 0.10 0.10 0.50 0.10 150Tooling 0.50 0.20 0.10 150Fabrication 0.50 0.10 75Test 0.70 0.40 20Installation 0.80 0.80 10
CU0: Thermal Protection
System CU1: Body Winward CU2: Wing Winward CU3: Nose TPS CU4: Insulation
Process Matrix
CU
0:
Ther
mal
P
rote
cti
on
Syst
emC
U1:
Bod
y W
inw
ard
CU
2: W
ing
Win
war
dC
U3:
Nos
e TP
SC
U4:
In
sula
tion
TaskModel
Task/Process model
MIT
Development Module Model Structure
k
2
1
CU............CUCU
test
nfabricatiotooling
analysis performdesign
.....
.....
test
codedesign
testfabricate
toolingdesign
Affected Components
Identify affected physical interfaces between components
Tasks Required to Implement Changes
--$--$--$--$--$
.....
.....
--$--$--$
--$--$--$--$
Cost Required to Implement Changes
Iterative Model Determines Time to Complete the Changes
Input
Output
Comment
MIT
Iteration model
0.3Task B
0.5Task A
Task BTask A
Work Transformation Matrix
1−⋅= nn uWTu
( )0
2
000
10
)1( uWTWTWT
uWTWTuWTu
uuuU
N
N
⋅++++=
⋅⋅+⋅+=++=
L
L
L
% completion(hr)
Time (iteration step)
Work completion curvefor the original design
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Cost Impact of Change
% completion(hr)
50%
Remaining work for original design, X
User selects this point
Cost penalty = Y - X
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Summary
FR1
FR11 FR12
FR111 FR112 FR121 FR122
FR1111 FR1112 FR1211 FR1212
:
FR1
FR11 FR12
FR111 FR112 FR121 FR122
FR1111 FR1112 FR1211 FR1212
:
DP1
DP11 DP12
DP111 DP112 DP121 DP122
DP1111 DP1112 DP1211 DP1212
:
DP1
DP11 DP12
DP111 DP112 DP121 DP122
DP1111 DP1112 DP1211 DP1212
:
Functional Domain
PhysicalDomain
CU1, $
CU2, $
CU11, $
CU21, $
CU12, $
CU13, $
CU22, $
:
CostDomain
Con
cept
ually
Des
ign
Ass
embl
e
Test
Des
ign
Tool
ing
Fabr
icat
ion
Test
Inst
alla
tion
Des
ign
Tool
ing
Fabr
icat
ion
Test
Inst
alla
tion
Des
ign
Tool
ing
Fabr
icat
ion
Test
Inst
alla
tion
Des
ign
Tool
ing
Fabr
icat
ion
Test
Inst
alla
tion
u0,
Wor
k Ve
ctor
(ho
urs)
Conceptually Design 400
Assemble 40Test 100
Design 0.05 0.10 0.10 0.10 0.50 0.10 150
Tooling 0.50 0.20 0.10 150
Fabrication 0.50 0.10 75
Test 0.70 0.40 20Installation 0.80 0.80 10
Design 0.05 0.10 0.10 0.10 0.50 0.10 150
Tooling 0.50 0.20 0.10 150Fabrication 0.50 0.10 75
Test 0.70 0.40 20
Installation 0.80 0.80 10
Design 0.05 0.10 0.10 0.10 0.50 0.10 150Tooling 0.50 0.20 0.10 150
Fabrication 0.50 0.10 75
Test 0.70 0.40 20Installation 0.80 0.80 10
Design 0.05 0.10 0.10 0.10 0.50 0.10 150
Tooling 0.50 0.20 0.10 150Fabrication 0.50 0.10 75Test 0.70 0.40 20Installation 0.80 0.80 10
CU0: Thermal Protection
System CU1: Body Winward CU2: Wing Winward CU3: Nose TPS CU4: Insulation
Process Matrix
CU
0:
Ther
mal
Pr
otec
tion
S
yste
mC
U1:
Bod
y W
inw
ard
CU
2: W
ing
Win
war
dC
U3:
Nos
e TP
SC
U4:
In
sula
tion
TaskModel
Complete Traceability from Design to Cost Information
MIT
Steps
1. Identify affected DP’s from FR change2. Identify CU’ corresponding to DP’s3. Identify CU’’ from CU’4. Estimate % rework input5. Estimate total change-workload