Value-based multidisciplinary optimization for commercial aircraft design and business risk assessment

Traditional commercial aircraft design attempts to improve performance and reduce operating costs by minimizing takeoff weight. A better design approach also takes into account factors such as aircraft demand, market uncertainty, and development and manufacturing costs. This paper presents a design methodology that integrates an aircraft performance model with a program valuation technique based on real options theory to address uncertain market demand and managerial flexibility. The coupled performance/financial framework enables an integrated approach to technical design and programmatic decisions. In addition, the methodology provides a framework for specification of design requirements and for quantification of the financial implications associated with technical and business uncertainty. The methodology is demonstrated for an aircraft design example of the blended-wing-body concept. Comparing performance-optimized and value-optimized designs, we show that use of value as a design metric leads to a trade-off between aerodynamic efficiency and reduced manufacturing costs. Key findings demonstrate that traditional financial metrics cause the decision maker to focus overly on reducing costs in the short term. The stochastic methodology shows that a willingness to spend up-front money in the design process to ensure long-term profitability is a better strategy.