Lesson 3 of 6 · Development and operating costs
Estimate the mission beyond launch day
8 minute lesson · 3 checks along the way
Your goal for this lessonBuild a consistent life-cycle cost comparison and identify uncertainty.
In this lesson 3 sections · 3 checks
Using archive links & definitions
Words with a dotted underline open a short definition right here in the lesson.
Read & understand
Hardware is only part of the total
A mission can incur costs for concept studies, design, fabrication, testing, launch, ground systems, operations, analysis and closeout. Which items appear in a published total depends on its accounting boundary. A low quoted spacecraft price is not necessarily a low complete mission cost.
A life-cycle estimate connects costs to a technical description and schedule. If the scope changes, the estimate needs to change with it. A reserve is intended to address uncertainty within a defined plan; it should not be mistaken for proof that every possible future problem has already been priced exactly.
Check 1 of 3
10 pointsUse the reading above. You can try again without losing points.
Read & understand
Compare the same service over the same interval
Suppose fictional option A costs 60 units to develop and 8 per year to operate for five years. Its simplified total is 100 units. Option B costs 80 to develop and 3 per year for five years, totaling 95. The lower development price does not produce the lower five-year total in this example.
These classroom totals omit discounting, uncertainty and any costs not stated, such as launch or closeout. A real decision would need those boundaries made explicit. The arithmetic illustrates why a fair comparison must use the same duration, delivered capability and included cost categories.
Compare equal life-cycle boundaries
Original teaching diagram. Fictional option A. Development: 60. Five operating years: 5 × 8. Fictional option B. Development: 80. Five operating years: 5 × 3. Simplified totals: A = 100; B = 95. Unstated costs, discounting and uncertainty are excluded from this exercise.
Open full-size diagram in a new tab: Compare equal life-cycle boundariesCheck 2 of 3
10 pointsUse the reading above. You can try again without losing points.
Read & understand
Ask which assumptions drive the result
Schedule changes can affect staffing, facilities, storage and other costs. Technical uncertainty can alter the amount of redesign or testing required. examines how an estimate changes when important assumptions change; it is more informative than displaying many decimal places without a defensible basis.
A review should preserve the original baseline and explain later changes. A revised scope can make a simple before-and-after total misleading unless the capabilities are compared too. The useful question is not merely whether a number rose, but what changed, why it changed and how much uncertainty remains in the current estimate.
Check 3 of 3
10 pointsUse the reading above. You can try again without losing points.
Put it together
Your lesson progress
Each check connects to a part of the story. Complete all 3 to earn your 25-point lesson bonus.
Explore further · Optional
Go to the source
Explore the evidence behind this lesson. These optional readings and videos open in a new tab.
- Read: GAO: cost estimating and assessment guideCompare the explanation and its assumptions with the worked example in this lesson.
- Read: GAO: NASA major-project assessment, 2021Historical cost and schedule assessment; not a current project-status list.
- Read: NASA: program and project life cycleCompare the explanation and its assumptions with the worked example in this lesson.