Economic Analysis Model Evaluation for Technology Modernization Programs.
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH SCHOOL OF SYSTEMS AND LOGISTICS
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This research effort attempted to validate the economic analysis model contained in Chapter V of the Aeronautical Systems Division ASD Technology Modernization Guidebook published in July 1982. The ASD Model is used for determining the economic feasibility of potential capital investments. The researcher applied the ASD Model to the F-16 Tech Mod Programs and compared the ASD Model to actual savings data. Suggestions to improve and guidelines for applying the ASD Model was presented. Background literature reviews three existing Tech Mod Programs as well as several capital budgeting techniques used for investment decision making. Defense Department reports were also reviewed concerning the declining productivity growth within the defense industrial base. The timing of the savings and purchase of the capital equipment were also important to ensuring accurate application of the ASD Model. Inclusion of Lost Profit as a variable in the ASD Model was recommended as well as better traceability of actual savings data to facilitate future validation studies.
- Administration and Management
- Economics and Cost Analysis