Incorporation of Learning Curve Costs in Acquisition Strategy Optimization

摘要

Each year, the United States Army procures billions of dollars worth of weaponsand equipment. The process of deciding what to buy in what quantities, and when is extremely complex, analysis. Two techniques used in this analysis are mathematical programming and cost estimation. Although they are related through constraints on available procurement funds, the learning curves, which better represent system costs as a function of quantity produced, have not been incorporated into the mathematical programming formulations that compute the quantities of items to be procured. As a result, the solutions obtained could be either suboptimal or even infeasible with respect to limitations. In this paper, we present a mixed integer linear programming formulation that uses a piecewise linear approximation of the learning curve costs or a more accurate portrayal of budgetary constraints. In addition, implementation issues are discussed, and performance results are given.