An exploratory input-output model for support cost estimation.

Abstract

A cost model to estimate support costs in the Philippine Army is developed, Leontief's input-output technique is appraised for applicability in the cost model. A role for input- output cost models is related with cost analysis. In discussing the data aspects of the cost model, the use of proxy variables and their validation are presented. Correlation analysis is suggested as a tool for choosing a valid proxy variable. The matter of fixed costs is discussed also, and its treatment in the cost model is suggested. Using hypothetical data, an example on the use of the model in a Philippine Army setting is presented. Support units, tactical forces, and budgetary programs comprise the major elements of the system in the cost model.