APPENDIX A - Beyond Cost Models, System Utility or Revenue Models: Example of a Communications Satellite

Summary

PREVIEW AND GUIDE TO THE APPENDIX

How does one build a utility or revenue model for an engineering system? The solution may not be a simple, universal, one-size-fits-all model. The investigation and building of a revenue model for a particular system is, however, revealing. In this Appendix, the modeling of a communications satellite is considered as an example in order to avoid the two equally unsatisfying choices of a superficial treatment of the subject matter and an abstract analytical exposition of the subject matter.

This Appendix shows how to build revenue models for communications satellites. The motivation for this work is the proposition that satellites, like any other complex engineering systems, should be designed both for technical merit and also as value-delivery artifacts. And the value delivered, or the flow of service that the system delivers over its design lifetime, whether tangible or intangible, deserves as much effort to quantify as the system's cost.

Introduction

The previous chapters argued that engineering systems should be conceived of not only as technical achievements but also as value delivery artifacts. And the value delivered, or the flow of service that the system would deliver over its design lifetime, whether tangible or intangible, deserves as much effort to quantify as the system's cost. This is one of the main arguments of this work. The following pages elaborate on this proposition. But how does one build a utility or revenue model for an engineering system?