Accession Number:

ADA604405

Title:

A More Flexible Approach to Valuing Flexibility

Descriptive Note:

Conference paper

Corporate Author:

AIR FORCE INSTITUTE OF TECHNOLOGY WRIGHT-PATTERSON AFB OH DEPT OF SYSTEMS AND ENGINEERING MANAGEMENT

Report Date:

2011-04-01

Pagination or Media Count:

16.0

Abstract:

The DOD routinely demonstrates its capability to develop phenomenal systems however, these accomplishments are often tarnished by substantial cost and schedule overruns. While defense policies are continually being revised to address these problems, many believe that a more fundamental source of these overruns is the lack of flexibility in the systems being developed. But providing justification to invest in flexibility is a tough sell, as stakeholders struggle to quantitatively demonstrate the potential return on investment. Therefore, this paper introduces an alternative methodology for valuing the inherent ability of a system or design to accommodate change. The proposed methodology is essentially a modification of the current life cycle model and is premised on the notion that the need for capability changes in a program arise in a stochastic manner that can be incorporated into a continually updated, expected value model presented in terms of total program cost.

Subject Categories:

  • Structural Engineering and Building Technology
  • Defense Systems

Distribution Statement:

APPROVED FOR PUBLIC RELEASE