Gregory A. Hogan
Master's Thesis submitted to the Faculty of the Virginia Tech in partial fulfillment of the requirements for the degree of
Master of Science, Systems Engineering
Industrial & Systems Engineering
Dr. William Sullivan, Chair
Dr. George Ioannou
Mr. V. Stephen Carberry
February 11, 1997
This project defines a decision support system developed to permit the user to perform a cost - benefit analysis for any military installation cited for closure, relocation, or privatization. The procedure recognizes both the economic costs and strategic benefits of a feasible solution. Though the cost estimates for a particular study may vary in magnitude, the economic portion of the model must focus on the net savings to the tax payer. Detailed cost estimates for each alternative have been developed at a level so that sensitivity analysis can be performed on any of the input parameters. Individual cost elements have been summed to yield the net cost increase / decrease to the United States tax payer. The resultant cost figures were converted to an economic score. The paper also describes a effective method to evaluate the benefits derived from implementing various alternatives. By incorporating a group participative process using multivoting and the Dunn-Rankin technique, the values resulting fro m benefits have yielded a benefits score. The Brown-Gibson model, which considers both subjective and objective measures, was used to depict the combination of economic and benefit scores to provide an overall cost - benefit score. A graphical illustrat ion of the cost - benefit tradeoffs serves as a useful tool in assessing the risk associated with a decision.
The results of the analysis have supported the Department of the Navy's decision to privatize the Naval Air Warfare Center Aircraft Division, Indianapolis, IN. The Department of Defense is considering alternatives for many military installations, this process will facilitate those decisions.
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