Analyses for durability and system design lifetime : a multidisciplinary approach

An issue in engineering design is a system's design lifetime. Economists study durability choice problems for consumer goods but seldom address lifetime problem(s) of complex engineering systems. The issues for engineering systems are complex and multidisciplinary and require an understanding of the 'technicalities of durability' and the economic implications of the marginal cost of durability and value maximization. Commonly the design lifetime for an infrastructure is set between 30 and 70 years. Satellite lifetimes are also assigned arbitrarily or with limited analysis. This book provides a systemic qualitative and quantitative approach to these problems addressing, first, the technicality of durability, second, the marginal cost of durability, and third, the durability choice problem for complex engineering systems with network externalities (competition and market uncertainty) and obsolescence effects (technology evolution). Since the analyses are system-specific, a satellite example is used to illustrate the essence and provide a quantitative application of said analyses.

Author Notes

Dr. Joseph H. Saleh is an Assistant Professor of Aerospace Engineering at the Georgia Institute of Technology. He received his Ph.D. from the Department of Aeronautics and Astronautics at MIT and served as the Executive Director of the Ford-MIT Alliance. His research focuses on issues of design lifetime and how to embed flexibility in the design of complex engineering systems in general and in aerospace systems in particular. Dr. Saleh is the author or co-author of 50 technical publications and the recipient of numerous awards for his teaching and research contributions. He served as a technical consultant to NASA's Jet Propulsion Laboratory and has collaborated on research projects with various aerospace companies.

Preface	p. xi
1 Introduction: On Time	p. 1
1.1 Sundials and human time	p. 1
1.2 Time and human artifacts	p. 5
1.3 Two broad categories of questions regarding durability	p. 5
1.4 Why the interest in product durability and system design lifetime?	p. 8
1.5 Book organization	p. 10
2 To Reduce or to Extend Durability? A Qualitative Discussion of Issues at Stake	p. 14
2.1 Introduction	p. 14
2.2 Nomenclature: Durability and design lifetime - A matter of connotation	p. 15
2.3 To reduce or to extend a product's durability? What is at stake and for whom?	p. 16
2.4 Example: To reduce or to extend a spacecraft's design lifetime?	p. 22
3 A Brief History of Economic Thought on Durability	p. 24
3.1 Introduction: Snapshot from the middle of the story	p. 24
3.2 Periodization and the history of economic thought on durability	p. 26
3.3 The origins and preanalytic period in the history of economic thought on durability: Knut Wicksell and Edward Chamberlin	p. 27
3.4 Growing interest in durability: Limitations of the price-quantity analysis and suspicious industry practices	p. 28
3.5 "Flawed analytic" period in the history of economic thought on durability	p. 32
3.6 The Swan-centric period in the history of economic thought on durability	p. 33
3.7 The identification of the time inconsistency problem for durable goods monopolists	p. 35
3.8 Recent economic literature on durability	p. 41
3.9 Limitations of current economic thinking about durability	p. 44
3.10 Conclusions	p. 48
Appendix - Origins of Coase's contribution to the time inconsistency problem of durable goods monopolists	p. 49
4 Analysis of Marginal Cost of Durability and System Cost per Day	p. 53
4.1 Introduction	p. 53
4.2 Nomenclature: Durability, design lifetime, and service life	p. 54
4.3 On values, metrics, and tradeoffs in the search for optimal durability	p. 56
4.4 Scaling effects and marginal cost of durability: The example of a satellite	p. 61
4.5 Cost elasticity of durability	p. 71
4.6 From marginal cost of durability to cost per day: Regions and archetypes	p. 74
4.7 Conclusions	p. 78
5 Flawed Metrics: System Cost per Day and Cost per Payload	p. 81
5.1 Introduction	p. 82
5.2 Two metrics in space system design and their implications	p. 83
5.3 Investigating satellite cost per day	p. 85
5.4 The case for a value-centric mindset in system design	p. 87
5.5 Satellite cost per transponder: Design implications and limitations	p. 94
5.6 Conclusions	p. 97
6 Durability Choice and Optimal Design Lifetime for Complex Engineering Systems	p. 101
6.1 Introduction: A topic overlooked by economists and engineers	p. 101
6.2 An augmented perspective on design and optimization: A system's value and the associated flow of service	p. 102
6.3 Optimal durability under steady-state and deterministic assumptions	p. 104
6.4 Durability, depreciation, and obsolescence: A preliminary account	p. 110
6.5 Uncertainty, risk, and the durability choice problem: A preliminary account	p. 118
6.6 Conclusions	p. 123
Epilogue. Perspectives in Design: The Deacon's Masterpiece and Hundred-Year Aircraft, Spacecraft, and Other Complex Engineering Systems	p. 128
1 On durability through robustness: The Oliver Wendell Holmes way	p. 129
2 Time to failure	p. 131
3 Beyond robustness: On durability through flexibility in system design	p. 136
4 The new deacon's masterpiece: Challenge for poets and engineers!	p. 141
Appendix A Beyond Cost Models, System Utility or Revenue Models: Example of a Communications Satellite	p. 145
A.1 Introduction	p. 145
A.2 Motivation: Proliferation of system cost models and absence of revenue or utility models	p. 146
A.3 Developing the revenue model structure for a communications satellite	p. 149
A.4 Modeling satellite loading dynamics	p. 153
A.5 Integrating satellite loading dynamics with transponder lease price	p. 164
A.6 Conclusions	p. 169
Appendix B On Durability and Economic Depreciation	p. 171
B.1 Introduction	p. 171
B.2 Depreciation, deterioration, and obsolescence: The traditional interpretation	p. 174
B.3 The model	p. 175
B.4 Depreciation and incremental present value	p. 178
B.5 Depreciation and obsolescence	p. 188
B.6 Concluding remarks	p. 191
Index	p. 195

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