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Are there any independent assessments that back up the F9 reuse costs? It's hard for me to parse what is Musk hype vs. what is reasonable and objective estimate

by bumby 5y ago

Are there any independent assessments that back up the F9 reuse costs? It's hard for me to parse what is Musk hype vs. what is reasonable and objective estimates.

jmyeet 5y ago
"Cost" is a hard thing to determine of anything this complex. Obviously there's a development cost that has to be amortized across launches so how many do you expect? 10? 100? Famously for years the 747 was a huge profit center for Boeing because it had blown away any estimates of how many they'd sell. But it's not just straight fixed vs variable costs. You need assembly lines that have a production capacity. How mjch capacity do you want? Do you want the ability to ramp up production if there's sufficient demand? But other launch vehicles had relatively straightforward math. The vehicle costs $Xm to produce and launch so you charge $(x+y)m for that (where y is the amortized development cost and profit). Production capacity is still a factor (as a variable cost) of course. But a resuable vehicle just upends all that math. Part of the math is then how long does it take to recondition a vehicle for a future flight? How many times can it be reused? Does each reuse make the reconditioning cost more? A lot of these questions will only be answered with time and experience. And obviously that's a key commercial secret for SpaceX. But they can pretty much charge what they want because there's literaly no competition at that price point. I imagine this is a big part of what is funding the (significant) R&D costs for Starship and Raptor.
- bumby 5y ago
  I agree. Although the space industry does have various ways of measuring the cost uncertainty, including the cost covariance in a complex system. (A good book on this is Probability Methods for Cost Uncertainty Analysis) >A lot of these questions will only be answered with time and experience. I guess that's a bit of what I was poking at. In my mind, there's still a lot of uncertainty with the cost claims, but I see so many people talking about how it's going to bring launch costs down X% and they seem to say it with relative certainty. I have faith that SpaceX will make great strides in this, but at the moment it seems to be a big unknown, at least in terms of magnitude. My biggest worry is that every misstep will layer additional quality oversight that will drive up cost. An example being the strut failure from a few years back that was related to a supplier material issue. As a remedy, SpaceX now does additional supplier quality control checks. I can imagine a few decades of similar issues being fixed may drive their processes to be more costly.

by bumby 5y ago

Are there any independent assessments that back up the F9 reuse costs? It's hard for me to parse what is Musk hype vs. what is reasonable and objective estimates.

jmyeet 5y ago

"Cost" is a hard thing to determine of anything this complex. Obviously there's a development cost that has to be amortized across launches so how many do you expect? 10? 100? Famously for years the 747 was a huge profit center for Boeing because it had blown away any estimates of how many they'd sell. But it's not just straight fixed vs variable costs. You need assembly lines that have a production capacity. How mjch capacity do you want? Do you want the ability to ramp up production if there's sufficient demand? But other launch vehicles had relatively straightforward math. The vehicle costs $Xm to produce and launch so you charge $(x+y)m for that (where y is the amortized development cost and profit). Production capacity is still a factor (as a variable cost) of course. But a resuable vehicle just upends all that math. Part of the math is then how long does it take to recondition a vehicle for a future flight? How many times can it be reused? Does each reuse make the reconditioning cost more? A lot of these questions will only be answered with time and experience. And obviously that's a key commercial secret for SpaceX. But they can pretty much charge what they want because there's literaly no competition at that price point. I imagine this is a big part of what is funding the (significant) R&D costs for Starship and Raptor.

bumby 5y ago
I agree. Although the space industry does have various ways of measuring the cost uncertainty, including the cost covariance in a complex system. (A good book on this is Probability Methods for Cost Uncertainty Analysis) >A lot of these questions will only be answered with time and experience. I guess that's a bit of what I was poking at. In my mind, there's still a lot of uncertainty with the cost claims, but I see so many people talking about how it's going to bring launch costs down X% and they seem to say it with relative certainty. I have faith that SpaceX will make great strides in this, but at the moment it seems to be a big unknown, at least in terms of magnitude. My biggest worry is that every misstep will layer additional quality oversight that will drive up cost. An example being the strut failure from a few years back that was related to a supplier material issue. As a remedy, SpaceX now does additional supplier quality control checks. I can imagine a few decades of similar issues being fixed may drive their processes to be more costly.