Active/Reserve Cost Methodology

During the programming and budgeting phases of the federal budgeting process, military analysts are sometimes asked to evaluate the cost consequences of changing the mix of active and reserve units in the total force. To solve some of the chronic problems that can impede these analyses — vaguely defined proposed changes, difficult-to-obtain cost factors, insufficient time, and lack of agreement on methods — RAND developed a systematic structured framework. The framework is designed to assist in (1) translating force-mix proposals into fully specified cost problems, (2) calculating the full spectrum of costs implied by that specification, and (3) presenting the cost results in the context of changes in military capability. This report employs three case studies — the Air Force C-5 case, the Navy FF-1052 case, and the Army AH-64 case — to demonstrate the use of the framework. The report concludes that this active/reserve cost methodology will perform effectively in a variety of contexts.