Theory and Feasibility of Implementing Economic Input/Output Analysis of Department of Defense to Support Acquisition Decision Analysis and Cost Estimation

Report Number: NPS-CE-11-204

Series: Cost Estimating

Category: Cost of Fuel

Report Series: Sponsored Report

Authors: Eva Regnier, Dan Nussbaum

Title: Theory and Feasibility of Implementing Economic Input/Output Analysis of Department of Defense to Support Acquisition Decision Analysis and Cost Estimation

Published: 2011-11-01

Sponsored By: Acquisition Research Program

Status: Published--Unlimited Distribution

Research Type: NPS Faculty

Full Text URL: http://acquisitionresearch.net/files/FY2011/NPS-CE-11-204.pdf

Keywords: Economic Input/Output analysis, supply chain burden, cost of fuel

Abstract:

In this project, Economic Input/Output analysis was used as the inspiration for a new approach to accounting for the supply-chain burden in estimating the fully burdened cost of fuel in the U.S. Department of Defense. A general model for the fully burdened cost of fuel was developed to demonstrate the multiplier effect by which the total amount of fuel required to supply a single gallon to the warfighter is greater than one gallon, due to fuel consumption in the supply chain. Using data on costs for the Defense Logistics Agency