SYSTEM AND TOTAL FORCE COST ANALYSIS
RAND CORP SANTA MONICA CA
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This memorandum describes the aims, concepts, and methods of military cost analysis as developed by the Cost Analysis Department of The RAND corporation. Like the 1956 report on Weapon System Cost Methodology, which it replaces, the present memorandum is concerned basically with the estimation of costs for proposed military activities so that informed choices can be made among them. It extends the earlier report by considering in more detail the underlying principles of cost analysis Chapter I, and by describing methods for analyzing the costs of total force structures as well as individual systems Chapter III. In Chapter II, the earlier cost categories are refined, particularly by the provision of categories for research and development activities which now constitute an in creasing share of system costs. By generalizing methods and examples, the scope of analysis is extended to support and control systems as well as weapon systems. In Chapter IV, the usefulness of cost sensitivity analysis is explained and illustrated by examples. The appendix describes detailed methods of estimating system manpower requirements.
- Economics and Cost Analysis