AN INDEX FOR USE IN THE SELECTION OF COST EFFECTIVE SYSTEMS
ELECTRONIC SYSTEMS DIV HANSCOM AFB MA
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Life-cycle cost alone is not sufficiently inclusive to be used as a yardstick for the selection of a cost effective system. Equal life-cycle cost does not imply equal cost effectiveness. An index is developed which in addition to life-cycle cost, includes cost effective life span, expenditure chronology, system phase-in structure, and the present equivalent cost of money expended at a future date. Although the index does not determine military effectiveness, it does permit the cost comparison of various systems or programs on a logically compatible and equivalent basis.
- Economics and Cost Analysis