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Cost effectiveness for maintainable products
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Cost effectiveness for maintainable products

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  • 1. (Number Of Missions) x AO x RCost Effectiveness (CE) CE = LCCFor Maintainable Products = Successful Missions / $ Effectiveness is defined as a figure-of-merit judging the opportunity for producing the R = Mission Reliability intended results MTBF = Mean Time Between Failures MTTR = Mean Time To Repair MDT = Mean Down Time LCC = Life Cycle Cost AO = Operational Availability R Cost Effectiveness (CS) Analysis Availability Analysis AO MTTR $ Reliability Maintainability Supportability MDT Analysis MTBF Analysis Analysis LCC Analysishttp://www.linkedin.com/in/hilairepereraHilaire Ananda PereraLong Term Quality Assurance
  • 2. Parameters Related To Cost Effectiveness (CE) Reliability (R) β T .Γ 1 1 MTBF β R e T = Misson Time MTBF = Mean Time Between Failure β = Weibull Shape Parameter β = 1 for Exponential Distribution Operational Availability (AO) MTBF AO = MTBF + MDT MDT = MADT + MLDT + MTTR MADT = Mean Administrative Delay Time MLDT = Mean Logistic Delay Time MTTR = Mean Time To Repair Life Cycle Cost (LCC) LCC = CD + CI + COS CD = Development Cost CI = Investment Cost (Recurring and Non-Recurring) COS = Operating and Support Costhttp://www.linkedin.com/in/hilairepereraHilaire Ananda PereraLong Term Quality Assurance
  • 3. Description of Parameters Related To Cost EffectivenessReliability: Reliable equipment has a high probability of performing its requiredfunction without failure for a stated period of time when subjected to specifiedoperational conditions of use and environment. At the conceptual stage, the reliabilityrequirements should be considered at the same time as the performance parameters. Theoperational use and environment, therefore, need to be taken into account at the outset ofthe design process. The design should also be robust to expected variations in productionprocesses and quality of materials and components. Reliability is better described by theWeibull distribution than the exponential. An advantage of the Weibull distribution isthat it represents a whole family of curves, which, depending on the choice of β, canrepresent many other distributions. Γ (1 + 1/β ) is the Euler Gamma Function evaluatedat the value of (1 + 1/β )Operational Availability: Operational Availability is a measure of the averageavailability over a period of time and it includes all experienced sources of downtime,such as administrative downtime, logistic downtime, etc. It reflects the real-worldoperating environment, thereby making it the preferred and most readily available metricfor assuring quantitative performance. The operational availability is the availability thatthe customer actually experiences. It is essentially a posteriori availability based on actualevents that happened to the system. In many cases, operational availability cannot becontrolled by the manufacturer due to variation in location, resources and other factorsthat are the sole province of the end user of the product.Life Cycle Cost: Life Cycle Cost analysis should proceed concurrently with andcomplement other design analysis activities. Since engineers or design specialists havethe primary role in evolving the final design, they can most effectively take the lead inperforming beneficial life cycle cost design trade studies. The design-to-cost (DTC)concept is a key factor in a program’s life cycle cost management efforts. DTC is amanagement concept that is used to control a product’s life cycle cost. The concept isimplemented by establishing rigorous cost goals for the new product early in the designor acquisition cycle. Life cycle costs are closely related to the reliability of equipment asdemonstrated in the field. Therefore, both realistic and adequate reliability tests areessential to develop and demonstrate equipment with satisfactory and known reliabilitycharacteristics prior to production commitment decisions. To achieve life cycle costingobjectives, managers will have to make many difficult decisions concerning theconditions and duration of test programs, and what actions to take based on test results.Life cycle cost analysis methods will vary from application to application. They aregenerally characterized by use of life cycle cost models to estimate and compare the lifecycle cost of alternatives.http://www.linkedin.com/in/hilairepereraHilaire Ananda PereraLong Term Quality Assurance
  • 4. Use of Cost Effectiveness (CE) Equation Parameter Past Unit New Unit Future Unit (A) (B) (C) Number of Missions 1000 1000 1000 B Operational Availability 0.800 0.985 0.990 Reliability 0.750 0.990 0.999 Worst ? C Successful Missions 600 975 989 Trade-off Area Life Cycle Cost 70000 90000 80000 LCC The Product could fail (10 out of 1000 ? times) during the operating time, product Best can be repaired (15 out of 1000 times) within the required restoration time, and A made available for continued operation 975 out of 1000 times CE_A = 0.0085 Successful Missions CE_B = 0.0108 CE_C = 0.0123 Cost Effectiveness equation (Successful Misions / $ ) is helpful for understanding benchmarks , past, present, and future status as shown in Figure for understanding trade-off information. The lower right hand corner of figure brings much joy and happiness often described as “bang for the buck”. The upper left hand corner brings much grief. The remaining two corners raise questions about worth and valuehttp://www.linkedin.com/in/hilairepereraHilaire Ananda PereraLong Term Quality Assurance
  • 5. Possible Outcomes From Trade-Off Studies F is preferable: Successful Missions are equal F is preferable: Cost is equal F costs less F has more Successful Missions LCC G LCC G F F Successful Missions Successful Missions F is preferable If ∆SM is worth more than ∆C : F is preferable: F costs less F has more Successful Missions F has more Successful Missions G costs less F LCC LCC F ∆C G G ∆SM Successful Missions Successful Missions Cost Effectiveness equation is useful for trade-off studies as shown in the above outcomeshttp://www.linkedin.com/in/hilairepereraHilaire Ananda PereraLong Term Quality Assurance