Valuing programmed depot maintenance speed : an analysis of F-15 PDM /
Edward G. Keating, Elvira N. Loredo.
- xvii, 41 pages : illustrations ; 28 cm
Includes bibliographical references (p. 41).
Introduction -- The F-15 and its programmed depot maintenance -- A simple valuation of expedited PDM -- Valuing F-15 PDM speed with declining aircraft valuation -- Robustness explorations -- Conclusions -- Appendix A: calculating PDM acceleration valuations -- Appendix B: PDM speed for new military aircraft.
Part of a larger RAND Project Air Force study on capability-based programming, this report introduces a revealed preference methodology to estimate the value to the United States Air Force of expediting F-15 fighter jet programmed depot maintenance (PDM). Such a valuation estimate would be useful in depot-level cost-benefit analysis. The authors rely on the fact that the Air Force has chosen to pay for intermittent PDM on F-15s to assert that F-15s must have enough value after PDM visits to justify PDM costs. Air Force expenditure data suggest that a typical fiscal year 2005 PDM visit cost about $3.2 million. Using the aircraft valuation curves consistent with PDM being worthwhile, the authors find that expediting an F-15's last PDM visit by a month must be worth at least $60,000. However, using a plausible annual aircraft valuation decline rate, they find that expediting an old F-15's last PDM visit by a month would be worth around $75,000, while expediting a new F-15's first PDM visit by a month would be worth more than $180,000. This report also explores various robustness enhancements. Consideration of aging aircraft issues, for instance, tends to increase the estimated value of expedited PDM.