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4 - Analysis of Marginal Cost of Durability and System Cost per Day

Published online by Cambridge University Press:  25 October 2009

Joseph H. Saleh
Joseph H. Saleh
Affiliation:
Georgia Institute of Technology
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Summary

PREVIEW AND GUIDE TO THE CHAPTER

Analysis of the marginal cost of durability is a prerequisite for addressing the durability choice problem. This straightforward observation is often forgotten in the economic literature on durable goods, or dismissed by making the unrealistic assumption that the marginal cost of durability is zero. The details of a marginal cost of durability analysis are system-specific. A satellite example is discussed to illustrate the essence and provide a quantitative application of such analysis. First, the impacts of the durability requirement on different subsystems on board the spacecraft are quantitatively explored, that is, how the different subsystems (power, propulsion, thermal, etc.) scale with increased durability; second, the effects of durability on the different subsystems are integrated and typical satellite cost profiles are provided as a function of durability. The result represents the marginal cost of durability of a satellite. In addition to the satellite example, two related metrics are introduced, the cost elasticity of durability and the cost per day, which allow a clear understanding and visualization of the economies of scale, if any, that result from extended durability. This chapter contributes a necessary first step toward a rational choice of durability for engineering systems from a customer's perspective.

Introduction

The first chapter introduced two broad categories of questions related to an artifact's durability: the technicalities of durability, and the choice of durability.

Type
Chapter
Information
Analyses for Durability and System Design Lifetime
A Multidisciplinary Approach
 , pp. 53 - 80
Publisher: Cambridge University Press
Print publication year: 2007

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References

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