A Method for Incorporating Time-Preference Judgements in Weapon Systems Studies.
TRW SYSTEMS GROUP MCLEAN VA WASHINGTON OPERATIONS
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The objective of the research was to develop a methodology based on elements of decision theory and utility theory which will permit discounting of future benefits and cost streams to determine present value of time phased resource allocation options. Additionally, the methodology was to be applicable, a posteriori, to previous analyses to determine what combinations of discount rates and utility functions are consistent with previous study recommendations. The objective was achieved on both accounts. A formal mathematical development of the concepts necessary for the decision maker to analyze and choose from a list of alternative courses is presented in the text. Interpretation and implications of the concepts are then developed for the reader. An algorithm for applying the technique is likewise developed, both for looking at past actions and for making new decisions. A special application of automata theory is developed to assist in making new decisions. A claim is made that the approach is simple and direct and, when applied to complicated decisions, avoids the possibility of error inherent in other techniques. Author
- Operations Research
- Logistics, Military Facilities and Supplies