9.28 average annual inflation rate of 10.4%, and this inflation rate allowE a calculation of shuttle launch costs in 1976 dollars, the common base year for costs in this report. The average 1976 launch cost for the space shuttle is found from this to be $17.2 million per flight. This is an average mission cost, including both direct and indirect overhead costs, but not including the research and development or the procurement costs of the shuttle vehicle. These average costs are taken over a current mission plan of 582 flights in the period of 1980 - 1990 (9.1). Average costs over a large number of missions are dependent on the so-called "learning curve". The concept behind this economic technique is that an increased production run allows for increased tooling, and more experience on the part of the construction workers. Aerospace products have almost universally followed an 80% learning curve: that is, the average unit price drops by 20%, to 80% of the original unit price, every time the production run is doubled. Given an initial unit price, the average unit price over arbitrary production runis(9.14): ( $average) (1/.68) x ($initial/ x (nUI!lber of units)-· 32 This same concept is applicable to costs incurred as a result of any repetitive operation, not only those associated with production. This would include the recurriny costs associated with launch operations. It has been stated previously that the current projected costs for space shuttle operations are $17.2 million per flight, averaged over the 582 flights in the current traffic model. Using these figures in the above equation, the equivalent initial launch cost is $89.7 million. This initial cost can be used along with the total number of space shuttle flights in order to find the new unit average mission costs associated with the increased utilization of the space shuttle system.
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