A Study on the Estimation of the Proper Price of Weapon System by Performance Factors: Focused on Heli-Launched Anti-Tank Guided Missiles

摘要

In government procurement programs, cost estimation and analysis support funding decisions and are the basis for other major decisions, too. Such estimating and analyzing the cost of the weapon systems are crucial in execution of the defense budget. However, existing cost estimations and analyses have focused on domestic RD projects, thus those are not valid in application to foreign weapon acquisitions. This study aims at foreign weapon systems that are acquired from Direct Commercial Sales. Because the data for price estimation of a foreign weapon is usually not available, we suggest a price estimation model based on performance factors of the weapon. In this study, the proper price of the weapon system is estimated using the parametric cost estimating model. Using the data of helicopter-launched anti-tank guided missiles worldwide, we analyze the effect of each performance factor on the weapon system price by regression analysis, and use step-wise and ridge regression analysis to remove multi-collinearity. This study hopefully contributes to more reasonable decision making on proper price of weapons.