Decision Support Models for Valuing Improvements in Component Reliability and Maintenance
Doerr, Kenneth H.
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We developed two integrated models to support the analysis required when outsourcing logistics services at the component-level to achieve improvements in system-level availability for a weapon system. In the decision-making environment we model, a set of investment alternatives for the improvement of component-level sparing, reliability, or maintainability are available at given costs through performance-based contractual agreements. Operational availability (Ao) is a central benefit to be obtained through such contracting, and average Ao is a typical performance measure in performance-based contracts. But average system Ao may not be a sufficient performance measure, compared to the probability that the Ao of an asset pool falls below a given planning threshold (what we call readiness risk). Investments in alternatives may be limited by budget constraints, but there is no simple commensurable unit between investment dollars and readiness benefits. Hence, we present a spreadsheet cost model and an integrated discrete-event simulation model that together makes explicit the cost and readiness implications of available alternatives, to serve as a decision support system, and to provide a common ground for discussions of tradeoffs.
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