Valuing Programmed Depot Maintenance Speed

An Analysis of F-15 PDM

Edward G. Keating, Elvira N. Loredo

ResearchPublished Nov 27, 2006

Part of a larger RAND Project Air Force study on capability-based programming, this report introduces a revealed preference methodology to estimate the value to the United States Air Force of expediting F-15 fighter jet programmed depot maintenance (PDM). Such a valuation estimate would be useful in depot-level cost-benefit analysis. The authors rely on the fact that the Air Force has chosen to pay for intermittent PDM on F-15s to assert that F-15s must have enough value after PDM visits to justify PDM costs. Air Force expenditure data suggest that a typical fiscal year 2005 PDM visit cost about $3.2 million. Using the aircraft valuation curves consistent with PDM being worthwhile, the authors find that expediting an F-15’s last PDM visit by a month must be worth at least $60,000. However, using a plausible annual aircraft valuation decline rate, they find that expediting an old F-15’s last PDM visit by a month would be worth around $75,000, while expediting a new F-15’s first PDM visit by a month would be worth more than $180,000. This report also explores various robustness enhancements. Consideration of aging aircraft issues, for instance, tends to increase the estimated value of expedited PDM.

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Document Details

  • Copyright: RAND Corporation
  • Availability: Web Only
  • Year: 2006
  • Pages: 60
  • Document Number: TR-377-AF

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Keating, Edward G. and Elvira N. Loredo, Valuing Programmed Depot Maintenance Speed: An Analysis of F-15 PDM. Santa Monica, CA: RAND Corporation, 2006. https://www.rand.org/pubs/technical_reports/TR377.html.
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The research described in this report was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE.

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