A random matrix theory approach to national procurement spending – Applications to the CC130 Hercules fleet performance

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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
We apply the methods of random matrix theory to search for relationships between National Procurement spending and the performance of the CC130 fleet. By understanding the eigenvalue spectrum of correlation matrices connected to performance and spending, we construct the minimal spanning tree of the system to identify networked hierarchies in the data. We find that no meaningful relationship exists between spending and high level performance indicators, suggesting that the fleet responds to spending shocks in an inelastic manner. The results indicate that the CC130 fleet is maintained robustly and that funding has not fallen below a critical level that would induce correlations between spending and performance. The techniques we apply in this study can be applied generally to any project that requires an understanding of correlations in data.

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Keywords
National Procurement (Materiel);CC130;Dendrogram;Correlation;Fleet performance;National procurement spending;Minimal spanning tree;Random matrix theory;Spending fluctuations
Report Number
DRDC-CORA-TM-2010-168 — Technical Memorandum
Date of publication
13 Aug 2010
Number of Pages
54
DSTKIM No
CA034577
CANDIS No
534076
Format(s):
Electronic Document(PDF)

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