Implementing the Defense Business Operations Fund: The Case of the Military Airlift Command
LOGISTICS MANAGEMENT INST BETHESDA MD
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Many DoD Components have had difficulty in implementing the Defense Business Operations Fund DBOF. The difficulty centers on defining business areas and measuring their outputs in complex situations - e.g., diverse services or products provided jointly at varying quality levels. Using the Military Airlift Command now reorganized as the Air Mobility Command as a test case, we have developed a generalized method for overcoming these difficulties and enhancing the implementation of DBOF. In this report, we present a statistical method for objectively defining complex business areas and capturing their multiple workloads and variations in a composite index. Building upon the composite workload measure, we then develop a cost-workload index equation for the complex business area with which to project its operating budget, assess its overall unit-cost efficiency, and price its individual services. These steps were readily accomplished on a personal computer with commercial software. We propose that the DoD Comptroller broaden its DBOF guidelines and explicitly authorize DoD Components to use this approach in implementing DBOF. Defense business operations fund, Output, Performance, Indices, Unit costs, Operating budget, Efficiency, Prices, Principal components analysis.
- Administration and Management
- Logistics, Military Facilities and Supplies