Introduction of Uncertainty Techniques to the Productivity Investment Fund

摘要

Each year the Defense Productivity Program Office (DPPO) disburses funds for Productivity Investment Projects (PIFs). The purpose of these projects is to increase productivity within the Department of Defense (DOD). To enhance these efforts, DPPO requested a study to be conducted to determine if methods of risk or uncertainty will affect the results obtained by the current procedure. This study applies various principles of uncertainty to this procedure and examines their impact on the project rankings. A background of DPPO and PIFs is presented together with discussion of risk and uncertainty techniques, as well as the economic indicators used in ranking projects. A model is then explained which will introduce uncertainty into the present procedure. Results of the initial comparison and sensitivity analysis is revealed. Conclusions are drawn based on these results and recommendations concerning alternate procedures and possible further research are presented. (Author)