A “Check Engine” Light to Accelerate Change: 21st Century Approaches for Assessing Cost-Effectiveness

Photo: An MQ-9 Reaper on the flight line at Creech Air Force Base in Nevada on December 17, 2019. MQ-9 Reaper operators and pilots might be group whose mission could benefit from TD-ABC methodology. (U.S. Air Force photo by Senior Airman Haley Stevens).

ARLINGTON, VA | June 30, 2021 — The Mitchell Institute for Aerospace Studies is pleased to announce a new entry in its Mitchell Forum short paper series, A “Check Engine” Light to Accelerate Change: 21st Century Approaches for Assessing Cost-Effectiveness by Major Stefan Katz, USAF.

The Air Force and Space Force are aggressively striving to be more agile and affordable. This is a tough feat, since “agility” and “affordability” are not usually synonymous. The concept of “cost-per-effect” analysis is a big step in pursuing affordability within force development decisions, and it can also render a more agile force. Taking this a step further, the extent to which support activities and their resources contribute to any effects are calculable with the help of 21st century cost-analysis methods. This paper examines industry’s experience with one method, time-driven activity-based costing (TD-ABC), and proposes how this can be the Department of the Air Force’s path in assessing cost-per-effect.

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