For this assignment you are to perform a life cycle cost analysis on system XYZ considering the following factors.System XYZ is installed in an

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System XYZ is a newly designed configuration packaged in three units (Unit A, Unit B. and Unit C). The specified requirements for each of the units are shown in the Figure below.  The only system level maintenance that is required is configuration of unit B following a corrective maintenance action of this unit. The configuration takes 15 minutes to complete.

The average System XYZ utilization is 4 hours per day, 365 days per year. One of the aircraft crew members will be assigned to operate several different systems throughout flight, and it is assumed that 10% of the crew member's time is allocated to System XYZ.   

Relative to the maintenance concept, System XYZ incorporates a built-in self-test that enables rapid system checkout and fault isolation to the unit level. No external support equipment is required at the aircraft. In the event of a no-go condition, the fault is isolated to the unit, and the applicable unit is removed, replaced with a spare, and sent to the intermediate-level maintenance shop (located at the operational base) for corrective maintenance. Unit repair is accomplished through module replacement, with the modules being discarded at failure. Scheduled (preventive) maintenance is accomplished on Unit A in the intermediate shop every 6 months. No depot maintenance is required; however, the

depot does provide backup supply and support functions as required.

The requirements for system XYZ dictate the program profile shown in the figure on the next page. Assume that the cycle cost are broken down into three categories represented by blocks in the program profile.

In an attempt to simplify the problem, the following additional factors are provided. Also, In the interests of simplicity, the effects of the total logistics pipeline and shop turnaround time on spares are ignored in this problem:

1.      RDT &E costs for System XYZ (to include labor and material) are $100,000 for year 1, $200,000 for year 2, and $250,000 for year 3.

2.      RDT&E costs for special support equipment are $50,000 in year 2, and $10,000 in year 3.

3.      System XYZ operational models are produced, delivered, and purchased in the year prior to the operational deployment need. System unit costs are Unit A = $6000, Unit B = $3000, and Unit C = $1000. Recurring and nonrecurring manufacturing costs are amortized on a unit basis.

4.      Production Support equipment is required at each intermediate maintenance shop at the start of the year when System XYZ operational models are deployed. In addition, a backup support equipment set is required at the depot when the first operational base is activated. The cost per set of support equipment is $20,000.

5.      Spares units are required at each intermediate maintenance shop at the time of base activation. Assume that 2 Unit A's, 1 Unit B, and 1 Unit C, are provided at each shop as safety stock. Also, assume that one spare System XYZ is stocked at the depot for backup support.

6.    System operator personnel costs are $12 per hour.

7.      For each maintenance action at the system level, one low-skilled technician at $9 per direct maintenance labor-hour is required on a full-time basis. M is 15 minutes. For each corrective maintenance action involving Unit A, Unit B or Unit C, two technicians are required on a full time basis. One technician is a low skilled labor at $9 per hour and the other technician is high skilled at $11 per hour. Direct and indirect cost are included in these rates. For each preventive maintenance action, one high skilled labor technician is required at $11 per hour

8.      Additional maintenance modules constitute spares and materials cost. Assume that material costs are $100 per corrective maintenance action and $50 per preventive maintenance action. This includes inventory maintenance costs. These material requirements are only at the module level (A, B and C) and not at the system level where configuration maintenance is performed.

Provide a solution to this this life cycle analysis using the attached template. In essence provide cost for each of the 10 years of operation in each of the categories summarized above and numbered as follows:

RDT & E COST:

1.      System XYZ RDT&E sub total cost

2.      System XYZ RDT&E support equipment sub total cost

Production Cost:

3.      Production & Manufacturing cost for unit A, B and C

4.      Production Support Equipment

5.      Spare Units

Operations & Maintenance

6.      System Operation Cost

7.      Maintenance Labor Cost

8.      Maintenance Material & Spares Cost

Calculate these cost based on the criteria number 1 through 8 and defined in the problem. Show all work on subsequent worksheets to substantiate cost calculations. Also, for total cost, calculate net present values at 10% discount rate assuming year 1 is time 0. Calculate each individual year NPV value as well as total value and incorporate onto the spreadsheet template.