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File Number: NPS-LM-06-037
Authors: Keebom Kang, Susan M. Sanchez, and Kenneth H. Doerr
Title: A Design of Experiments Approach to Readiness Risk Analysis for Performance-Based Logistics
Published: September 2006
Sponsored by: Acquisition Chair, Naval Postgraduate School
Full Text URL: http://www.acquisitionresearch.net/_files/FY2006/NPS-LM-06-037.pdf
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Abstract:
We develop a simulation model to aid in identifying and evaluating promising alternatives to achieve improvements in weapon system-level availability when outsourcing logistics services for system components. Two outcomes are valued: improvements in average operational availability for the weapon system, and reductions in the probability that operational availability of the weapon system falls below a given planning threshold (readiness risk). In practice, these outcomes must be obtained through performance-based agreements with logistic providers. The size of the state space, and the non-linear and stochastic nature of the variables involved precludes the use of optimization approaches. Instead, we use designed experiments to evaluate simulation scenarios in an intelligent way. This is an efficient approach that enables us to assess average readiness and readiness risk outcomes of the alternatives, as well as to identify the components and logistics factors with the greatest impact on operational availability.
Keywords: Performance-based Logistics, Operational Availability, Outsourcing, Design of Experiments
About the Authors:
Keebom Kang, Associate Professor, joined the Naval Postgraduate
School in 1988, where he
teaches supply-chain, logistics engineering and computer simulation modeling
courses for the MBA program. His research interests are in the areas of
logistics and simulation modeling in various military applications. He received his PhD in Industrial Engineering
from Purdue University. He was the Co-Editor of the Proceedings
of the 1995 Winter Simulation Conference, and the program chair for the
2000 Winter Simulation conference. He is
currently the Associate Editor for Naval
Research Logistics.
Keebom Kang
Associate Professor
Graduate School of Business and Public Policy
Naval Postgraduate School
Monterey, CA 93950-5197
Tel: (831) 656-3106
E-mail:
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Susan M. Sanchez is a Professor of Operations Research at the Naval Postgraduate
School, where she holds a joint appointment
in the Graduate School of Business & Public Policy
and serves as the Director of the SEED Center
for Data Farming. Her research
interests include experimental design for simulation studies, data-intensive
statistics, and robust selection. She
has a Ph.D. in Operations Research from Cornell University. She is currently the Simulation Area Editor
for the INFORMS Journal on Computing
and the ASA representative to the WSC Board of Directors.
Susan M. Sanchez
Professor
Department of Operations
Research
Graduate School of Operational and Information Sciences &
Graduate School of Business and Public Policy
Monterey, CA 93943
Tel: 831-656-2780
E-mail:
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Kenneth Doerr, B.S. Indiana University, 1984; Ph.D. University of
Washington, 1994, is Associate Professor of Operations Management, Graduate
School of Business and Public Policy, Naval Postgraduate School. Prior to
joining the faculty at the Naval Postgraduate School,
he taught at the University of Miami, the University
of Washington and Santa Clara University,
and also held research fellowships at the University
of Waterloo and the University of Cincinnati. He has worked for Shell Oil, Monsanto Corporation
and Peoplesoft in manufacturing and supply chain systems. His research has
appeared in several leading journals, including Management Science, The Academy of Management
Review, IIE Transactions and The Journal of Applied Psychology. His research interests are in process design,
work design, and information technology to facilitate operations. Dr. Doerr is originally from St. Louis, Missouri.
Ken Doerr
Associate Professor
Graduate School of Business & Public Policy
Naval Postgraduate School
Monterey, CA 93943
Phone: (831) 656-3625
E-mail:
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The research presented in this report was supported by the Acquisition Chair of the Graduate School of Business & Public Policy at the Naval Postgraduate School.
To collaborate on Defense Acquisition Research or to become a research sponsor, please contact:
RADM James B. Greene, USN, (Ret), Acquisition Chair
Tel: (831) 656-2092
Fax: (831) 656-2253
E-mail:
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