Estimating U.S. Navy Support Costs

In an environment characterized by austere budgets and changing force levels, the need to provide estimates of support requirements corresponding to force alternatives has become acute. The procedure described here meets this challenge by incorporating Leontief's input-output analysis into a force cost model. One advantage to this technique is that it allocates support resources to the forces, thus giving insight into the utilization of support by forces. However, its real power is in capturing the existing implicit support relationships and using them to project support resources consistent with specified forces. This approach does not attempt to find optimal support policies; it does predict the marginal impact of force changes based on a given set of support policies. It can also, if desired, estimate the resource impact if support policies are varied. The input-output model described here was developed for the U.S. Navy but the method has applicability to any large interrelated system.