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Activity title

Costing Support for Force Structure Studies

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System Analysis and Studies

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Awaiting Publication

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capability management, Capability Planning, Cost analysis, force structure, Long Term Defence Planning, portfolio management, program, Simulation, strategic planning


Cost analyses are an important part of long term defence planning. In order to be able to define future defence structures, it is imperative to be able to make good predictions of defence expenditures in a 10 – 30 years perspective. Cost analysis for force structure studies will also be beneficial to decision makers to apply the resources of military organisations in the best possible way. There are many aspects to such analyses: Data collection, database development, computation models and methods and prediction of defence specific cost escalation (for both acquisitions and operating cost) are some of the most important ones. Furthermore more nations will in the future not acquire weapons systems solely, there is a tendency that acquisition programs will be more considered from a capability point of view. If the acquisition of new weapon systems will be more capability based, the requirement will grow for methodologies and models that can be used to estimate the costs of capabilities. This will also influence force structure studies.


The main aim of this TG is to develop a common methodology for Capability Costing and Cost Analysis as part of Force Structure Studies. Subobjectives include: • Identify current work in Force Structure Studies. • Identify current work in Capability Costing. • Identify gaps in current work within these fields. • Discuss and propose methodologies for capability costing and cost analysis as part of Force Structure Studies. The expected product of this task group will be a technical report covering the best practice for capability costing and cost analysis as part of force structure studies


Propose a best practice for capability costing and cost analysis as part of force structure studies, including: o A list of terms and definitions for e.g. capability. o Methods to predict defence specific cost escalation. o Risk analysis for costing force structures the team will also investigate the influence of capability portfolio analysis on the methodology for capability costing.

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