Systems Engineering

Cost represents the net resource inputs to a project from outside the system. Space projects don't use Dollars or Euro directly, but rather use them to pay for labor, materials, and services they do use. So cost is a measure of flows across the system boundary, rather than an internal property of the system. Every system will consume some resources during its life, but funding sources are not unlimited. So cost limits are almost always considered a requirement, whether implicitly or explicitly. Total cost over the entire life of the project is called Life Cycle Cost. This can be further broken down into development, production, and operations costs, and then accounted in much greater detail across the system elements. In addition to total cost, limits can be placed on spending rates. This is most explicit in government agency budgets, but even private projects have limits on spending per year. Some systems generate revenue to offset costs. When revenues exceed cost, the system as a whole generates a profit in financial terms. Revenue may be delayed until after the design and construction phases and the system begins to operate. The peak net cost accumulated until revenues exceed expenses is described as Capital or Development Costs. Customers generally want high performance and low cost, so the ratio of performance/cost is often a key measure for a project.