Alternative Approaches to Using Peacetime and Wartime Costs in Limited War Cost-effectiveness Studies.

by J. J. Surmeier


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Peacetime costs are defined as those for developing, buying, and maintaining a wartime capability during peacetime. Wartime costs are those additional costs incurred by a weapon system once a war has begun. Two basic costing methods are used for cost-effectiveness analysis of limited war forces: (1) the Total Peacetime System Cost Approach, used by the Office of the Secretary of Defense, which depicts the total anticipated costs for the system over its expected life in peacetime; and (2) the Amortized Peacetime-Wartime Cost Approach, which includes both wartime and peacetime costs. The second method is questionable, since peacetime and wartime costs may be incommensurable. The preferred approach would be to present the alternatives to the decisionmaker with the incommensurable peacetime and wartime cost streams (estimated separately), allowing him to judge their relative importance. 13 pp.

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