Economic Forcasting with Optional Replacement for the CP-140 Fleet Under the Aurora Incremental Modernization Program

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Authors
  1. Maybury, D.W.
Corporate Authors
Defence R&D Canada - Centre for Operational Research and Analysis, Ottawa ON (CAN);Directorate Materiel Group Operational Research, Ottawa Ont (CAN)
Abstract
The CP-140 Aurora fleet of long range maritime patrol aircraft presents the Department of National Defence (DND) with a complicated repair-replace problem. In 1998 DND initiated the fleet-wide renewal Aurora Incremental Modernization Program (AIMP), only to suspend and then re-tool the program in 2007 with the further decision to reduce the fleet from eighteen to ten aircraft. DND plans to use the size-reduced CP-140 Aurora fleet as a surveillance platform until 2020. We apply a stochastic optimal replacement model with forecasting capabilities to historic fleet data to gain insight into the total ownership cost and performance of the fleet. We find that the effects of uncertainty in both costs and operational availability play an important role in predicting the optimal replacement time, and in predicting the future operation and maintenance costs. The application of the stochastic model yields a probability envelope for the future of the CP-140 Aurora fleet in operation and maintenance costs per operational availability. Our model demonstrates that only recently (2005) has the Aurora fleet surpassed the optimal fleet replacement time, but by 2020 the Aurora fleet is expected to exceed the optimal replacement barrier in dollars per operational availability by an order of magnitude.

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Keywords
National Procurement (Materiel);CH 140;Aurora;SAR;Fleet replacement;Operation and Maintenance;O&M;Aurora Incremental Modernization Program;AIMP;Life-cycle costing;Stochastic Differential Equation;Modernization Program
Report Number
DRDC-CORA-TM-2009-023 — Technical Memorandum
Date of publication
01 Jun 2009
Number of Pages
42
DSTKIM No
CA032890
CANDIS No
532117
Format(s):
Electronic Document(PDF)

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