Cost of ownership model for spare engines purchase for the Korean navy acquisition program

S Y Sohn (), Y Kim () and B T Kim
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S Y Sohn: Yonsei University
Y Kim: Yonsei University
B T Kim: Yonsei University

Journal of the Operational Research Society, 2009, vol. 60, issue 12, 1674-1682

Abstract: Abstract Major weapon system acquisition programmes often require high initial purchase cost which can be a burden for the procurement of a highly reliable system. In order to avoid the tendency of acquiring a less expensive weapon system with lower performance, a cost of ownership (COO) model can be applied to assess the lifetime cost of the weapon system. In many existing cost estimation models for weapon systems, the failure rate of the system is assumed to be constant and the functional relationship between the initial purchase cost and maintenance cost is not well defined. In this paper, we propose a revised COO model where random effects models are employed to accommodate the variations of the system failure frequency and repair time. It is expected that our model can contribute to the cost-effective procurement of spare engines for the Korean Navy acquisition programme within the limited national defence budget.

Keywords: weapon system acquisition; cost of ownership; cost estimation model; random effects model (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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DOI: 10.1057/jors.2008.147

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