Accession Number:

ADA214888

Title:

Improper Use of Economic Analysis in Materiel Cost Comparison Studies

Descriptive Note:

Memorandum rept.

Corporate Author:

ARMY AVIATION SYSTEMS COMMAND ST LOUIS MO

Personal Author(s):

Report Date:

1989-09-01

Pagination or Media Count:

10.0

Abstract:

Economic Analysis is defined in Army Regulation 11-28 as a systematic approach to the problem of choosing how best to employ scarce resources. This approach is an investigation of the full implications of achieving a given objective in the most effective manner. Economic analysis is utilized to examine various alternatives to solve a problem so that the decision maker can select the best option. Cost and benefits for each alternative are analyzed and compared. When employed properly, economic analysis is a powerful tool for the decision maker. When not prepared properly, the EA can lead to the wrong decision. The cost-benefit analysis is the basis for reviewing the various alternatives. This analysis enables the decision maker to examine the costs, weigh the benefits and to determine the feasibility of implementing each alternative. All options which are not viable are eliminated from further consideration. Those which survive the initial test of feasibility are compared to each other showing both costs and benefits. kr

Subject Categories:

  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE