The potential cost savings of establishing a Marine Corps Exercise Support Detachment in Yuma, AZ
Bruce, Mitch A.
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This thesis analyzed the potential cost savings of establishing an Exercise Support Detachment (ESD) in Yuma, AZ. It compared the costs of the current operations (status quo) to those associated with an ESD (proposed alternative). The costs of the status quo were calculated using historical data. A large cost of the status quo is the personnel cost associated with equipment preparation and embarkation, and post-exercise maintenance. The level of personnel involved differs from unit to unit. Therefore, the costs of the status quo were calculated using three different personnel levels of involvement assumptions: 10%, 20%, and 30%. The costs of the proposed alternative were calculated using historical data from similar projects and operations as well as DoD and U.S. government regulations regarding cost estimation. The annual costs of the alternative were subtracted from the annual costs of the status quo to quantify the annual savings at each level of involvement. The annual savings were then analyzed using the net present value (NPV) method to show the total value of the ESD over a 50-year period. The analysis revealed an annual savings of $4.9 million, $13.9 million, and $22.4 million at the 10%, 20% and 30% levels of involvement, respectively. The NPV ranged from $108 million to $558 million, assuming a 50-year lifespan of the ESD buildings. A sensitivity analysis was conducted using a 10-year building lifespan, which changed the NPV range to $25.7 million to $182.8 million. Overall, the establishment of an ESD in Yuma, AZ, has the potential to save the U.S. government significant money.
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