Running head: ANALYSIS OF DIRECT COSTS Friday, August 22, 2014

Analysis of Direct Costs

Kristin Velix
Professor Bartillomo
Strayer University
Introduction
Developing and building a drone is one thing while developing a navigation system is completely another aspect. A drone can be considered a toy without a well-engineered design and functional navigation system. The navigation system is mainly used to give commands to the drone to undertake actions that are compatible with the development of the drone. With all the funds that are put into the development of the drones, the navigation system is developed in manner that cannot be prone to outside interference like hackers, terrorist or anyone that …show more content…
It also crucial to note that, the drone navigation system will need constant maintenance and improvement, which is a continuous labor cost. The labor cost can be predicted to vary from $12 million to $16 million only on the system development without taking into consideration the maintenance labor cost.
Material cost of the drone navigation system may involve the use of highly specialized pieces of electronics and equipment. In some cases where drones are used for long distance missions, a satellite may be used. The material cost can be predicted to vary from $4 million to $7.5 million depending on the functionality of the drone. The main cost may be high but this is mainly due to the fact that it is being developed from scratch. After the navigation system is developed, it can be used on multiple drones with the only requirement of maintenance and upgrading the system. The main cost can be considered to be a one off cost that is extremely crucial. The total main cost will range from $16 million to $23.5 million and may need further analysis of hidden costs.
The direct cost is seen to be almost similar with extremely little difference in range. However the indirect costs have quite a big difference. VectorCal’s indirect cost will be quite minimal since they will adopt an already working rationale in