Flexible and Adaptable Ship Options: Assessing the Future Value of Incorporating Flexible Ships Design Features Into New Navy Ship Concepts

Abstract

To successfully implement the Surface Navy's Flexible Ships concept, PEO-SHIPS requires a new methodology that assesses the total future value of various combinations of Flexible Ships design features and how they will enable affordable warfighting value over the ship's full service life. Examples of Flexible Ships design features include decoupling payloads from platforms, standardizing platform-to-payload interfaces, allowance for rapid reconfiguration of onboard electronics and weapons systems, preplanned access routes for mission bays and mission decks, and allowance for sufficient growth margins for various distributed systems. The current research analyzes the application of strategic Real Options Valuation methodology within the Integrated Risk Management process to assess the total future value of Flexible Ship design feature options. This approach can be used to support the Future Surface Combatant Analysis of Alternatives technique. The current research has the explicit goal of proposing a reusable, extensible, adaptable, and comprehensive advanced analytical modeling process. This methodology is designed to help U.S. Navy decision-makers in quantifying, modeling, valuing, and optimizing a set of ship design options to support a business case for making strategic acquisition decisions in the context of various quantifiable uncertainties.