Cost Benefit Optimisation to achieve Affordable Force ... · Cost Benefit Optimisation to achieve...
Transcript of Cost Benefit Optimisation to achieve Affordable Force ... · Cost Benefit Optimisation to achieve...
Cost Benefit Optimisation to achieve Affordable Force Structures
Dale Shermon, PRICE Systems (UK)
Zachary Jasnoff, PRICE Systems (US)
Original TruePlanning for Concepts task sponsored by Philip Weston, UK MOD/CAAS
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Objective
Review the TruePlanning for Concepts Catalogue
Consider the benefits of the Through Life Estimating capability of TruePlanning
Demonstrate the optimisation capability of Phoenix Model Centre with TruePlanning
Conduct a Combine Operational Effectiveness and Investment Appraisal (COEIA)
Case study
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Agenda
TruePlanning for Concepts
Through Life Estimating (TLE)
Model Centre and TruePlanning
TruePlanning and Economic Analysis (EA)
Optimisation Case study - COEIA
CAVEATS
This is a case study for demonstration only.
•The data contained within it is example data only and does not represent any current or future projects.
•The names reflect type of platform and costs/ weights etc are altered and do not reflect anything other than ' gross order of magnitudes.
CAVEATS
This is a case study for demonstration only.
•The data contained within it is example data only and does not represent any current or future projects.
•The names reflect type of platform and costs/ weights etc are altered and do not reflect anything other than ' gross order of magnitudes.
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
TruePlanning for Concepts catalog
UK MoD and PRICE Systems Custom built conceptual models
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Populating TruePlanning for Concepts from Excel
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Importing MS-Excel Force Structure into TruePlanning
High level Force Structure built as a Product Breakdown Structure (PBS)
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Agenda
TruePlanning for concepts
Through Life Estimating (TLE)
Model Centre and TruePlanning
TruePlanning and Economic Analysis (EA)
Optimisation Case study - COEIA
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Analogy [near neighbour]
Parametric
[Extrapolation From] Actuals
Engineering [Bottom - Up]
Appropriate methodology for project phasePresented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
DetailedDetailedDetailedParametricParametricTop-downTop-down
DisposalIn-ServiceManufactureDemonstrationAssessmentConceptPre-concept
TruePlanning for Concepts
TruePlanning for Manufacturing
TruePlanning for Hardware, Software, Information Technology, COCOMO
TruePlanning for Custom Models
TruePlanning framework
Adopting the right model for the correct phase in a single framework
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Complexity generation in True ConceptsPresented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Populating TruePlanning for Hardware
Platform complexities from the True Concepts model
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
TruePlanning for Hardware - Complexity inputs
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Through Life Estimating - Comparison of True Concepts and True Hardware
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Agenda
TruePlanning for concepts
Through Life Estimating (TLE)
Model Centre and TruePlanning
TruePlanning and Economic Analysis (EA)
Optimisation Case study - COEIA
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
TruePlanning – Enterprise capability
© 2009 PRICE Systems, LLC. All Rights Reserved.
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Agenda
TruePlanning for concepts
Through Life Estimating (TLE)
Model Centre and TruePlanning
TruePlanning and Economic Analysis (EA)
Optimisation Case study - COEIA
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Guidelines for conducting a COEIA
Combined Operational Effectiveness Investment Appraisal (COEIA) is a formal comparison of acquisition options on a cost versus effectiveness basis to satisfy a User Requirement.
The COEIA is an integral part of the Investment Approvals Board (IAB) procedure.
The COEIA may be considered an Investment Appraisal, used to assess the effectiveness of differing acquisition options in an objective and where possible, quantitative way. Its purpose is to select one of the acquisition options, before proceeding further.
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Combine Operational Effectiveness and Investment Appraisal (COEIA)
Mea
sure
of E
ffect
iven
ess
(MO
E)
Total Whole Life Cost (NPV)WLCObjective
WLCThreshold
MOEThreshold
MOEObjective
Unacceptable MOE
Optimised Total Whole Life Cost
Unaffordable Whole Life Cost
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
1
3
4
5
1 34
Constant Cost Constant Performance
5 22
Mea
sure
of E
ffect
iven
ess
(MO
E)
Total Whole Life Cost (NPV)WLCObjective
WLCThreshold
MOEThreshold
MOEObjective
Mea
sure
of E
ffect
iven
ess
(MO
E)
Total Whole Life Cost (NPV)WLCObjective
WLCThreshold
MOEThreshold
MOEObjective
Simplifying the analysisPresented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
TruePlanning Cost Benefit Capability
TruePlanning calculates Business Case statistics including the Net Present Value (NPV)
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Agenda
TruePlanning for concepts
Through Life Estimating (TLE)
Model Centre and TruePlanning
TruePlanning and Economic Analysis (EA)
Case study - COEIA
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Scenario for Freedonia
The Freedonia Defence department has exceeded the budget for acquisition. It need to reshape the structure of its acquisition program within a number of constraints.
Constraints– It should be able to fight a small conflict outside its borders
within Freedonia’s maximum achievable MOE objective of 8,000
– Total Force Structure should not exceed £13bn in acquisition cost
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Force Structure by Scenario Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Freedonia Measure of Effectiveness (MOE) Simulation Force Structure (EXCEL)
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Force Structure Simulation - ModelCenter TruePlanning Plug In
TruePlanning Plug In for Model Center
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Force Structure Simulation - ModelCenter EXCEL Plug-In
EXCEL Plug In for Model Center
Force Structure ScenarioV High
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Force Structure Simulation - ModelCenter Scenario Linkage Between EXCEL Force Structure and TruePlanning model
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Force Structure Simulation - ModelCenter ModelCenter Parametric Simulation Tool
Run Force StructureScenarios 1-5(VLow to VHigh)
For each Scenario-Estimate the cost of each asset in TruePlanning-Calculate the MOE-Plot the Results
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Freedonia Force Structure Simulation – ModelCenter Parametric Simulation Tool - Results
VLow
Low
Medium
High
VHigh
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Force Structure Simulation – Scenario Analysis
Each scenario represents a complete, detailed Force Structure solutions modeled through TruePlanning
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Freedonia COIEA
Evaluation of the five Force Structure scenarios through Model Centre simulation and TruePlanning reveals:– Freedonia is only capable of supporting low to medium
conflicts given achievable MOE and budget constraints.
– Supporting a High Level Conflict Fredonia can achieve the MOE, but exceeds the budget.
– Supporting a Very High Level Conflict, Fredonia cannot achieve the desired MOE or budget.
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
© 2010 PRICE Systems, LLC. All Rights Reserved.
Summary
The TruePlanning for Concepts Catalogue is applicable methodology for early program costing estimating
True Concepts generation of Complexities can feed True Hardware demonstrating the benefits of the Through Life Estimating capability
3rd Generation TruePlanning has significant enterprise capability including the quick optimisation capability of Phoenix Model Centre with TruePlanning
Demonstration of an optimised Combine Operational Effectiveness and Investment Appraisal (COEIA)
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com
Cost Capability Optimization to Achieve Affordable Force Structures
Dale Shermon, PRICE Systems (UK)Zachary Jasnoff, PRICE Systems (US)
Original TruePlanning for Concepts task sponsored by Philip Weston, UK MOD/CAAS
Presented at the 2010 ISPA/SCEA Joint Annual Conference and Training Workshop - www.iceaaonline.com