Affordability Assessments to Support Strategic Planning and Decisions at NASA

Transcription

1 Affordability Assessments to Support Strategic Planning and Decisions at NASA Debra Emmons 1 Marcus Lobbia 2 Torrey Radcliffe 2 Robert Bitten 1 1 Civil and Commercial Operations 2 7 March 21 The Aerospace Corporation 29

2 Agenda Introduction Need for Affordability Analysis Project Cost and Schedule Assessments Affordability Analysis Process Strategic Analysis Tool Needed to Support Long Term Decision Making Process Supporting the Review of U.S. Human Space Flight Plans Assessment of Integrated Options Summary 2

3 Introduction 3

4 Need for Affordability Analysis Forty NASA Robotic Science Missions Experienced 27% Cost and 22% Schedule Growth during Development Schedule Ratio within cost and schedule within 1% overrun Cost Ratio Results indicate a correlation between cost and schedule growth for dataset investigated 4

5 Cumulative Probability Need for Affordability Analysis (continued) 77 Historical NASA Projects Demonstrated ~51% Cost Growth from Formulation Start to Launch A % average cost growth corresponds to 17% confidence on lognormal approximation to data. 17%-tile = % historical cost growth (no reserves). 51% average cost growth corresponds to mean of lognormal approximation to data. Mean = 51% historical cost growth. Cumulative Probability Function of Cost Growth for 77 Historical NASA Projects (Human Space Flight (HSF), Non-HSF, Ground ) B 1% 9% Mean historical cost growth 8% 7% 6% B Historical data-77 missions Lognormal "Historical data -77 missions" 5% 4% 3% 2% A 1% % -1% -5% % 5% 1% 15% 2% 25% 3% A B Cost Growth (Includes cost and schedule uncertainty effects ) 5

6 Project Cost and Schedule Assessments Strategic-level affordability analysis requires a credible baseline Primary tenets of cost estimating employed by Aerospace: Use Multiple Methods Ensures that no one model/database biases the estimate Industry Standard Methods (NAFCOM, NICM, PRICE, SEER, etc.) Aerospace Developed Models (SSCM, SOSCM, LVCM, etc.) Use Analogy Based Estimating Ties cost to systems that have been built with known cost Allows contractor specific performance to be addressed Forces both independent estimate and project to look at the cost and complexity of new concepts with respect to previously built hardware Use Both System Level and Lower Level Approaches Ensures that lower level approaches do not omit elements or underestimate overall cost relative to system level complexity 6

7 Affordability Analysis Process 7

8 Strategic Analysis Tool Needed to Support Long Term Decision Making Process Sand Chart Tool (SCT) Objectives Support long-term strategic planning and analysis from cost, budget, and affordability viewpoints Benefits Ability to simulate all elements of a program or all missions within a portfolio Long-term program/portfolio analysis 1-2 years Ability to analyze multiple program/portfolio changes simultaneously Quantitative results to support strategic decisions Changes in mission launch dates to fit new program content Assess Figures of Merit Likelihood of X number of missions launched by 22x Likelihood of portfolio cost over time Likelihood of mission launch dates Likelihood of individual mission s cost or schedule breach Affordability analysis is a way to inform strategic planning and avoid Mt. Everest peaks beyond expected budgets 8

9 Confidence Level Confidence Level Cost, RY$M Affordability Analysis A Real World View Organizational inputs - Mission Directorates - Programs, Projects Launch Development Development Funding Cost Risk S- Technical Missions Readiness Duration Cost Profile Curve Specs. Date Astrophysics GLAST weiler brief Budget + CAD PBudget + CAD P Budget + CAD PBudget + CAD Projection Planck weiler brief Budget Budget Budget Budget Herschel weiler brief Budget Budget Budget Budget Kepler weiler brief Budget Budget Budget Budget HST-S4 weiler brief Budget projecbudget Budget projecbudget + + project + + projection WISE weiler brief Budget Budget Budget Budget SOFIA weiler brief Budget PBudget Budget PBudget (incl. Flights) + CAD + CAD P + CAD + CAD Projection SOFIA Flights weiler brief Analysis Analysis Analysis Analysis JWST weiler brief Budget + YBudget + YeBudget + YBudget + Last Last Last Last Year Projection NuStar weiler brief Budget Budget Budget Budget JDEM weiler brief Cap+Budget Cap+Budget Cap+Budget Cap+Budget ExoP-M1 weiler brief Quickcost Quickcost Quickcost Quickcost Astro-1 weiler brief Quickcost Quickcost Quickcost Quickcost Astro-2 weiler brief SID Input SID Input SID Input SID Input ExoP-M2 weiler brief Quickcost Quickcost Quickcost Quickcost EP-2 weiler brief Quickcost Quickcost Quickcost Quickcost ExoP-L1 weiler brief Quickcost Quickcost Quickcost Quickcost HST-D weiler brief IPAO IPAO IPAO IPAO EP-3 weiler brief Quickcost Quickcost Quickcost Quickcost Astro-3 weiler brief Quickcost Quickcost Quickcost Quickcost Restricted Launch Window? Linkages? Sand Chart Tool 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Fiscal Year Sand Chart Tool is one part of the analysis process data collection and analyst input are also very important IOCb - ISS - Orion IOCb - ISS - Ares I IOCb - ISS - EVA IOCb - ISS - Ground IOCb - ISS - Mission IOCb - ISS - SCIP IOCb - ISS - Discrete Risks - Fixed - ISS - Orion - Fixed - ISS - Ares I - Fixed - ISS - EVA - Fixed - ISS - Ground - Fixed - ISS - GO STS Standing Army - Fixed - ISS - Mission - Fixed - ISS - MO STS Standing Army - Fixed - ISS - Discrete Risks - Variable - ISS - Orion - Variable - ISS - Ares I - Variable - ISS - Ground IOCb - Lunar - Orion IOCb - Lunar - Ares V IOCb - Lunar - EVA IOCb - Lunar - Altair IOCb - Lunar - Ground IOCb - Lunar - Mission IOCb - Lunar - SCIP IOCb - Lunar - Discrete Risks - Fixed - Lunar - Ares V - Fixed - Lunar - EVA - Fixed - Lunar - Altair - Fixed - Lunar - Ground - Fixed - Lunar - SCIP - Variable - Lunar - Ares V - Variable - Lunar - EVA - Variable - Lunar - Altair - Variable - Lunar - Ground - Fixed - Lunar - Discrete Risks IOCb - Post - Lunar - Surface Systems IOCb - Post - Lunar - Outpost Wedge Fixed - All - PI - Fixed - Early Lunar Development Budget Available 1% Budget Available (w / Rolled-Over Reserves) 9% 8% 7% 6% 5% 1% Confidence Level Estimate - IOC 4% 3% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Program Budget w/ Reseves 65% $19 $21 $23 $25 $27 $29 $31 TY $B Interpretation and vetting of data inputs Before After Algorithms and penalty functions informed by historical data and past studies 9 2% 1% Reference "Business as Usual" % Feedback Loop Number of Missions Implemented by 225 Interpretation and understanding of analysis

10 Percent Likelihood RY$M Cost, RY$M Cost, RY$M Cost, RY$M Cost, RY$M Confidence Level Confidence Level Confidence Level Confidence Level RY$M SCT Designed to Evaluate Scenarios for Given Program/ Portfolio or Develop Plan Given Individual Elements 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, 2, 16, 1, 6, 4, 2, 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% 2, 18, 16, 14, 14, 12, 1, 8, % 1% 2% 3% , 12, 8, 6, 4, 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% 1% 9% 8% 7% 6% 5% 4% 3% 2% 2, 18, 16, 14, 12, 1, 8, 6, 4, 1% 9% 8% 7% 6% 5% 4% 3% % 1% Project 2% Cost, $M % 1% Project Cost, $M % Project Cost, $M year delay in HLR % Date 1% 9% 8% 7% 6% 5% 4% Project Cost, $M , Fiscal Year , Fiscal Year Fiscal Year Fiscal Year Baseline No HSF Gap IOCb - ISS - Orion IOCb - ISS - Ares I IOCb - ISS - EVA IOCb - ISS - Ground IOCb - ISS - Mission IOCb - ISS - SCIP IOCb - ISS - Discrete Risks - Fixed - ISS - Orion - Fixed - ISS - Ares I - Fixed IOCb - ISS ISS - EVA Orion - Fixed IOCb - ISS ISS - Ground Ares I - Fixed IOCb - ISS ISS - GO EVA STS Standing Army - Fixed IOCb - ISS - Mission Ground - Fixed IOCb - ISS - MO Mission STS Standing Army - Fixed IOCb - ISS - Discrete SCIP Risks - Variable IOCb - ISS - ISS - Discrete - Orion Risks - Variable - Fixed - ISS - - ISS Ares - Orion I - Variable - Fixed - ISS - - ISS Ground - Ares I IOCb Lunar - Fixed - Orion ISS EVA IOCb Lunar - Fixed - Ares V ISS Ground IOCb Lunar - Fixed - EVA ISS GO STS Standing Army IOCb Lunar - Altair IOCb Lunar - Ground IOCb Lunar - Mission IOCb Lunar - Fixed IOCb - SCIP - ISS ISS - Mission Orion IOCb Lunar - Fixed IOCb - Discrete - ISS ISS Risks - MO Ares STS I Standing Army - Fixed - Fixed IOCb Lunar - - ISS ISS Ares - Discrete EVA V Risks - Fixed - Variable IOCb - ISS Lunar EVA - ISS - Ground - Orion - Fixed - Variable IOCb - ISS Lunar Altair - ISS - Mission - Ares I - Fixed - Variable IOCb - ISS Lunar Ground - ISS - SCIP - Ground - Fixed IOCb Lunar Lunar IOCb - - ISS SCIP Orion - Discrete Risks - Variable IOCb Lunar - Fixed - Lunar - Ares - - Ares V ISS - Orion V - Variable IOCb Lunar - Fixed - Lunar - EVA - ISS - Ares I IOCb Lunar Cx - - Fixed - IOCb Altair - ISS ISS - EVA Orion IOCb Lunar Cx - - Fixed - IOCb Ground - ISS ISS - Ground Ares I IOCb Lunar Cx - - Fixed - IOCb Mission - EVA - ISS ISS - GO EVA STS Standing Army - Variable IOCb Lunar - Cx Lunar - - Fixed - IOCb SCIP - Altair - ISS - Mission Ground - Variable IOCb Lunar - Cx Lunar - - Fixed - IOCb Discrete - Ground - ISS Risks - MO Mission STS Standing Army - Fixed - Fixed Lunar - Fixed Lunar IOCb Discrete - - ISS Ares Risks - Discrete SCIP V Risks IOCb Post - Fixed Lunar - Variable Lunar IOCb Surface - ISS EVA - Systems ISS - Discrete - Orion Risks IOCb Post - Fixed Lunar - Variable Lunar Outpost - Fixed Altair - Wedge ISS - - ISS Ares - Orion I Fixed - All - PI - Fixed - Variable Lunar - Fixed Ground - ISS - - ISS Ground - Ares I - Fixed - Fixed Early IOCb Lunar Lunar - Development Fixed - SCIP Orion - ISS - EVA - Variable IOCb Lunar - Lunar - Fixed - Ares - Ares - V ISS V - Ground - Variable IOCb Lunar - Lunar - Fixed - EVA - EVA - ISS - GO STS Standing Army - Variable IOCb Lunar - Lunar - Altair - Altair - Variable IOCb Lunar - Lunar - Ground - Ground - Fixed IOCb Lunar Lunar - Discrete Mission Risks IOCb Post IOCb Lunar Lunar - Fixed - Surface SCIP - ISS - Mission Systems IOCb Post IOCb Lunar Lunar - Fixed - Outpost Discrete - ISS Wedge Risks - MO STS Standing Army Fixed Cx All PI Fixed - - Fixed Lunar - - ISS Ares - Discrete V Risks - Fixed - Fixed - Early Variable Lunar Development EVA - ISS - Orion - Fixed - Variable Lunar Altair - ISS - Ares I - Fixed - Variable Lunar Ground - ISS - Ground - Fixed IOCb - Lunar Lunar - SCIP Orion - Variable IOCb - Lunar - Lunar - Ares - Ares V V - Variable IOCb - Lunar - Lunar - EVA IOCb - Lunar - Altair IOCb - Lunar - Ground IOCb - Lunar - Mission - EVA - Variable IOCb - Lunar - Lunar - SCIP - Altair - Variable IOCb - Lunar - Lunar - Discrete - Ground Risks - Fixed - Fixed Lunar - Lunar Discrete - Ares Risks V IOCb Post - Fixed Lunar - - Lunar Surface - EVA Systems IOCb Post - Fixed Lunar - - Lunar Outpost - Altair Wedge Fixed - All - - PI Fixed - Lunar - Ground - Fixed - - Fixed Early - Lunar Lunar Development - SCIP - Variable - Lunar - Ares V - Variable - Lunar - EVA - Variable - Lunar - Altair - Variable - Lunar - Ground - Fixed - Lunar - Discrete Risks IOCb - Post - Lunar - Surface Systems IOCb - Post - Lunar - Outpost Wedge Fixed - All - PI - Fixed - Early Lunar Development Budget Available Budget Available Input: baseline plan, cost likelihood curves, program linkages Perform Monte Carlo probabilistic analysis Budget Available Evaluation Budget Available Budget Available (w / Rolled-Over Reserves) Budget Available (w / Rolled-Over Reserves) Budget Available (w / Rolled-Over Reserves) Budget Available (w / Rolled-Over Reserves) Output: schedule likelihood curves, # of missions complete, etc Fiscal Year Apply Stretch Algorithms Fiscal Year Planning Planetary Science - Planetary Science Research Planetary Science - Discovery Planetary Science - Mars Exploration Planetary Science - Technology Planetary Science - MSL 211 LRD Planetary Science - Juno Planetary Science - MoO-3 Planetary Science - ExoMars Input: baseline plan, program linkages Planetary Science - Disc-12 Planetary Science - MoO-4 Planetary Science - NewFront3 Planetary Science - Mars 216 Planetary Science - Mars 218 Planetary Science - MoO-6 Planetary Science - MoO-7 Planetary Science - MSL 211 LRD Planetary Science - GRAIL Output: New strawman plan that fits budget available Planetary Science - Juno Planetary Science - MoO-3 Planetary Science - ExoMars Planetary Science - Disc-12 Planetary Science - MoO-4 Planetary Science - NewFront3 Planetary Science - Mars 216 Planetary Science - Mars 218 Planetary Science - MoO-6 Planetary Science - MoO-7 Planetary Science - LADEE Planetary Science - ILN-1/ILN-2 Planetary Science - MAVEN (Mars Scout2) Planetary Science - Disc-13 Planetary Science - MoO-5 Planetary Science - ILN-3/ILN-4 Planetary Science - Disc-14 Planetary Science - ILN-5/ILN-6 Planetary Science - Disc-15 Planetary Science - NewFront4 Planetary Science - Mars 222 Planetary Science - Lunar 7 Planetary Science - MoO-8 Planetary Science - Mars 224 Planetary Science - Mars 226 Planetary Science - Lunar Science Program Planetary Science - New Frontiers Planetary Science - Outer Planets Planetary Science - Chndraayn1 (M3) Planetary Science - GRAIL Planetary Science - LADEE Planetary Science - ILN-1/ILN-2 Planetary Science - MAVEN (Mars Scout2) Planetary Science - Disc-13 Planetary Science - MoO-5 Planetary Science - ILN-3/ILN-4 Planetary Science - Disc-14 Planetary Science - ILN-5/ILN-6 Planetary Science - Disc-15 Planetary Science - NewFront4 Planetary Science - Mars 222 Planetary Science - Lunar 7 Planetary Science - MoO-8 Planetary Science - Mars 224 Planetary Science - Mars 226 Planetary Science - Disc-16 Planetary Science - Disc-17 Planetary Science - Lunar-8 Planetary Science - MoO-9 Planetary Science - NewFront5 Planetary Science - MoO-1 Planetary Science - MoO-11 Planetary Science - Lunar 9 Planetary Science - MHP Budget Planetary Science - Planetary Science Research Planetary Science - Lunar Science Program Planetary Science - Discovery Planetary Science - New Frontiers Planetary Science - Mars Exploration Planetary Science - Outer Planets Planetary Science - Technology Planetary Science - Chndraayn1 (M3) Planetary Science - Lunar-8 Planetary Science - Disc-16 Planetary Science - MoO-9 Planetary Science - Disc-17 Planetary Science - NewFront5 Planetary Science - MoO-1 Planetary Science - MoO-11 Planetary Science - Lunar 9 Planetary Science - MHP Budget

11 Cost Cost Cost Cost, FYxx$M FYxx$M Cost Cost SCT Applies Real World Penalties to Projects Based on Performance of Other Elements in Portfolio With Cost Overruns Included Adjusted to Fit Budget 4, 35, Threat - ISS Retirement $1B in Threat - SOMD ISS thru 22 Threat - ISS Upmass through 216 Threat - SSP Transition and Retire $2.8B ARD - Aeronautics Research SM D - Science ESM D - Advanced Capabilities SOM D - Space and Flight Support (SFS) SOM D - ISS SOM D - STS 3, 25, 2, 15, 1, 5, Year - Lunar - Outpost Wedge Historical - - Lunar - SCIP Historical - - Lunar - PI Historical - - Lunar - Mission Historical - - Lunar - Ground Historical - - Lunar - Surface Systems Historical - - Lunar - Lander Historical - - Lunar - EVA Historical - - Lunar - Ares V Historical - - Lunar - Ares II Historical - - Lunar - Orion Historical - IOC - Lunar - SCIP Historical - IOC - Lunar - PI Historical - IOC - Lunar - M ission Historical - IOC - Lunar - Ground Historical - IOC - Lunar - Lander Historical - IOC - Lunar - EVA Historical - IOC - Lunar - Ares V Historical - IOC - Lunar - Ares II Historical - IOC - Lunar - Orion Historical - - ISS - PI Historical - - ISS - Mission Historical - - ISS - Ground Historical - - ISS - EVA Historical - - ISS - Ares II Historical - - ISS - Orion Historical - IOC - ISS - SCIP Historical - IOC - ISS - PI Historical - IOC - ISS - M ission Historical - IOC - ISS - Ground Historical - IOC - ISS - EVA Historical - IOC - ISS - Ares II Historical - IOC - ISS - Orion Annual Budget Available (w/ Rolled-Over Reserves) Annual Budget Available (Initial) Apply Penalties Year Before After Shift project that just started right one year to fit under wedge Year Penalty 1: Delay Start Before After Hold project at Phase A/B funding to fit under wedge Year Penalty 2: Phase A/B Hold Before After Budget reduced for several projects, and added back later (with an inefficiency factor) Year Penalty 3: Funding Reduction Simulation of Program Manager responses to budget constraints based on historical experience 11

12 Sand Chart Tool Other Ground Rules and Assumptions Many Assumptions are Different than for other Cost-Risk Tools Cost draws are applied using based on historical experience Linked cost-schedule model where cost draws affect schedule S-curve input is truncated at baseline cost Assumed that projects will never give back allocated funding Schedule linkages enforced between projects Holds applied when some projects are waiting for others to finish Caps on spending ramp rates, limited look ahead, etc. yield cases where delays occur even when funding is available Projects are penalized when necessary to fit available funding Funding reduction applied to all projects when necessary Functional vs. statistical correlation Budget constraints and schedule linkages can correlate projects 12

13 Supporting the Review of U.S. Human Space Flight Plans 13

14 Future of U.S. Human Spaceflight in the Upcoming Decades Formulated in Terms of Five Key Questions 1. What should be the future of the Space Shuttle? 2. What should be the future of the International Space Station (ISS)? 3. On what should the next heavy-lift launch vehicle be based? 4. How should crews be carried to low-earth orbit? 5. What is the most practicable strategy for exploration beyond low- Earth orbit? 14

15 Affordability Analysis for U.S Human Space Flight Review Performed affordability analysis of various integrated options Identified when capabilities could be realized based on budget constraints Incorporated historical risk impact on realizing cost and schedule Workforce / industrial-base like impacts modeled with assumptions for carrying costs during schedule stretch-outs, when appropriate Several steps in process Develop baseline for each scenario Lunar mission scenarios Flexible path / deep space mission scenarios Fit content to budget cases FY1 President s Budget Less Constrained budget with additional $3B/year Determine cost and schedule to various capabilities Initial crew launch capability Heavy lift launch vehicle 15

16 Summary of Integrated Options Evaluated by Review of HSF Committee 16

17 Methodology Overview: Review of Human Space Flight (HSF) 1. Point Estimate Without Reserve 2. Cost-Risk Curve Informed by Historical Program Experience 3. Starting Project Budget Profiles and Schedule Dependencies 5. Program Budget Under Funding Constraints 4. Assembled Program Architecture Budgets 17

18 $ in M $ in M Notional Sand Chart Used for Program Assessment 2, 18, Total Program Cost shown at 65 th percent likelihood. Calculated project cost in excess of initial point estimate, is aggregated and redistributed to each project proportionally. 16, Two Budget Scenarios: FY1 and Less Constrained 14, 12, 1, ISS Other Non-Program elements Lunar Surface Systems Other Program elements Dotted colors represent operations costs Outpost 8, 6, 4, 2, STS LEO Launch Vehicle Crew Module Ground Heavy Launch Vehicle 18 Lander FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY2 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 Program.6 IC dates shown as range from.4hlr 5 th to 8 th percent likelihood LEO Capability IC HLR Shuttle Retirement ISS Retirement Schedule Outputs Constraints Outpost 29 FY9 21 FY1 211 FY FY12 FY FY FY FY FY FY FY FY2 22 FY FY FY FY FY FY FY FY FY FY3 23

19 Summary 19

20 Summary Aerospace s affordability analysis process: Can help verify the feasibility of large portfolios in budget-constrained environments Provides quantitative results that can be used to iterate with decision-makers and improve portfolio robustness In support of the U.S. Review of HSF Plans Committee: Established tools/methodologies enabled quick-turnaround results Historical performance of NASA s past projects was used to tie cost-growth risk to reality in-lieu of more detailed and time-consuming estimates This process allowed many different scenarios to be analyzed in a short period of time, with the ability to look at how changes in portfolio content, budget lines, etc. led to differences in realizing defined objectives 2

21 Thank you The Aerospace Corporation 29

22 Backup The Aerospace Corporation 29

23 What is Sand Chart Tool? Sand Chart Tool (SCT) is an Excel-based model for analyzing the cost vs. available budget of a portfolio of programs and projects Strategically re-plan a portfolio Insights gained from Re-plan prior to execution understanding the portfolio execution lead Evaluate the execution of a portfolio to better strategic plans from a more tactical perspective Impact of potential cost-overruns Interactions of linked projects SCT is one piece of a larger Sand Chart process Analyst in the loop required to integrate/interpret data sources, ensure consistency, and sanity check results 23

24 Sand Chart Tool Planning vs. Evaluation Modes Different modes capture the Strategic vs. Tactical perspectives 24

25 Level Confidence Level Cost Evaluation Mode Modeling of Cost Growth Draws performed on both size of cost growth and date cost growth is realized Perform Random Draw on Cost S-curve Is Cost > Baseline? No Use Baseline Cost/Schedule Funding Profile Yes Time 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Cost Growth $ Baseline Cost Random Draw Cost Perform Draw To Determine Where Cost Growth Occurs Development Programs Phase C Growth Phase C/D Cost Growth Production/ Proportional Cost Growth % Cost Project Cost, $M Apply cost growth to program Phase C Phase D 25

26 Jan, 29 Feb, 29 Mar, 29 Apr, 29 May, 29 Jun, 29 Jul, 29 Aug, 29 Sep, 29 Oct, 29 Nov, 29 Dec, 29 Jan, 21 Feb, 21 Jan, 29 Feb, 29 Mar, 29 Apr, 29 May, 29 Jun, 29 Jul, 29 Aug, 29 Sep, 29 Oct, 29 Nov, 29 Dec, 29 Jan, 21 RY$M Jan, 29 Feb, 29 Mar, 29 Apr, 29 May, 29 Jun, 29 Jul, 29 Aug, 29 Sep, 29 Oct, 29 Nov, 29 Dec, 29 RY$M Jan, 29 Feb, 29 Mar, 29 Apr, 29 May, 29 Jun, 29 Jul, 29 Aug, 29 Sep, 29 Oct, 29 Nov, 29 Dec, 29 Jan, 21 Feb, 21 Mar, 21 Apr, 21 May, 21 Jun, 21 Jul, 21 Aug, 21 RY$M RY$M RY$M RY$M Planning Mode Stretch Algorithm START 4 2 FINISH Fiscal Year Interpolation of program costs Fiscal Year Temporal scaling complete Temporal scaling of program to fit budget 26

27 Planning Mode vs. Evaluation Mode Analysis Tool Mode Planning Evaluation Analysis Type Deterministic Monte Carlo Purpose Usage Scenarios Primary Modeling Assumptions Input Output Simulate how planned milestone dates shift due to changes in budgeting assumptions - Sensitivity and what-if studies - Developing re-planned baseline budget (input to evaluation mode) - No cost penalties for stretching or compressing budgets - No ramp rate limits - Parallel independent programs all stretched together (some might be delayed in real world) - program and reserve budget profiles, wedge constraints - Start date shifts (optional) - Cost S-curve mean, std dev - Desired project CLs (re-scales baseline budget profiles) Budget sand chart stretched/compressed to fit budget constraints Simulate actual program spending to determine impacts of cost growth, parallel programs, ramp-up limits, reserve carry-over, etc. on confidence of achieving portfolio milestones - Determining confidence level of achieving portfolio milestones - Optimizing reserve strategy - Illustrating impact of managing parallel programs in a budget-constrained environment - Random draws on project cost-risk (before penalties) truncated at budgeted CL - Uncorrelated cost draws - Look ahead, critical path, and re-baseline penalties - Program and reserve budget profiles, wedge constraints - Cost S-curve mean, std dev - Ramp rate limits - Schedule linkages - Algorithm settings (e.g. allow funding reduction, etc.) S-curve distributions of program costs and schedule milestones Run time Fast (seconds) Slow (minutes to hours) 27

28 Flowchart of SCT Planning Mode Uses simple temporal-scaling algorithm to stretch/compress programs to fit budget constraint Implicitly maintains schedule phasing between linked development programs Deterministic algorithm (i.e. no Monte Carlo or optimization performed) Input data Interpolate budgets Re-scale budget profiles to specified confidence levels Shift start dates Shift/exclude next Shift program Stretch/compress remaining Stretch programs Remove Exclude programs Yes Any Shift program s left? No Output results Stretch/compress remaining Stretch program Remove Exclude program 28

29 Flowchart of SCT Evaluation Mode Input data Perform cost draws Internal cost and schedule growth Simulates Program Manager response to overbudget situations Internal cost growth modeled using Monte Carlo analysis Note that Schedule Linkages are also checked during the Budget Execution Simulation after any changes to program cost profiles or schedules (this check is not shown on the flowchart for simplicity) Over baseline cost? No Compare cost and budget for current time step Under budget? Yes Yes Perform schedule draws Modify baseline cost profiles Potential for start date acceleration Budget Execution Simulation Yes Accelerate start date No Apply Penalty 1 No Under budget? No Yes Potential for Phase D compression Yes Compress Phase D Apply Penalty 2 No Under budget? No Yes Advance to next time step Apply Penalty 3 29