CAPITAL ASSET AMORTIZATION MODEL (CAAM)

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Authors
  1. Funk, R.W.
  2. Christopher, G.L.
Corporate Authors
Operational Research and Analysis, Ottawa ONT (CAN)
Abstract
Operational Research was approached to devise a model which could determine the total amortized cost associated with fighter capability. The model must be able to account for all direct and indirect capital expenditures which support the provision of a Canadian Air Force fighter capability. The model must also be able to reflect the effect of changes to operational procedures on the total capital cost of this capability. The Capital Asset Amortization Model (CAAM) was developed to satisfy this requirement. The model spreadsheet which accepts as input the costs of all capital projects which support the retention of an effective fighter capability. From operational data, CAAM determines the approximate lifetime of the air fleet. For capital projects related specifically to the fighter fleet, the fleet lifetime is used to determine the appropriate amortization period for the projects. For non-airframe-specific projects, an associated technological lifetime is used for amortization calculations. CAAM provides a summary which identifies the total annual capital cost to provide a fighter capability based on the latest estimates of fleet lifetime. CAAM can be used to establish a baseline cost for fighter capability and measure the effect of changes to infrastructure and operations.
Keywords
Costing models;Capital program costing;Air force costing;Fleet costing
Report Number
ORA-PR-9510 — Project Report
Date of publication
01 Sep 1995
Number of Pages
43
DSTKIM No
96-00101
CANDIS No
153975
Format(s):
Document Image stored on Optical Disk;Hardcopy

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