Please use this identifier to cite or link to this item:
https://dair.nps.edu/handle/123456789/568
Title: | Application of Real Options Theory to Software-intensive System Acquisitions |
Authors: | Albert Olagbemiro Man-Tak Shing Johnathan Mun |
Keywords: | Real Options Theory Software-Intensive Systems Requirements Uncertainty |
Issue Date: | 1-Apr-2009 |
Publisher: | Acquisition Research Program |
Citation: | Published--Unlimited Distribution |
Series/Report no.: | Real Options Theory NPS-AM-09-042 |
Abstract: | In the Department of Defense (DoD), the typical outcome of a software acquisition program has been massive cost escalation, slipping planned delivery dates and making major cuts in the planned software functionality to guarantee program success. To counter this dilemma, the DoD put forth a new weapons acquisition policy in 2003 based on an evolutionary acquisition approach to foster increased efficiency while building flexibility in the acquisition process. However, the evolutionary acquisition approach often relies on the spiral development process, which assumes end-state requirements are known at the inception of the development process, a misrepresentation of reality in the acquisition of DoD software-intensive weapons systems. This article presents a framework to address requirements uncertainty as it relates to software acquisition. The framework is based on Real Options theory and aims at mitigating risks associated with requirement volatility based on the technology objectives constraints as put forth by the customer at the acquisition decision-making level. |
Description: | Acquisition Management / NPS Faculty Research |
URI: | https://dair.nps.edu/handle/123456789/568 |
Appears in Collections: | Annual Acquisition Research Symposium Proceedings & Presentations |
Files in This Item:
File | Size | Format | |
---|---|---|---|
NPS-AM-09-042.pdf | 271.75 kB | Adobe PDF | View/Open |
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.