Flexible Ship Options

Abstract

The current global security environment is changing at a faster pace than ever before with higher levels of complexity and competitiveness, with a complex dynamic of possibilities. The U.S. Navy not only needs more platforms or ships, but it needs them with the ability to adapt to changes with new technologies and operational concepts. One such concept is that of flexibility in our fleet of ships. 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 relevance over the ship's full-service life. Examples of Flexible Ships design features include decoupling payloads from platforms, standardizing platform-to-payload interfaces, implementing allowance for rapid reconfiguration of onboard electronics and weapons systems, preplanning access routes for mission bays and mission decks, and allowing for sufficient growth margins for various distributed systems. This research analyzes the application of strategic Real Options Valuation methodology within the Integrated Risk Management process to assess the total future value of Flexible Ships design features and for use in the Future Surface Combatant Analysis of Alternatives. The current research has the explicit goal of proposing a reusable, extensible, adaptable, and comprehensive advanced analytical modeling process to help the U.S. Navy in quantifying, modeling, valuing, and optimizing a set of ship design options to create and value a business case for making strategic decisions under uncertainty.