Alternative methods of cost analysis and their relevance for future space projects
- Paper ID
1974-IAF-001
- author
- company
Institute of Aeronautics and Astronautics, department of Transportation,Technical University Berlin
- country
Germany
- year
1974
- abstract
Alternative Methods of Cost Analysis and their Relevance for Future Space Projects H.H.Koelle, Technical University Berlin The paper tries to summarize past procedures and strategies on handling the cost problem in space programs. It is pointed out that the old methods will not suffice in a time period of scarce resources. The utility of space programs will have to be investigated to the same depth as the cost of such programs. In the first part of the paper a short survey is given on cost structures, costing methods and problems of costing in general4seen in the overall perspective of space programs. The following three costing methods are shortly described: (1) the method of educated guesses, (2)the method of statistical trend evaluation and (3) the PERT/ Cost method. The second part of the paper deals with valuation methods in some more detail. These valuation methods have to incorporate the cost aspect into the overall process of decisionmaking. Four methods are described particularly: (l) cost - benefit analysis, (2) cost effectiveness analysis, (3) worth analysis and (4) system simulation.The pros and cons of these methods are discussed, some space projects are listed for which these approaches seem to be useful. It is indicated that there is some reason to believe, that the next ten years will produce simulation methods for complex socio-economical-technical systems which should permit us to analyse the space program along with other programs of society on the national or global scale in its real world political environment• This appears to be the best way to develop a sound international space program of substance and viability. To attempt a reduction of the cost of space projects alone will not be satisfactory. The utility potential of those space projects will have to be proven with the same depth of analysis. For this very purpose we will have to concern ourselves with societal goals and the contribution the space program can make to them in a competitive world. Some procedures are pointed out which seem to be useful to accomplish this. Some practical examples are given. The paper concludes with a statement what ought to be done and lists some 20 references pertinent for this type of work.