Beginning of Military Cost Analysis 1950-1961

by David Novick

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The traditional way of looking at military procurement at the end of World War II was in terms of hardware. Fairly early, however, it seemed to some RAND researchers that other things--such as real estate, people, supply, and maintenance--were involved. This realization led to the concept now called weapon systems analysis, which includes the political, economic and social, and technical and military considerations that make up a total system. All of these elements have to be taken into account when pricing futuristic hardware proposals. This paper, which was originally presented as a talk at Science Applications, Inc., in Los Angeles in January 1979, traces the major steps in the evolution of the process that developed, by 1961, into program budgeting, which is still in place in the Department of Defense.

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