A System Dynamics Approach to Evaluate the Long-Term Effects of Requirement Changes and Unit Quantity Changes During Department of Defense Acquisition

摘要

Cost overruns within the Department of Defense (DoD) acquisitions are widespread and have come to be accepted by program managers as a daunting challenge. Factors cited in Selected Acquisition Reports as being responsible for significant cost overruns include, among others, requirement changes and unit quantity changes. This paper focuses on these two factors and investigates their dynamic relationship with program acquisition costs. We present a testing methodology that program managers can use to evaluate the dynamic relationship between the variables of requirement changes and unit quantity changes. The methodology provides insight into possible future cost of major programs. Using a system dynamics approach, we aim at evaluating the long-term effects on acquisition cost. The proposed methodology introduces a balance model based on system dynamics principles to clarify the interplay between variables and provide detailed insight into their effect on program cost. The goal is to provide program managers with proactive decision opportunities with balance model testing and evaluating the results to avoid cost overrun during DoD acquisition life cycles. A case study of the model based on the lessons learned from the Global Hawk program is presented.