The Economics of Naval Ship Automation

An Analysis of Proposed Automation of the DE-1052

by Robert Shishko

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Proposed automation of the DE-1052 class destroyer escort is analyzed as an investment problem. Interesting features of the analysis include manning structures for alternative DE-1052 configurations, a cost model for enlisted naval personnel, and sensitivity calculations of the present discounted value (PDV) with respect to the discount rate, the cost of the automation, and shifts in the wage-rental ratio over the span of the investment. The analysis confirms the obvious point that the desirability of any particular automation scheme depends not only on the number of individuals but on the kinds of individuals saved. While total automation of the DE-1052 does not seem worthwhile in terms of the PDV, selected automation of certain functions may be. Further, the economics of automation of future naval ships is quite a bit more favorable than automation of existing ships.

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