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Consistent with U.S. Department of Defense acquisition policy since 2003, U.S. Army leadership has called for consideration of lifecycle cost at system design and technology development stages so that adjustments can be made early enough to ensure affordability. This study developed and demonstrated a method and model to incorporate lifecycle cost into the portfolio analysis and management process for Army Science and Technology programs. The linear programming model developed here can select an optimized portfolio of Science and Technology projects to meet all individual capability requirements at the lowest total remaining lifecycle cost. The study results demonstrate several applications important to the management of Army Science and Technology programs, as well as estimation methods for the contribution of Science and Technology projects to capability requirements and for cost components.

Table of Contents

  • Chapter One


  • Chapter Two

    The Current DoD Acquisition Policy

  • Chapter Three

    Description of Our Evolutionary Method

  • Chapter Four

    Estimation of Input Parameters

  • Chapter Five

    Applications to S&T Portfolio Management

  • Chapter Six

    Findings and Recommendations

  • Appendix A

    Additional Information on Army Acquisition Categories and Combat Developer

  • Appendix B

    Estimation of Expected Values

  • Appendix C

    Estimation of Marginal Unit Cost, Number of Units, and Marginal Operating and Maintenance Cost

  • Appendix D

    Universal Curves for Estimation of the Remaining Lifecycle Cost for Components

  • Appendix E

    Choosing Essential ATOs Across a Wide Range of Capability Requirements

  • Appendix F

    Insensitivity of Model Results to Detailed Estimation of Remaining Lifecycle Cost

Research conducted by

The research described in this report was sponsored by the United States Army and conducted by RAND Arroyo Center.

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