Project Stoddert, A System Dynamics Model of Affordability Using Utility Theory

In a time of decreasing defense budgets, the long-term affordability of different Navy warfighting and support systems is an increasingly important consideration when deciding between competing systems, and is also increasingly more difficult to objectively measure. SPS proposes an innovative approach for developing a model that measures the affordability of existing systems and predicts the affordability of alternative systems. Our proposed Project Stoddert honors Mr. Benjamin Stoddert, the first Secretary of the Navy. Our approach will establish the theoretical bases for developing executable models to measure the affordability of complex weapon systems. We will employ a unique combination of system dynamics and utility theory to capitalize on the strengths of these two powerful decision analysis techniques. The key innovative aspects of our approach are: (1) using a system dynamics model which can employ qualitative data as well as quantitative data to measure affordability, and (2) applying utility theory to provide users a formal method of determining their inputs to the model. This approach has the best chance for success and for advancing the state-of-the-art in affordability measurement and prediction because it uses two established decision analysis techniques to attack the most important aspects of the affordability measurement and prediction problem.