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emptied the sandbox - previous content can now be found at Value-driven design
 
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[[Image:Aerospace_vehicle_examples.jpg|thumb|right|200px|Value-Driven Design, to date, has focused on aerospace systems]]

'''Value-driven design''' is a [[systems engineering]] strategy based on [[microeconomics]] which enables [[multidisciplinary design optimization]]. Value-driven design is being developed by the [[American Institute of Aeronautics and Astronautics]], through a program commitee of government, industry and academic representatives.<ref>{{cite web
| title = AIAA Program Committees
| url = http://www.aiaa.org/content.cfm?pageid=484
| accessdate = 2009-05-24}}
</ref> In parallel, [[DARPA | the US Defense Advanced Research Projects Agency]] has promulgated an identical strategy, calling it '''Value centric design''', on the [[Fractionated spacecraft | F6 Program]]. At this point, the terms value-driven design and value centric design are interchangeable. The essence of these strategies is that design choices are made to maximize system value rather than to meet performance requirements. Value-driven design is controversial because performance requirements are a central element of systems engineering.<ref>{{cite book
| author = Kapurch, Stephen J., et al.
| title = NASA Systems Engineering Handbook, NASA/SP-2007-6105
| publisher = Rev 1, page 43, National Aeronautics and Space Administration
| year = 2007
| url = http://education.ksc.nasa.gov/esmdspacegrant/Documents/NASA%20SP-2007-6105%20Rev%201%20Final%2031Dec2007.pdf
| accessdate = 2009-05-24}}
</ref> However, Value-Driven Design supporters claim that it can improve the development of large aerospace systems by reducing of eliminating cost overruns<ref>{{cite paper
| title = Value-Driven Design
| publisher = Aerospace America, Page 109, American Institute of Aeronautics and Astronautics, Reston, VA
| date = December, 2008
| url = http://www.aiaa.org/aerospace/Archives.cfm?ArchiveIssueid=107
| accessdate = 2009-05-25}}
</ref> which are a major problem, according to independent auditors.<ref>{{cite report
| first = Brian
| last = Mullins
| title = Defense Acquisitions: Assessments of Selected Weapon Programs
| publisher = GAO-08-467SP US Government General Accountability Office
| date = March 31, 2008
| url = http://www.gao.gov/products/GAO-08-467SP
| accessdate = 2009-05-24}}
</ref>
== Concept ==
Value-driven design creates an environment that enables and encourages design [[Optimization (mathematics) | optimization]] by providing designers with an objective function and eliminating those constraints which have been expressed as performance requirements. The objective function inputs all the important attributes of the system being designed, and outputs a score. The higher the score, the better the design.<ref name="opt">{{cite paper
| first = Paul
| last = Collopy
| title = Economic-Based Distributed Optimal Design.
| publisher = AIAA Paper 2001-4675. American Institute of Aeronautics and Astronautics, Reston, VA.
| url = http://www.vddi.org/opt.pdf
| date = 2001
| accessdate = 2009-05-24.}}
</ref> Describing an early version of what is now called value-driven design, George Hazelrigg said, "The purpose of this framework is to enable the assessment of a value for every design option so that options can be rationally compared and a choice taken."<ref NAME="hazelrigg">{{cite doi|10.1115/1.2829328}}
</ref> At the whole system level, the objective function which performs this assessment of value is called a "value model."<ref name="vaate">{{cite paper
| first1 = Paul
| last1 = Collopy
| first2 = Randy
| last2 = Horton
| title = Value Modeling for Technology Evaluation
| publisher = AIAA-2002-3622, American Institute of Aeronautics and Astronautics
| year = 2002
| url = http://www.vddi.org/vaate.pdf
| accessdate = 2009-05-25}}
</ref> The value model distinguishes value-driven design from Multi-Attribute Utility Theory applied to design.<ref name="thurston">{{cite doi|10.1109/17.62329}}</ref> Whereas in Multi-Attribute Utility Theory, an objective function is constructed from stakeholder assessments,<ref name="maut">{{cite book
| first1 = Ralph L.
| last1 = Keeney
| first2 = Howard
| last2 = Raiffa
| title = Decisions with Multiple Objectives: Preferences and Value Tradeoffs
| publisher = John Wiley & Sons, New York
| date = 1976
| page = 96
| url = http://books.google.com/books?id=GPE6ZAqGrnoC&printsec=frontcover&dq=decisions+with+multiple+objectives
| accessdate = 2009-05-25}}
</ref> value-driven design employs economic analysis to build a value model.<ref>{{cite book
|first = Paul
|last = Collopy
|title = Surplus Value in Propulsion System Design Optimization
|publisher = AIAA paper 97-3159, American Institute of Aeronautics and Astronautics, Reston VA
|date = 1997
|url = http://www.vddi.org/svp.pdf
|accessdate = 2009-05-25}}
</ref> The basis for the value model is often an expression of profit for a business, but economic value models have also been developed for other organizations, such as government.<ref name="vaate"/>

To design a system, engineers first take system attributes that would traditionally be assigned performance requirements, like the range and fuel consumption of an aircraft, and build a system value model that uses all these attributes as inputs. Next, the conceptual design is optimized to maximize the output of the value model. Then, when the system is decomposed into components, an objective function for each component is derived from the system value model through a sensitivity analysis.<ref name="opt"/>

A workshop exercise implementing value-driven design for a global positioning satellite was conducted in 2006, and may serve as an example of the process.<ref>{{cite paper
| first = Paul
| last = Collopy
| title = Value-Driven Design and the Global Positioning System.
| publisher = AIAA Paper 2006-7213. American Institute of Aeronautics and Astronautics, Reston, VA.
| url = http://www.vddi.org/gps.pdf
| date = 2006
| accessdate = 2009-05-24.}}
</ref>

== History ==
The dichotomy between designing to performance requirements versus objective functions was raised by Herbert Simon in his essay, "The Science of Design" in 1969.<ref>{{cite book
|first = Herbert A.
|last = Simon
|title = The Sciences of the Artificial
|publisher = Chapter 3, "The Science of Design," The MIT Press, Cambridge MA
|year = 1969
|url = http://www.amazon.com/Sciences-Artificial-Simon-Herbert/dp/B000UDMTJM/ref=sr_1_2?ie=UTF8&s=books&qid=1243312182&sr=1-2
| accessdate = 2009-05-25}}
</ref> Simon played both sides, saying that, ideally, engineered systems should be optimized according to an objective function, but realistically this is often too hard, so that attributes would need to be [[Satisficing |satisficed]], which amounted to setting performance requirements. But he included optimization techniques in his recommended curriculum for engineers, and endorsed "Utility theory and statistical decision theory as a logical framework for rational choice among given alternatives."

Utility theory was given most of its current mathematical formulation by [[John von Neumann|von Neumann ]] and [[Oskar Morgenstern|Morgenstern]]<ref>{{cite book
|first1=John
|last1=von Neumann
|first2=Oskar
|last2=Morganstern
|title=Theory of Games and Economic Behavior
|publisher = Page 17-31. Princeton University Press, Princeton NJ
|year = 1947
|url = http://books.google.com/books?id=L0Y4AAAAMAAJ&q=theory+of+games+and+economic+behavior&dq=theory+of+games+and+economic+behavior&pgis=1
| accessdate = 2009-05-25}}
</ref>, but it was the economist [[Kenneth Arrow]] who proved the Expected Utility Theorem most broadly, which says in essence that, given a choice among a set of alternatives, one should choose the alternative that provides the greatest probabilistic expectation of utility, where utility is value adjusted for risk aversion.<ref>{{cite book
|first = Kenneth J.
|last = Arrow
|title = Essays in the Theory of Risk Bearing
|publisher = Chapter 2, "Exposition of the Theory of Choice under Uncertainty," Markham Publishing, Chicago
|year = 1971
|url = http://books.google.com/books?id=BabCAAAAIAAJ&q=essays+in+the+theory+of+risk+bearing&dq=essays+in+the+theory+of+risk+bearing&pgis=1
| accessdate = 2009-05-25}}</ref>


Ralph Keeney and [[Howard Raiffa]] extended utility theory is support of decision making<ref name="maut"/>, and Keeney developed the idea of a value model to encapsulate the calculation of utility.<ref>{{cite book
|first = Ralph L.
|last = Keeney
|title = Value-Focused Thinking: A Path to Creative Decisionmaking
|publisher = Chapter 5, "Quantifying Objectives with a Value Model," Harvard University Press, Cambridge MA
|year = 1992
|url = http://books.google.com/books?id=WtNASm7O3fQC&printsec=frontcover&dq=value+focused+thinking
| accessdate = 2009-05-25}}
</ref> Keeney and Raiffa also used "attributes" to describe the inputs to an evaluation process or value model.

George Hazelrigg put engineering design, [[business plan]] analysis, and decision theory together for the first time in a framework in a paper written in 1995, which was published in 1998.<ref name="hazelrigg"/> Meanwhile, Paul Collopy independently developed a similar framework in 1997, and Harry Cook developed the S-Model for incorporating product price and demand into a profit-based objective function for design decisions.<ref>{{cite book
|first=Harry E.
|last=Cook
|title=Product Management: Value, Quality, Cost, Price, Profit and Organization
|publisher=Chapman & Hall, London
|year=1997
| url = http://www.amazon.com/Product-Management-quality-profit-organization/dp/0412799405/ref=sr_1_1?ie=UTF8&s=books&qid=1243311159&sr=1-1
| accessdate = 2009-05-25}}
</ref>

The [[MIT Engineering Systems Division]] produced a series of papers from 2000 on, many co-authored by Daniel Hastings, in which many utility formulations were used to address various forms of uncertainty in making engineering design decisions. Saleh et al.<ref>{{cite paper
| author = Saleh, Joseph H. et al.
| title = Flexibility and the Value of On-Orbit Servicing: New Customer-Centric Perspective
| publisher = Journal of Spacecraft and Rockets, Vol. 40, No. 2, pages 279-291
| date = March, 2003
| url = http://www.aiaa.org/content.cfm?pageid=318
| accessdate = 2009-05-25}}
</ref> is a good example of this work.

The term '''value-driven design''' was coined by James Sturges at Lockheed Martin while organizing the first workshop of what became, in 2006, the Value-Driven Design Program Committee of the AIAA.<ref>http://www.vddi.org/vdd-home.htm#WhereVDD</ref> Meanwhile, '''value centric design''' was coined independently by Owen Brown and Paul Eremenko of DARPA in the Phase 1 Broad Agency Announcement for the DARPA F6 satellite design program in 2007. <ref>http://webext2.darpa.mil/tto/solicit/BAA07-31/F6_BAA_Final_07-16-07.doc</ref>
Castagne et al.<ref>{{cite doi|10.1016/j.ijpe.2008.12.005}}</ref> provides an example where value-driven design was used to design fuselage panels for a [[regional jet]].

== Value Based Acquisition ==
Implementation of value-driven design on large government systems, such as NASA or ESA spacecraft or weapon systems, will require a government acquisition system that directs or incentivizes the contractor to employ a value model.<ref>{{cite paper
| author = Brown, Owen, and Eremenko, Paul
| title = Application of Value-Centric Design to Space Architectures: The Case of Fractionated Spacecraft
| publisher = Pages 29-31, AIAA-2008-7869, American Institute of Aeronautics and Astronautics
| year = 2008
| url = http://www.vddi.org/VCDM2008.pdf
| accessdate = 2009-05-24}}
</ref>
Such as system is proposed in some detail in an essay by Michael Lippitz, Sean O'Keefe, and John White.<ref>{{cite book
| author = Carter, Ashton B., and White, John P.
| title = Keeping the Edge: Managing Defense for the Future
| publisher = Chapter 7, pages 194-202, The MIT Press, Cambridge, MA
| year = 2000
| url = http://belfercenter.ksg.harvard.edu/publication/1799/keeping_the_edge.html
| accessdate = 2009-05-24}}
</ref> They suggest that "A program office can offer a contract in which price is a function of value," where the function is derived from a value model. The price function is structured so that, in optimizing the product design in accordance with the value model, the contractor will maximize its own profit. They call this system '''Value Based Acquisition'''.


==References==
==References==

Latest revision as of 03:58, 27 May 2009

today the sandbox is empty

References

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