This study proposes a new, more efficient way to address a central policy problem facing the U.S. Air Force: How much capital infrastructure should the Air Force own rather than lease through other providers? The study looks specifically at an Air Force base lodging operation and evaluates policies for efficient government-owned capacity levels and contract-quarters utilization. The Air Force currently spends $4 million per year at Maxwell Air Force Base to house students in local hotels because of insufficient on-base capacity. Meanwhile, annual on-base occupancy figures reveal slack capacity in on-base facilities of approximately 20 percent. This dissertation examines how Air Force decisionmakers should evaluate contract-quarters usage versus occupancy rates to determine the on-base capacity that minimizes total cost. The analysis illustrates why current government metrics and methodologies are inadequate and provides an analytic approach suitable for capacity-sizing decisions in any variable-demand system. The author develops an inventory simulation model that determines the least-cost inventory (capacity) and allows decisionmakers to evaluate “what-if” policy scenarios that affect lodging.
This document was submitted as a dissertation in September 2004 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Greg Ridgeway (Chair), Bart Bennett, and Ed Keating.
This report is part of the RAND Corporation dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.
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