Finding Candidate Options for Investment

Finding Candidate Options for Investment: From Building Blocks to Composite Options and Preliminary Screening

Paul K. Davis
Russell D. Shaver
Gaga Gvineria
Justin Beck
Copyright Date: 2008
Edition: 1
Published by: RAND Corporation
Pages: 86
https://www.jstor.org/stable/10.7249/tr501osd
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  • Book Info
    Finding Candidate Options for Investment
    Book Description:

    Description of a methodology and a prototype tool, Building Blocks To Composite Options Tool (BCOT), for identifying investment options for defense capability areas. It ensures that a broad range of options is considered initially, then uses a screening technique to narrow the range to those meriting more-extensive assessment in a fuller portfolio-analysis framework. BCOT extends classic economics and operations-research techniques and suggests pragmatic approximations, particularly in capabilities-based planning.

    eISBN: 978-0-8330-4488-4
    Subjects: Technology

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. PREFACE
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. FIGURES
    (pp. vii-viii)
  5. TABLES
    (pp. ix-x)
  6. SUMMARY
    (pp. xi-xiv)
  7. ACRONYMS, TERMS, AND DESCRIPTIONS
    (pp. xv-xv)
  8. ACKNOWLEDGMENTS
    (pp. xvi-xvi)
  9. CHAPTER ONE INTRODUCTION
    (pp. 1-3)

    The Department of Defense has considerable interest in examining investment programs by capability area.¹ A common problem in doing so for a given capability area is that many of the options that arise for consideration come from different people and organizations and were developed based on the organizations’ past efforts, knowledge, and interests. The possible options thus reflect diverse assumptions about what capabilities are needed. Only sometimes have the individuals involved thought much about opportunities for synergy, either across Services or across capability areas, except where doing so is natural for their particular interests (e.g., an airplane builder seeing multiple...

  10. CHAPTER TWO BCOT’S STRUCTURE AND FLOW
    (pp. 4-16)

    When BCOT is opened, a “faceplate” appears on the screen, as shown in Figure 2.1. The Overview node² contains a verbal description of the overall tool. The Changes and Notes node (bottom) serves as a simple text-based journal of entries users wish to make. For a given application, it should be used to record changes in BCOT or default assumptions, to note issues for subsequent revisions to address, or to make other comments that might help in maintenance or collaborative analysis. Such commenting is valuable in practice, because it assists in keeping track of model versions and their distinctions.

    The...

  11. CHAPTER THREE THE CENTRALIZED INTERFACE: INPUTS AND OUTPUTS
    (pp. 17-20)

    Because of BCOT’s interactive nature, almost all of its aspects can be considered inputs. For example, equations exist in some of the modules. Where necessary, many of the equations can be readily changed—in much the same way that users can change simple equations in spreadsheet programs.²° More typically, the intention is for BCOT’s structure to be constant within a given application, so that the inputs can be reduced to a simple list and collected in an interface.²¹ Similarly, although it is easy to generate displays for any variable in the entire computational process within BCOT, a small subset usually...

  12. CHAPTER FOUR A NOTIONAL EXAMPLE
    (pp. 21-34)

    This chapter employs BCOT schematically in an application to a notional, highly simplified version of the Global Strike problem described in Davis, Shaver, and Beck (2007). It assumes that the building-block investment options involve buying an aircraft or an upgrade thereof, buying a missile capability, buying some special weapon, and buying specialized capabilities to improve attacks by special operations forces (SOF). We refer to these briefly as the aircraft, missile, weapon, and SOF building blocks. The example also assumes four employment modes: air attack, missile attack, SOF attack, and a joint air-missile-SOF attack.²² In a real application, of course, there...

  13. CHAPTER FIVE CONCLUSIONS AND NEXT STEPS
    (pp. 35-40)

    Chapter 4 illustrated the overall concept of BCOT, which is summarized in Figures 5.1 and Figure 5.2. Figure 5.1 is a simplified depiction, whereas Figure 5.2 is more detailed, showing inputs and outputs. The flow is as follows:

    1. Identify investment building blocks (e.g., a particular new aircraft or a new weapon). Many of these will be available from pre-existing proposals, but a more comprehensive set can be constructed for a given capability area by defining the mission, working through alternative ways of accomplishing the mission, noting the component capabilities and related systems that would be necessary, and highlighting those that...

  14. Appendix A EFFECTIVENESS CALCULATIONS
    (pp. 41-44)
  15. Appendix B SUBTLETIES IN THE CONCEPT OF NEARNESS TO THE EFFICIENT FRONTIER
    (pp. 45-47)
  16. Appendix C A GENETIC ALGORITHM APPROACH FOR IDENTIFYING GOOD CANDIDATE OPTIONS
    (pp. 48-52)
  17. Appendix D CHANGING BUILDING BLOCKS OR SCENARIOS
    (pp. 53-54)
  18. Appendix E CHANGING LIST NAMES (SCENARIOS, FOCUS, ETC.)
    (pp. 55-55)
  19. Appendix F CHANGING PARAMETERS
    (pp. 56-56)
  20. Appendix G ARRAY OPERATIONS USED IN BCOT
    (pp. 57-66)
  21. Appendix H EXCEL-BASED GRAPHICS FOR BCOT
    (pp. 67-68)
  22. BIBLIOGRAPHY
    (pp. 69-70)