Research for Decision Theory

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Do These Costs Make Any Sense? The Use and Abuse of Costs in Defense Acquisition Analyses
November 1, 1994
In 1991, the Department of Defense revised its instructions governing defense acquisition management. The role of Cost and Operational Effectiveness Analyses (COEAs) was spelled out at length. COEAs must be completed and presented to the acquisition decision executives at key decision milestones. For major acquisition programs, the analyses undergo extensive review within the military departments and in the Office of the Secretary of Defense. Thus, COEAs are primary--although not the only--means by which the decision authorities become informed about a program's advantages and disadvantages. Since 1991, CNA has provided leadership and staffing for a number of COEAs for the Navy and Marine Corps. Moreover, CNA has conducted COEA-like studies for various components of the Department of the Navy for many years. This paper, which draws from the collective experience of that work as well as from longer-standing principles of defense systems analysis, identifies and discusses certain issues that appear to be common to all COEAs. Each issue relates in some way to the use or misuse of cost information in the analysis. We begin with an overview of the role of COEAs in the acquisition process and a general discussion of the objectives of these studies and how they are put together. We then focus on the following issues: system versus decision alternatives; integrating cost and effectiveness results; wartime costs; discounting; risk and uncertainty analysis; and affordability.
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Using Cost Information in Cost and Operational Effectiveness Analyses: Some Lessons Learned
July 1, 1994
This paper identifies and discusses certain issues that appear to be common to all Cost and Operational Effectiveness Analyses (COEAs). It draws from CNA's collective experience in conducting COEA-like studies as well as from longer standing principles of defense systems analysis. Each issue relates in some way to the role of cost information in the analysis. Yet at the same time, each is considerably broader than what is typically thought of as cost estimating or cost analysis. We begin with the role of COEAs in the acquisition process and a general discussion of the objectives of COEA studies and how they are put together. We then focus on the following issues: system versus decision alternatives; integrating cost and effectiveness results; wartime costs; discounting; risk and uncertainty analysis; and affordability.
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Wargaming and Its Uses
November 1, 1984
This paper defines wargaming and briefly discusses its major characteristics and uses in exploring defense issues. It describes the different levels of wargame play and how wargames may be most appropriately employed. It concludes by comparing wargaming to systems and campaign analysis, showing how, despite some similarities of form, campaign analysis and wargaming are distinctly different approaches to addressing defense problems.
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A Sequential Quadratic Programming Algorithm for Solving Large, Sparse Nonlinear Programs
May 1, 1984
This paper discusses the structure and theory of the algorithm. The discussion focuses on the features that differ from a standard sequential quadratic programming algorithm. Part II describes the actual implementation of the algorithm and presents test results for several problems.
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DECISION ANALYSIS AND MEDICAL MALPRACTICE
March 1, 1984
Normative decision theory has been applied to the problem of evaluating alternative diagnostic-treatment strategies. The courts rely upon a different set of doctrine in performing the same sort of evaluation. This paper investigates the differences. It is suggested that the alleged 'malpractice crisis' results largely from the application of a set of ambiguous and mutually inconsistent medico-legal principles such as 'reasonable medical certainty', 'standards of good medical practice in the community' and 'proximate cause.'
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An Empirical Analysis of Pay and Navy Enlisted Retention in the AVF: Preliminary Results
August 1, 1983
This paper presents an empirical analysis of the relationship between pay and retention during the All Volunteer Force era. The report also derives estimates of the relationship between pay at one decision point and retention at future decision points.
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Models of Accession and Retention
August 1, 1983
This paper outlines two simple models that integrate accession and first-term retention policies. The first model describes the relation between optimal accession and first-term reenlistment bonus policies when marginal recruiting costs are constant. The second model is that marginal recruiting costs rise as more recruits are obtained.
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A NOTE ON ESTIMATING CONTINUOUS TIME DECISION MODELS
October 1, 1981
This paper points out a potential source of bias in the estimation of continuous time decision equations and demonstrates the use of an estimation technique, such as the Cox regression model, to correct for this bias.
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THE D-CHOICE SECRETARY PROBLEM
February 1, 1981
This paper discusses a generalized Secretary problem, where the player is given d choices to choose all of the d best objects. The optimal procedure is found by converting the d choice Secretary Problem into a 'walk' in a two-dimensional grid. A simple approximation to the optimal strategy rule is also presented.
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USING PERSONNEL DISTRIBUTION MODELS
February 1, 1981
Two models are developed. One is an aggregate model based on a simplified force structure and steady-state assumption; the other is an expanded model based on a more detailed dynamic simulation of personnel flows in a rating or detailing community.
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