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The Resource New approaches to defense inflation and discounting, Kathryn Connor, James Dryden

New approaches to defense inflation and discounting, Kathryn Connor, James Dryden

Label
New approaches to defense inflation and discounting
Title
New approaches to defense inflation and discounting
Statement of responsibility
Kathryn Connor, James Dryden
Creator
Contributor
Publisher
Subject
Language
eng
Summary
Inflation indices and discount rates are necessary tools in the Department of Defense's acquisition process, as the final selection of a system is partially based on potential increases in sustainment costs (inflation) and the present value of future costs (discounting). Inflation indices built for DoD use very broad categories that include operations and maintenance (O & M) as well as manpower, procurement, and research and development. This study addresses the question of how well current inflation indices and discount rates are serving DoD weaponsystem program management. It investigates inflation rates for parts for the Abrams tank and the Bradley armored personnel carrier and shows that the two weapon systems, while both ground systems, experience inflation differently. Although government decisionmaking can benefit from discounting (taking into account the time value of money), choices made using discounted cash flows are not always the least expensive for DoD. Its O & M estimating strategies should be reviewed to reflect changing repair and other costs, since a range of reasonable courses of action exists for many DoD investment decisions. Recommendations for the Office of Cost Assessment and Program Evaluation to consider when evaluating the inflation and discounting policies that impact the long-term affordability of DoD programs include (1) revisiting O & M costs annually with a 5-year moving-average inflation, to reflect changing repair and other costs; (2) highlighting the role of supply chain surcharges in parts costs in cost estimates used to inform program financial analysis; (3) expanding analysis of investments to ensure consideration of least-cost outcomes
Member of
Cataloging source
DID
http://library.link/vocab/creatorName
Connor, Kathryn
Dewey number
355.6/212
Funding information
The research described in this report was prepared for the Office of the Secretary of Defense (OSD) ... under Contract W74V8H-06-0002.
Illustrations
illustrations
Index
no index present
LC call number
UC263
LC item number
.C636 2013
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
  • technical reports
http://library.link/vocab/relatedWorkOrContributorName
  • Dryden, James
  • National Defense Research Institute (U.S.)
  • Rand Corporation
Series statement
RAND Corporation research report series
Series volume
RR237
http://library.link/vocab/subjectName
  • United States
  • United States
  • United States
Label
New approaches to defense inflation and discounting, Kathryn Connor, James Dryden
Instantiates
Publication
Copyright
Bibliography note
Includes bibliographical references (pages 41-42)
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Contents
Introduction -- Cost Inflation of Ground-Vehicle Parts -- The Value of Discounting -- New Approaches to Inflation and Discounting -- Appendix: Inflation Estimates over Time
Extent
1 online resource (xix, 42 pages)
Form of item
online
Isbn
9780833081339
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other physical details
illustrations.
Specific material designation
remote
Label
New approaches to defense inflation and discounting, Kathryn Connor, James Dryden
Publication
Copyright
Bibliography note
Includes bibliographical references (pages 41-42)
Carrier category
online resource
Carrier category code
  • cr
Carrier MARC source
rdacarrier
Content category
text
Content type code
  • txt
Content type MARC source
rdacontent
Contents
Introduction -- Cost Inflation of Ground-Vehicle Parts -- The Value of Discounting -- New Approaches to Inflation and Discounting -- Appendix: Inflation Estimates over Time
Extent
1 online resource (xix, 42 pages)
Form of item
online
Isbn
9780833081339
Media category
computer
Media MARC source
rdamedia
Media type code
  • c
Other physical details
illustrations.
Specific material designation
remote

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