Applying Multi-Criteria Decision Analysis Methods to the Navy Program Objective Memorandum Process

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Abstract:

The U.S. Navy's annual Program Objective Memorandum (POM) describes changes in the content and priorities of Navy programs, given fiscal constraints. The POM process involves many stakeholders, echelons, and criteria, and it consists of multiple stages developed in a hierarchical manner. One way of viewing the annual POM process is as a three-level hierarchy corresponding to levels of decision-making: Thrusts, Programs, and Projects. Each Thrust represents a general Navy-wide objective supported by multiple Programs. Each Program consists of a set of fundable supporting Projects. Thrusts, Programs, and Projects together make up alternatives in the decision process. There are currently no formal methods that the Navy uses in the POM process to assist in decision-making. This thesis develops a formal methodology based upon Multi-Criteria Decision Analysis. This methodology consists of two stages: 1) use pairwise comparisons to evaluate alternatives that include each Thrust, each Thrust-related Program, and each Program-related Project, and 2) output the ratings of each alternative in a set, then take the ratings outputted from the first stage and use optimization methods to allocate the budget to Projects. We outline two different rating methods to use in the optimization stage: cardinal model and ordinal model. The purpose of our research is to help standardize the decision-making process associated with the annual POM.

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