Cover: The Effects of Equipment Age on Spare Part Costs

The Effects of Equipment Age on Spare Part Costs

A Study of M1 Tanks

Published Oct 24, 2005

by Carol E. Fan, Eric Peltz, Lisa Pelled Colabella

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As the average ages of Army weapon systems increase, it has been assumed that this is leading to increasing maintenance costs. However, it has proved difficult to quantitatively “validate” and estimate the actual effect of equipment age on costs. In particular, it has been noted that increases in costs may have been “hidden” by how Army budgets are structured or mitigated by adaptations in part-ordering practices that are not reflected in spending and budgets. This study examines the relationship between equipment age and spare part costs for M1 Abrams tanks through the use of part requisition data. The authors also examine the issue of adaptive practices by comparing actual part expenditures to an exchange price-based valuation of part demands. This work is closely related to a companion study on the effects of equipment age on mission critical failures, a key component of equipment readiness.

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The research described in this report was sponsored by the United States Army and conducted by the RAND Arroyo Center.

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