Accession Number : AD0715394
Title : Analysis of Risk for the Materiel Acquisition Process. Part I. Fundamentals.
Descriptive Note : Final technical rept.,
Corporate Author : ARMY WEAPONS COMMAND ROCK ISLAND ILL SYSTEMS ANALYSIS DIRECTORATE
Personal Author(s) : Hwang,John D.
Report Date : NOV 1970
Pagination or Media Count : 76
Abstract : The paper is the first in a series devoted to the subject of analysis of risk for the materiel acquisition process. The objective of this introductory paper is three-fold. First, risk analysis is structured to show that it has close affinity to systems analysis and adds a new dimension, in terms of a probability measure, to integrate the three dimensions of cost, time to complete, and performance of a program in the materiel acquisition process. Secondly, numerous applicable techniques of statistical decision theory are presented, plus decision tree analysis and subjective judgment collection. Thirdly, methods for risk analysis of the concept formulation and contract definition phases of the acquisition cycle are exhibited. Research problems are also mentioned for future investigative efforts. Significant payoffs from a risk analysis include the identification of high risk areas, recommendations of additional studies to fill data gaps for better management decision making, a better basis for budget allocation, as well as the discovery of additional program alternatives. (Author)
Descriptors : (*ARMY EQUIPMENT, INVENTORY CONTROL), (*DECISION THEORY, PROBABILITY), STATISTICAL ANALYSIS, ARMY PROCUREMENT, COST EFFECTIVENESS, INTEGRALS, RANDOM VARIABLES, MANAGEMENT PLANNING AND CONTROL, SIMULATION
Subject Categories : Operations Research
Logistics, Military Facilities and Supplies
Distribution Statement : APPROVED FOR PUBLIC RELEASE