Economic value of Army foreign military sales
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Authors
Allen, James P.
Bailey, Scott A.
Pye, Brandon A.
Subjects
foreign military sales
learning curve
economic order quantity
cost avoidance
learning curve
economic order quantity
cost avoidance
Advisors
Aten, Kathryn
Dillard, John
Date of Issue
2015-12
Date
Dec-15
Publisher
Monterey, California: Naval Postgraduate School
Language
Abstract
This project identifies current sources of cost savings and cost avoidance generated through Army foreign military sales (FMS). Using a comparative high-low case-study approach, a high-demand volume case and a low-demand volume case were selected in major weapons categories. The cases were analyzed on an internal basis to determine cost savings, cost avoidance, and public value. Once the cases were analyzed and compared against each other, advantages or trends in cost savings, cost avoidance, and public value became apparent. Upon completion of our analysis, we determined that cost savings were usually gained from reduced system unit costs due to higher economic order quantities, reduced overhead costs per unit, and reduced unit costs resulting from manufacturing learning curves. Additional costs were avoided by reducing gaps in production lines. Furthermore, we determined that the Army’s FMS strategy needs improvement in order to take full advantage of these sources of cost savings and cost avoidance.
Type
Thesis
Description
MBA Professional Report
Department
Graduate School of Business and Public Policy (GSBPP)
Graduate School of Business and Public Policy (GSBPP)
Organization
Identifiers
NPS Report Number
Sponsors
Funder
Format
Citation
Distribution Statement
Approved for public release; distribution is unlimited.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.