System and Total Force Cost Analysis

by David Novick

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A description of the aims, concepts, and methods of military cost analysis as developed by RAND's Cost Analysis Department. The publication is basically concerned with estimating costs for proposed military activities so that informed choices can be made among them. The study considers in detail the underlying principles of cost analysis and examines methods for analyzing the cost of total force structures as well as of individual systems. Cost categories are refined, particularly by providing categories for research and development activities which constitute an increasing share of system costs. By generalizing methods and examples, the analysis is extended to support and control systems as well as weapon systems. The usefulness of cost sensitivity analysis is explained and illustrated by examples, and methods are described for estimating system manpower requirements.

This report is part of the RAND Corporation Research memorandum series. The Research Memorandum was a product of the RAND Corporation from 1948 to 1973 that represented working papers meant to report current results of RAND research to appropriate audiences.

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