Considerations in a Comprehensive Total Force Cost Estimate.
Final rept. Mar 1990-Nov 1992
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
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The Department of Defense Total Force Policy Study Group was convened to review the practices used to evaluate and establish Total Force policies. Part of the groups work was to identify appropriate methods for estimating costs of alternative force structures, especially those with different mixes of active and reserve components. This study developed and applied a framework for estimating the full cost effects of policy decisions that involve changes in the size and composition of U.S. forces. This framework considers the full range of direct and indirect costs and describes procedures for making consistent estimates of force costs in any service or component. The study goes beyond the traditional focus on peacetime unit operating cost by including the capital costs associated with changes in force size, secondary impacts on direct support programs, and the cost effects of force changes on defense infrastructure activities. The paper also categorizes and identifies one-time costs that have an impact on the net total cost of alternative policies and that must be considered when transitioning from one force structure to another. By applying the recommended framework to examples from each service, the study demonstrates that the relative cost of active and reserve component units vary significantly for a variety of reasons.
- Economics and Cost Analysis
- Military Forces and Organizations