Author Topic: Reuse business case  (Read 136108 times)

Online Robotbeat

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Re: Reuse business case
« Reply #80 on: 01/03/2016 01:36 AM »
...
The conclusion is clear.  Returning the booster to the launch site significantly degrades the business case relative to barge landing....
This is not a good analysis.

Let me show you why.

SpaceX, like ULA, fields payloads of varying mass and energy requirements. Only a subset requires full expendability. Those that don't need fully expendability of the Falcon 9 can get by with barging. Those that don't need the performance even of barging can do RTLS. You could do a fully expendable rocket each time, but you'll be wasting the rocket and wasting money. It's pointless to compare versus $/kg for each payload, because you don't pay per $/kg, you pay per payload delivered. You don't have the option of packing a rocket full for every flight.

You and ULA should understand this. That's why you're launching Insight (at some point in time??) from the West coast at a huge performance loss. The fact that you have a big performance loss is irrelevant because even with the hit of launching an interplanetary mission from the West coast, Atlas V 401 has plenty of performance for Insight.

Or to put it another way: The $/kg for a West coast launch is way worse than an East coast launch, but that's irrelevant because any extra performance would be wasted anyway and a little money can be saved due to the West coast pad being more available (at least, I think that's why you're launching on the West coast).

SpaceX needs incredibly fast turnaround times for their future missions. Actual single-day turnarounds, in the long-run. That makes a barging more expensive because it'd slow down the turnaround time too much.
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Offline Lar

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Re: Reuse business case
« Reply #81 on: 01/03/2016 01:44 AM »
I'm bumping this thread in honor of SpaceX's successful landing of the booster at the landing site.  I admire the technological accomplishment.  But the challenge of reuse has never been technological.  It is getting a reasonable business case to close.

I believe the takeaway from the 4 pages of discussions above is that the basic equation is valid and that the analysis of barge landing is reasonable.  Conclusion of that analysis was that 10 uses of the booster breaks even in terms of $/kg, 20 uses saves 5%.  Not exactly revolutionary.

Here I want to address two additional questions:
1) What is the influence of overall launch rate?  This question came up in the prior discussion.
2) How does landing at the launch site change the analysis?  Is it better or worse?

Answer 1)  One simple way to understand the influence of rate on launch cost is to think of fixed costs and variable costs.  Fixed costs are relatively high in the launch industry due to the scale of the operations required.  One data point I can offer is that at a 10 per year rate (roughly what Atlas is doing now) about 40% of the unit cost is a 1/10th share of the annual fixed cost.  If the rate doubles to 20 per year, each launch gets only half as much fixed cost and the overall unit cost would decrease by 20%.  Pretty simple.

For the barge launch,  I assumed 40% for the fraction of total launch service cost represented by booster production cost.  If another 40% is fixed cost, then doubling the launch rate increases the booster fraction to 50%.  This improves the business case, so that the breakeven point is down to 5 uses and twenty uses results in a 15% overall savings.

So launch rate is an important consideration and the reuse business case improves with increasing launch rate.  But it is not revolutionary.  Even in the limit of no fixed cost allocation (infinite launch rate) breakeven is 3 and the 20 use savings is 35%.

Answer 2)  According to SpaceX, (need reference)  90 klbs prop is reserved for barge landing, 200 klbs for return to launch site.  Performance loss is not linear with respect to propellant withheld, so let me be somewhat conservative.  Assume overall performance loss is 50% for return to launch site. (I would love to see some info from SpaceX to verify.)  What is clear is that reserving another 110klbs of propellant will further degrade performance.  The cost savings in doing so is a reduction in recovery cost.  You save the cost of the barge.  On the other hand, you pick up the fixed cost of the recovery site.  I will give the benefit of the doubt by assuming the overall cost of recovery and refurb can be reduced by half.   Even so, this is small compensation for losing another 20% performance.

Plugging these numbers into the formula you find that you never break even.  The best you can do after 20 uses is a 30% $/kg increase.  If you increase launch rate to 20 per year, you can reduce your loss to only 13%.  Not very promising. 

The conclusion is clear.  Returning the booster to the launch site significantly degrades the business case relative to barge landing.  And the business case was tough to begin with. A bit premature to be trumpeting a new age in spaceflight. 

Dr. Sowers, it is always a pleasure to read your posts. But I think you are overestimating refurbishment costs and fixed costs. I'm not sure that the costs ULA faces will apply to  SpaceX.... SpaceX seems intent on reducing these costs at every opportunity.

It may take some capex to get the costs down, to be sure, but I think in the long run 40% is vastly overestimating refurbishment cost. I would be surprised if they were satisfied with 10% for refurbishment....  Remember, their model is gas'n'go.... This is where returning the whole booster may be ahead of an engines only plan, which requires a lot of reassembly, comparatively speaking, driving up cost.

I also think you may be overestimating the long term fixed costs that SpaceX will be facing. They have demonstrated they can develop boosters and facilities for a far lower cost than the competition can, if we can believe the numbers they share publicly. Boca Chica, a greenfield site, will really tell the tale of whether they can pull this off. It will be hard to estimate their true costs (as I am sure that is highly proprietary information) but some astute estimates surely will be forthcoming.

Quote
The real revolution will occur when we can source propellant off earth.

Yes. 1000000% agreement with this.

Please hurry up and get ACES and IVF flying in production. This is something where you are far ahead of your rivals. Please please... Go to your masters at Lazy B and LM and beg them to unleash you in this area. :)
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Offline rayleighscatter

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Re: Reuse business case
« Reply #82 on: 01/03/2016 02:18 AM »
SpaceX needs incredibly fast turnaround times for their future missions. Actual single-day turnarounds, in the long-run.
That's quite.... ambitious.

Offline joek

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Re: Reuse business case
« Reply #83 on: 01/03/2016 03:33 AM »
...
The conclusion is clear.  Returning the booster to the launch site significantly degrades the business case relative to barge landing....
This is not a good analysis.
...
If sourcing propellant from Earth surface to LEO it is a reasonable for performing relative trades using $/kg as the FOM.  For payloads which are not easily fungible and not expressed simply in $/kg terms, the model may (likely will) lead to erroneous conclusions.  This was addressed in the previous round of discussions.

Quote
...
SpaceX needs incredibly fast turnaround times for their future missions. Actual single-day turnarounds, in the long-run. That makes a barging more expensive because it'd slow down the turnaround time too much.
It depends on the "pipeline" depth and how much you can afford to keep the pileline full (inventory) to maintain a given level of throughput.  Having a stage available every 8 hours does not require a turnaround time of 8 hours.

It may take some capex to get the costs down, to be sure, but I think in the long run 40% is vastly overestimating refurbishment cost. I would be surprised if they were satisfied with 10% for refurbishment....  Remember, their model is gas'n'go.... This is where returning the whole booster may be ahead of an engines only plan, which requires a lot of reassembly, comparatively speaking, driving up cost.
40% is the initial S1 contribution to launch cost.  Recovery+refurbishment costs for F9 S1 are ~10% based on the original model for barge landing (p=1.43); RTLS halves that to 5% but performance is also reduced.

In short, the recent numbers from Dr. Sowers (assuming the same model) shows that RTLS trades less favorably than barge landings on a $/kg basis.  That is all it says; no more and no less.

That is not to say the model is not useful.  It is interesting and provides a good basis for incorporating your own refinements or testing assumptions.  Don't think $/kg to LEO is a good metric?  Then run the numbers for your favorite market segment and see how it looks.

Offline su27k

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Re: Reuse business case
« Reply #84 on: 01/03/2016 07:25 AM »
Here's the revised spreadsheet that removes the invalid assumption that reusable has to fly the same number of times as expendable, instead it tries to constraint the business case in much more reasonable terms: either reusable must match expendable's total performance (total mass to orbit), or reusable must match expendable's total cost.

The result is a huge improvement of reuse index, basically reusable system would always beat expendable system, even when performance ratio is 2. When performance ratio is 1.43, assuming annual production of 3 cores and 3 expendable flights, reusable would give a saving of 15% to 30%, depending on whether you match total performance or total cost.

Looking at the launch rate, you do need about 2x the launch rate of expendable system to realize the biggest savings (N=19 for reusable vs N' = 10 for expendable), but what you may not realize is the reusable system can launch at 2x the launch rate using the same total cost as expendable system. Basically by switching to resusable you can double your launch rate for free, just think about what this could mean if most your customers don't care about $/kg.

Offline Oli

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Re: Reuse business case
« Reply #85 on: 01/03/2016 08:35 AM »
...just think about what this could mean if most your customers don't care about $/kg.

Why should customers not care about $/kg?

If the payload is to big for a FH they can book a F9.
If its too big for a F9 they can book a Soyuz.
If its too big for a Soyuz they can book a Vega.
If its too big for a Vega they can book a LauncherOne.

There's also the option to launch multiple payloads on the same rocket.

You act as if there are no alternatives to launching on a too big rocket.
« Last Edit: 01/03/2016 08:36 AM by Oli »

Offline tobi453

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Re: Reuse business case
« Reply #86 on: 01/03/2016 08:38 AM »
Arianespace's Soyuz is more expensive than Falcon 9.

Offline Dante80

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Re: Reuse business case
« Reply #87 on: 01/03/2016 10:54 AM »
...just think about what this could mean if most your customers don't care about $/kg.

Why should customers not care about $/kg?

If the payload is to big for a FH they can book a F9.
If its too big for a F9 they can book a Soyuz.
If its too big for a Soyuz they can book a Vega.
If its too big for a Vega they can book a LauncherOne.

There's also the option to launch multiple payloads on the same rocket.

You act as if there are no alternatives to launching on a too big rocket.

The idea here (for SpaceX) is whether the F9/FH combo can cover a large pie of the market in a cost effective way. $/kg matters when you are transporting easily dividable cargo, like propellant or supplies. For a customer in the satellite business, what matters is how cheaper you can launch his X,XXXkg payload to orbit.

One may assume that a mission in a re-usable F9 might be more expensive than doing so in an expendable smaller rocket. This assumption is not very easy to substantiate, given the current (not future if re-usability pans out) SX prices. This might easily change though.
« Last Edit: 01/03/2016 11:02 AM by Dante80 »

Offline AncientU

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Re: Reuse business case
« Reply #88 on: 01/03/2016 12:26 PM »
Expendable smaller rockets are not on the table in this trade space.
(Dollars per kilogram they deliver is among most expensive in the market, too.)
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Offline su27k

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Re: Reuse business case
« Reply #89 on: 01/03/2016 12:56 PM »
...just think about what this could mean if most your customers don't care about $/kg.

Why should customers not care about $/kg?

If the payload is to big for a FH they can book a F9.
If its too big for a F9 they can book a Soyuz.
If its too big for a Soyuz they can book a Vega.
If its too big for a Vega they can book a LauncherOne.

There's also the option to launch multiple payloads on the same rocket.

You act as if there are no alternatives to launching on a too big rocket.

Of course there're alternatives, but picking an alternative is never as simple as comparing $/kg. The point is how reusability business case will work out is a lot more complicated than a simple $/kg number, just looking at $/kg is missing the bigger picture.

What reusability gives you is this: It couldn't do much to reduce your total cost since a lot of that is fixed, but it could allow you to dramatically increase the # of launches you can conduct at very little (or no) additional cost, with the caveat that each launch loses some performance. Of course we know this since the Shuttle days, what we may be able to see is how a businessman can wield reusability in the marketplace, and it's not going to be about $/kg.

Here's an example, let's pick the last line in spreadsheet, 3 cores, 16 recoverable/reused launches, 3 expendable launches. How would you sell this in the market? Here's one way to do it: you can sell the 1st launch of 3 cores at expendable price, probably to NASA/USAF who still believes 1st use is safer and their payloads don't exceed the reusable performance. Then you can sell the next 14 reusable launches at 50% of the expendable price, this would allow you to cover all the cost. What about the last 2 launches? You can basically give it away for free and still maintain your bottomline. This is the kind of pricing power reusability can give you.

Offline Rocket Surgeon

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Re: Reuse business case
« Reply #90 on: 01/03/2016 01:16 PM »
Dr. Sowers, thanks you very much for this spreadsheet, I find it incredibly interesting.

I have a question that other might want to answer and I've yet to see discussed. The issue I see here isn't with the analysis, and given that Dr. Sowers is the VP of Advanced Programs at one of the worldís leading rocket buildersÖ I think we can assume he knows what he is talking about and I doubt we'll easily be able to find a flaw.

No, the issue I see is in the bigger picture, in the fact that this is a parametric study. This is comparing a boost-back Vulcan to a SMART recover Vulcan or a boost-back Falcon 9 to SMART recovery Falcon 9, both at Unit Cost of an Expendable. There is far more at play here. So letís take this up to LEO and look at the big picture!

Consider the following. The 1.512 value for a boost-back design (Scenario 1) for the first launch corresponds to SpaceX's current launch price. I.E. This value corresponds to the ~$65 million cost of launching now. Consider the effect, not on the payback, but on the launch costs. I will assume that there is no flaw in the analysis, and merely use the current numbers for the Falcon 9 as a starting point. Yes, it takes longer for SpaceX to make the breakeven point compared to an expendable, but at the end, after 10 flights, the price has dropped to ~$42 million for the current performance (an average cost over this period is $47million)

(I calculated this by using the ratio of the change between the data points and multiplying that by the previous cost (i.e. Launch 2 = Launch 1* (1.247/1.512), Launch 3 = Launch 2*(1.150/1.247) etc. for the Boost-back column). Now Iíve probably buggered up something here, and if I have, please correct me and ignore the below.)

Essentially I am arguing that the current Falcon 9 launch costs is already far above where it would be for a comparable expendable, given that it is designed to be Reusable already. Given how cheap the Falcon 9 is, that is really saying something.

So what about Vulcan? Though it is not flying, letís use the numbers we have, I.E. $90 million for a starting launch (half a bare-bones Atlas V per Wikipedia). In this case, this corresponds to the 1.069 for the SMART reuse first launch (Scenario 2). After 10 launches the price drop isnít quite as much, with the price falling to ~$76 million. (an average over this period is $77.3 million) This is a reduction in $14 million as opposed to $18 million.

While for a Unit Price Comparison, the picture looks better for the SMART, but once real world numbers come in, it poses an interesting problem for ULA. How do you compete with a Falcon 9 that is 34% cheaper than its current cost?

Just for fun, if you assume the same curve for the Falcon Heavy as the Falcon 9 (which, fortunately, has the same predicted starting price as the Vulcan, $90 million) than a real saving takes place. The price drops form $90 million to ~$59.3 million, or a drop of over $30 million dollars. Essentially, Falcon Heavy + boost back means you can have Ariane 5 GS performance to GTO, for Falcon 9 Prices! So is this 'revolutionary'... no, but it does allow for a series of evolutionary steps where stagnation was all we had before and my money would be on Booster-back to allow more steps in future.

Now, given that Reuse is such a low priority for ULA, I donít think that this issue will be a battle between SMART or Boost-back. The issue will be whether or not ULA ever gets a chance to demonstrate it. I mean, in 8 years, SpaceX has enough time to try boost-back into the dirt, give up and start again using SMART if they want to. I feel that if SMART was implemented NOW(!) then this discussion would be valid, but in 8 years, it may have a hard time proving itís worth when the world is expecting rockets to return to the launch site and landÖdonít forget, something Blue this way comes as well.



Offline Oli

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Re: Reuse business case
« Reply #91 on: 01/03/2016 03:11 PM »
Here's an example, let's pick the last line in spreadsheet, 3 cores, 16 recoverable/reused launches, 3 expendable launches. How would you sell this in the market? Here's one way to do it: you can sell the 1st launch of 3 cores at expendable price, probably to NASA/USAF who still believes 1st use is safer and their payloads don't exceed the reusable performance. Then you can sell the next 14 reusable launches at 50% of the expendable price, this would allow you to cover all the cost. What about the last 2 launches? You can basically give it away for free and still maintain your bottomline. This is the kind of pricing power reusability can give you.

If you've got so many customers who are fine with reduced performance you can make a downscaled, cheaper rocket for them. Without all the reusability baggage. Might be cheaper, or not.

Fact is, there's no way around $/kg. Its the only viable metric for such a simplistic analysis. Surely SpaceX won't revolutionize the launch market without massively lowering $/kg.




Offline AncientU

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Re: Reuse business case
« Reply #92 on: 01/03/2016 03:20 PM »
Here's an example, let's pick the last line in spreadsheet, 3 cores, 16 recoverable/reused launches, 3 expendable launches. How would you sell this in the market? Here's one way to do it: you can sell the 1st launch of 3 cores at expendable price, probably to NASA/USAF who still believes 1st use is safer and their payloads don't exceed the reusable performance. Then you can sell the next 14 reusable launches at 50% of the expendable price, this would allow you to cover all the cost. What about the last 2 launches? You can basically give it away for free and still maintain your bottomline. This is the kind of pricing power reusability can give you.

If you've got so many customers who are fine with reduced performance you can make a downscaled, cheaper rocket for them. Without all the reusability baggage. Might be cheaper, or not.

Fact is, there's no way around $/kg. Its the only viable metric for such a simplistic analysis. Surely SpaceX won't revolutionize the launch market without massively lowering $/kg.

What aspect of reusability is baggage?
In the same regard, isn't making a new rocket every launch baggage, too?

Hint: 'That's the way it has always been done' is not a full credit answer.
« Last Edit: 01/03/2016 03:22 PM by AncientU »
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Offline Oli

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Re: Reuse business case
« Reply #93 on: 01/03/2016 03:47 PM »
So launch rate is an important consideration and the reuse business case improves with increasing launch rate.

Can we say that in general?

For I we have(*):

I = [F(n)*C(B) / n + C(RHW) / n + C(RR) + C(~B)] / [C(B) + C(~B)]

I guess a higher launch rate will lower all costs: C(B), C(RHW), C(RR) and C(~B). It doesn't seem obvious to me whether I will increase as a result of a higher launch rate or not.

What we can safely say though is that more n is always good. If n goes to infinity, reusability will always pay off as long as C(RR) > C(B).

(*)
C(RHW) is the cost of the reuse hardware (legs, wings, HIAD, parafoil etc.). Shouldn't that increase with n? If the booster is reused more often the production rate of RHW decreases which should increase the cost per RHW.
« Last Edit: 01/03/2016 03:54 PM by Oli »

Offline joek

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Re: Reuse business case
« Reply #94 on: 01/03/2016 05:19 PM »
Fact is, there's no way around $/kg. Its the only viable metric for such a simplistic analysis. Surely SpaceX won't revolutionize the launch market without massively lowering $/kg.

You can reduce or eliminate the reuse payload penalty for certain payload masses to see how it might affect certain markets.  That is, if the payload is within the "no reuse mass penalty" envelope, set Pe/Pr = 1.0.  The attached chart below shows two plots:
A. No payload reuse penalty: Pe/Pr = 1.0.
B. Every kg lost to reuse costs: Pe/Pr = 1.43 (original assumption)
With the exception of setting Pe/Pr=1.0 in (A), all values are the same as presented in Dr. Sowers original scenario for F9 barge landings.

If you are buying a launch for which the payload fits in (A), it is much more relevant than (B).  For example, a GTO launch such as SES-9, a CRS mission, or other discrete payloads.
« Last Edit: 01/03/2016 05:22 PM by joek »

Online Robotbeat

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Re: Reuse business case
« Reply #95 on: 01/03/2016 05:58 PM »
Here's an example, let's pick the last line in spreadsheet, 3 cores, 16 recoverable/reused launches, 3 expendable launches. How would you sell this in the market? Here's one way to do it: you can sell the 1st launch of 3 cores at expendable price, probably to NASA/USAF who still believes 1st use is safer and their payloads don't exceed the reusable performance. Then you can sell the next 14 reusable launches at 50% of the expendable price, this would allow you to cover all the cost. What about the last 2 launches? You can basically give it away for free and still maintain your bottomline. This is the kind of pricing power reusability can give you.

If you've got so many customers who are fine with reduced performance you can make a downscaled, cheaper rocket for them. Without all the reusability baggage. Might be cheaper, or not.
...
Not likely to be cheaper to have a totally different rocket with smaller payload. Smaller rockets have worse $/kg in general. An exceptional example: Pegasus costs like $35-40 million for half a ton to orbit. RTLS F9 would cost about the same (perhaps less) but should get over 10 times that much to orbit.

With this graded reuse strategy, SpaceX can launch basically 40 launches per year with the same platform without having to greatly expand production from where they are right now. Falcon Heavy for the largest payloads, but F9 RTLS for the smallest. That's a very efficient strategy, not too dissimilar to ULA's dial-a-rocket approach but usable for far smaller (read: lowest cost) payloads and with only having to deal with 1 propellant combination instead of 3 for ULA (solids, kerolox, hydrolox).
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Online Robotbeat

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Re: Reuse business case
« Reply #96 on: 01/03/2016 06:04 PM »
Possible strategy to make first stage reuse make even more sense while not being stuck with manufacturing overhead:

Make like 30 reusable boosters. Make 300 upper stages. Operate full-throttle, 4 shifts, etc. When those are all made, shut down production, retool for the next-generation vehicle.

In this case you're not realizing a huge profit right away from pursuing reuse, but it does enable you to make what would otherwise be an impractical capital investment without more cost than it would for expendable rockets. So you're generating the profit in the form of having a next-generation vehicle production line starting up almost a decade earlier than you otherwise would be able to.
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline Alf Fass

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Re: Reuse business case
« Reply #97 on: 01/03/2016 06:09 PM »
The actual performance loss will be less than that calculated because each launch of an expendable system does not carry its maximum possible payload, though with piggy-backing small payloads maybe actual payload gets close to theoretical payloads these days?

In other words if SpaceX was launching a payload that weighed 30% less than the expendable launch capacity and that payload wasn't going to grow by using the rocket in expendable mode the 30% loss ("Shotwell statement during Hawthorne tour that barge recovery results in a 30% performance loss. 1/0.7=1.43") never happens.
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Offline GWH

Re: Reuse business case
« Reply #98 on: 01/03/2016 06:31 PM »
Possible strategy to make first stage reuse make even more sense while not being stuck with manufacturing overhead:

Make like 30 reusable boosters. Make 300 upper stages. Operate full-throttle, 4 shifts, etc. When those are all made, shut down production, retool for the next-generation vehicle.

In this case you're not realizing a huge profit right away from pursuing reuse, but it does enable you to make what would otherwise be an impractical capital investment without more cost than it would for expendable rockets. So you're generating the profit in the form of having a next-generation vehicle production line starting up almost a decade earlier than you otherwise would be able to.

Also utilize flyback boosters for a tri core rocket, leverage growth in new market place (larger payloads to high energy orbits). Now with reuse in small  amounts the addition of tri core production for new rocket will result in a flat, rather than decreasing manufacturing rate.  Production costs don't increase on a per core basis. Mid term production rates can be maintained if upper stage is virtually same construction as booster cores.
I think there is also a lot to be said for what flyback reusable boosters can offer in comparison to strap on solids by eliminating a product that is completely separate in construction and handling procedures.

Offline joek

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Re: Reuse business case
« Reply #99 on: 01/03/2016 06:42 PM »
Possible strategy to make first stage reuse make even more sense while not being stuck with manufacturing overhead:
...
You have just moved the manufacturing value add to inventory, with consequent increase in carrying costs.  Minimizing such inefficiencies is one reason for JIT or "on-demand" production.  A separate thread would be appropriate for that discussion.

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