A MODEL FOR ESTIMATING THE COST TRADEOFFS ASSOCIATED WITH OPEN ELECTRONIC SYSTEMS

Abstract

An open systems approach (OSA), especially when used in conjunction with modular architecture, reuse, and harnessing of existing (COTS or proprietary) technologies, is commonly associated with cost avoidances resulting from: more efficient design; increased competition among suppliers; more efficient innovation and technology insertion; and modularization of qualification. However, OSA strategies require investment and may increase risk exposure. To determine if openness should be pursued, and to what degree, a quantitative model assessing the costs associated with openness is required.

Previous attempts to measure openness rely on qualitative measures, and cannot be used to estimate the life cycle cost impacts of openness. The model developed in this thesis quantitatively determines the effects of openness on life cycle cost. The life cycle cost difference between two implementations with differing levels of openness was calculated for a case study of an ARCI sonar system, providing insight into the value of openness. The case study performed in this thesis provides the first known quantitative support for Abts' COTS-LIMO hypothesis that increasing CFD increases cost avoidance. However, these results challenge Henderson's implicit assumption that marginal openness is always positive (increasing openness is always beneficial).