The optimal time to upgrade or replace the light armoured vehicle (LAV III) fleet – Pre LAV III upgrade

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Authors
  1. Desmier, P.E.
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 Canadian Forces took delivery of 649 Light Armoured Vehicles (LAV) III vehicles from September 1999 to December 2009. During that period, the fleet has had to deal with significant and costly repairs and modifications due to combat operations in Afghanistan such that, after 11 years of hard usage, a major $1.35B upgrade program is planned for 550 vehicles that anticipates extending the life of the fleet to 2035. This study assumes a fleet replacement model where LAV III Operations and Maintenance (O&M) cost growth per vehicle is modelled as a geometric random walk, where random events such as unforeseen engineering and maintenance solutions to combat operations, or budgetary considerations due to scarce national procurement dollars cause the fleet resiliency to diminish with time, impelling a decision to either upgrade or replace the fleet. Due to uncertainty in the model parameters, the model specifies a critical region with upper and lower boundaries which signal the decision to either upgrade or replace the fleet. The results demonstrate that the upgrade program (currently in definition phase) is opportune for this fleet. The growth in O&M costs are such that the expected time to reach the critical region, and the decision point, is 1.7 years from April 2010. Furthermore, the cash phasing for the project, as specified in the Capability Investment Database (CID), agrees favourably with the dates specified by the model.

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Keywords
National Procurement (Materiel);Light Armored Vehicles (LAV);Operations and Maintenance;Fleet replacement;LAV III;LORIT;RRP;IEDMPK;AoA;MVRP;Optimal replacement;Retrofit and Repair Program
Report Number
DRDC-CORA-TM-2010-101 — Technical Memorandum
Date of publication
01 Jun 2010
Number of Pages
50
DSTKIM No
CA034115
CANDIS No
533580
Format(s):
Electronic Document(PDF)

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