Applying and Measuring the Value of Utility Modeling in Defense Acquisition Decision-Making

Abstract

This research project is intended to determine whether utility modeling could be used within the Department of Defense acquisition community. The primary effort of this research is to create a linear programming based utility model that could assist a program manager in making purchase decisions. The final solution, given all available data regarding cost, schedule impacts, unique program constraints, and quality factors, will be the optimal allocation of budgetary resources to achieve the best overall value for the end user and taxpayer. Data for this research were obtained from the Apache Block III Modernization Program, after which a utility model was created to assess the utility of linear programming in the DoD acquisition decision-making process. The model compared sixteen unique potential upgrades from the Apache Block III Modernization Program against each other and determined an optimal solution, given the unique conditions of the program. Utility modeling proved to be an effective tool to help program managers make better purchase decisions. Utility modeling, coupled with sensitivity analysis, weighted utility modeling, and decision support analysis has the ability to optimize resource allocation decisions, thus maximizing overall value and reducing waste. This research project identified opportunities for further exploration into project management forecasting, game theory, and retroactive program analysis.