The Department of National Defence strategic cost model – Volume II - Theory and empirics

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Authors
  1. Solomon, B.
  2. Chouinard, P.
  3. Kerzner, L.
Corporate Authors
Defence R&D Canada - Centre for Operational Research and Analysis, Ottawa ON (CAN);Operational Research Div, Ottawa ONT (CAN) Strategic Planning Operational Research Team
Abstract
The production of defence capabilities is based on the principles of constrained maximization. That is, it is a process that maximizes the military capability achievable from a given budget with a given defence technology and a given set of input prices. The first step in this process is to develop a model or a process that can estimate the total cost of producing military capabilities. This paper discusses such a model, developed in Defence R&D Canada, with particular emphasis on the economics and operational research methodologies underpinning the modeling framework. From an economics perspective the model is a hybrid of a multi-product or joint output production function and a simplified Input-Output model. A number of simulations are conducted and the paper highlights some of the strategic level results and their associated implications on the Canadian Forces and the Defence Capability Planning process.

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Report Number
DRDC-CORA-TR-2008-03 — Technical Report
Date of publication
01 Oct 2008
Number of Pages
58
DSTKIM No
CA031607
CANDIS No
530537
Format(s):
Electronic Document(PDF)

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