Prediction of behavior and support requirements during the entire life cycle of a system enables accurate cost estimates by using the Monte Carlo simulation by computer. The system reduces the ultimate cost to the procuring agency because it takes into consideration the costs of initial procurement, operation, and maintenance

Gralow, F. H.

Larson, W. J.

English

NASA Technical Reports Server

November 1969	 Brief 69-10590 
NASA TECH BRIEF 
NASA Tech Briefs are issued to summarize specific innovations derived from the U.S. space program, 
to encourage their commercial application. Copies are available to the public at 15 cents each 
from the Clearinghouse for Federal Scientific and Technical Information, Springfield, Virginia 22151. 
Monte Carlo Simulation by Computer for Life-Cycle Costing 
is
The problem: 
Development of a method of simulation of a system, 
for prediction of its behavior and support require-
ments during its entire life cycle so that estimates of 
its life cycle cost will be facilitated. Such a system 
could reduce the ultimate cost of a system to the pro-
curing agency because it would take into considera-
tion the costs of initial procurement, operation, and 
maintenance as true indications of the total cost of 
owning an engineering system. Earlier techniques 
have considered only the costs of initial procurement 
or resupply. Experience indicates that the initial cost 
of a system may be less than 10% of its life-cycle cost. 
The solution: 
Application of Monte Carlo methods to modeling of 
a proposed system. 
How it's done: 
A competing contractor is asked to develop a 
Monte Carlo model of his proposed system that in-
corporates the following parameters: predicted 
reliability and maintainability; operation and main-
tenance processes; and requirements for facilities, 
spares, personnel, and transportation. The main-
tenance activities are inserted in the opeational 
activities on the basis of probability of occurrence as 
determined by the predicted reliability characteristics 
of the system. Dollar costs are associated with all the 
support and operating elements, and successive runs 
of the model are made for establishment of life-cycle 
cost and levels of confidence in that cost. 
The simulated life of the system may amount to 
months or years, depending on the intended use of 
the system. Information on availability of the system, 
or other figure of merit of the system, can be predicted
by the model; these data, combined with information 
on cost, enable comparison of one contractor's pro-
posal with another's. 
Any degree of detail can be modeled with this sys-
tem: at the level of the gross functional system, a sub-
system, or a first-level-maintenance component. The 
degree of detail is determined by the size of the pro-
gram involved, the state of its development, and the 
degree of accuracy desired by the procuring agency. 
After letting of a contract the model will be re-
tained in an active status as a valuable tool for studies 
of parametric trades in the system; and, when data 
become, available from actual tests or operation, for 
comparison of "attained" values of maintainability, 
reliability, and availability with predictions made 
during competition for the contract. Also the model 
will facilitate formulation of quantitative require-
ments for operating and logistics elements. 
Notes: 
1. For details of comparable systems see NASA, 
Rept. NT-36, "Saturn V prelaunch system simu-
lation model" (available from NASA New Tech-
nology System); NASA, Rept. D5-15398-2, "Saturn 
V operations analysis optimization 'methodology" 
(available from Document Repository, Marshall 
Space Flight Center); The Boeing Company, Rept. 
132-16187-2, "Minuteman simulation model for 
availability, maintenance, and logistics studies: 
Modernized wings I through V and wing VI" (avail-
able from The Boeing Co., Seattle, Wash.). 
2. The technique may be useful for process-control 
systems in industry, and for systems dealing with 
relation of facilities to population in an urban 
environment; the armed forces and designers and 
analysts of systems may be interested.
(continued overleaf) 
This document was prepared under the sponsorship of the National	 Government assumes any liability resulting from the use of the 
Aeronautics and Space Administration. Neither the United States	 information contained in this document, or warrants that such use 
Government nor any person acting on behalf of the United States	 will be free from privately owned rights.
https://ntrs.nasa.gov/search.jsp?R=19690000545 2020-03-16T18:27:43+00:00Z
No further documentation is available. Inquiries 
may be directed to: 
Technology Utilization Officer 
Marshall Space Flight Center 
Huntsville, Alabama 35812 
Reference:' B69-10590
Patent status: 
Inquiries about obtaining rights for the commercial 
use of this invention may be made to NASA, Code 
GP, Washington, D.C. 20546. 
Source: F. H. Gralow and W. J. Larson of

The Boeing Company

under contract to

Marshall Space Flight Center

(MFS- 14754)
. 
. Brief 69-10590	 Category 05


Monte Carlo simulation by computer for life-cycle costing

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