U.S. Army Reserve recruiting : a critical analysis of unit costing and the introduction of a life cycle cost-effectiveness model
Mitchell, Daniel G.
Terasawa, Katsuaki L.
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The purpose of this thesis is to review the U.S. Army Reserve (USAR) recruiting process, to analyze unit cost resourcing at the U.S. Army Recruiting Command (USAREC), and to introduce a life cycle cost-effectiveness methodology for evaluating Reserve accession policies. First, we identify the limitations of using unit cost for evaluating and improving USAREC's fiscal performance and as a management tool to allocate resources. Our analysis concludes that current unit cost accounting at USAREC does not provide the proper incentives to cut costs nor the information needed to achieve economic efficiency. Second, we introduce a life cycle cost effectiveness model to compare alternative USAR accession policies. The model uses historical data of soldier attrition and promotion behavior coupled with estimates of recruiting, training and compensation costs to determine life cycle costs of various accession policies. For the data used, prior service (PS) soldiers had lower attrition rates and were more cost-effective over a seven year life cycle than non-prior service (NPS) soldiers. High quality NPS soldiers showed similar results when compared with low quality NPS soldiers. We recommend that USAREC and the USAR use marginal life cycle cost analysis when making manpower procurement decisions and allocating resources.
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