Lifecycle Cost Model Development for through-life effectiveness tracking

The objectives of the Netherlands Ministry of Defence are not changed since the start of the Cold War, but the execution has dramatically changed. From a single enemy in the east to many smaller threats all over the world. Due to this change also the public opinion over the Netherlands Ministry of Defence is changed, which has drawn more attention to the value the Netherlands Ministry of Defence created and the amount of money the Netherlands Ministry of Defence costs. Since then the Netherlands Ministry of Defence had to be more cost effective and had to explain their expenses far more comprehensively. But due to the change of usage of weapon systems from very regular usage in Cold War to more irregular usage the prediction based on expenses lost their value for tracking and improving the cost effectiveness. The main reason and added value for Netherlands Ministry of Defence of this research is improving management decision-making. This decision-making can only be supported when the appropriate tools are handed. This translates into the design of a model that can take into account the highly variable environment in which the Netherlands Ministry of Defence has to operate. To accommodate this need, the developed model must deliver an indication of the cost-effectiveness of a weapon system. As a start the costs that are induced must be included, but this will not give an adequate indication. To do this the performance and the effective usage must be factored into the model. This is done by measuring the performance delivered by the system relative to the targeted performance. The effective usage is set by taking the flight hours which are corrected by taking into account the environment in the form of a profile severity and the flight dynamics in the form of fatigue severity. Because fatigue severity is difficult to determine, a more easily measurable indicator is needed for an easily accessible cost-effectiveness measure. This indicator is found in the fuel consumption, because it was found that the fuel consumption highly correlates to the fatigue severity. Together with historical data of the flown profile this can give the Netherlands Ministry of Defence the information it needs for future deployment. The cost, usage and performance data can be brought together in a scale, which is called Rating Points. The Rating Points give a clear indication for the management, when the Rating Points increase for a specific weapon system the costs are increased, relative to the delivered performance and use. The usage of the Rating Points system will lower the effort needed to track the output of weapon systems and increase the possibilities to take action when needed.

Subject

LCC
Lifecycle Costing
LCM
Lifecycle Management
Chinook
Value Engineering
Data Management
CH-47

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Embargo date

2025-05-14

Part of collection

Student theses

Document type

master thesis

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file embargo until 2025-05-14