Naval Postgraduate School research summaries

Navy Supply Corps Newsletter, May-June, 2004 by Phil Candreva

One of the most important aspects of the Naval Post graduate School experience is the requirement for a student to complete a thesis for an M.B.A. application project. Below are abstracts of theses written by Supply Corps officers who have recently graduated. Most operations research and business school academic disciplines are represented and the focus of analysis ranges from direct war fighting support to analyses of manufacturing concerns and local schools, the lessons from which are more indirect.

Anyone desiring more information or a copy of a thesis, should visit the NPS Dudley Knox Library website at http://library.nps.navy.millhome/ theses.htm. Please note that due to proprietary or classified content, the distribution of some theses is restricted.

Contractor Logistics Support of the Medium Tactical Vehicle Replacement (MTVR) during Operation Iraqi Freedom

By Maj. Brian R. O'Leary, USMC and LCDR Herman S. Romero, SC, USN

Abstract: The MTVR is being fielded by the Marine Corps as a replacement of its aging fleet of five-ton cargo trucks. The MTVR program includes the Marine Corps' first use of CLS for a large tactical ground transportation vehicle. MTVRs were employed during the buildup, major combat, and initial occupation phases of Operation Iraqi Freedom (OIF). This M.B.A. project examines the role of CLS in the supply and maintenance support of the MTVR during the aforementioned phases of OIF.

Through a literature study of CLS-related materials, examination of CLS contracts between the Marine Corps and Oshkosh Truck Company, interviews with Marine Corps MTVR program management personnel, and interviews with those who maintained and operated MTVRs during OIF; an in-depth study is presented. Analysis is applied to the data gathered to develop recommendations to optimize the use of CLS in support of the MTVR in a combat environment.

Information Technology Portfolio Management and the Real Options Method: Managing the Risks of IT Investments in the Department of the Navy

By LCDR Jeffery P. Davis, SC, USN

Abstract: The FY 2003 Federal Budget contains provisions for more than $52 billion in IT investments. The Navy portion of those funds is more than $5 billion. Rapid change and increasing uncertainty in the technology field has resulted in a high degree of financial risk associated with IT capital investment decisions. The Federal Chief Information Officer (CIO) Council has endorsed IT Portfolio Management (ITPM) as an approach for making IT investment decisions. This research draws upon ITPM implementation strategies currently employed by the Department of the Navy (DON) and provides recommendations for managing the inherent risk in IT investments, specifically the application of the Real Options Method (ROM). ITPM provides a thoughtful framework for managing the capital investment process but still depends primarily on traditional methods such as EVA, IRR and NPV for evaluating IT investment alternatives.

This study uses the Naval Supply Systems Command (NAVSUP) Automatic Identification Technology (AIT) program to illustrate how ROM can be used to supplement these traditional valuation methods and aid in managing investment risks. IT capital investments are inherently linked to organization strategy and the uncertainties that define the future. This study demonstrates how ROM can allow managers to capitalize on the uncertainties of IT investment decisions to implement organization strategy.

Cost Benefit Analysis of the Department of the Navy's F-5 Tiger H Contract

By LCDR Jeffery C. Brown, SC, USN; LCDR Robert K. DeGuzman Jr., SC, USN and LCDR Thomas S. Fulford III, SC, USN; and LT Jesse E. Porter Sr., SC, USN

Abstract: This project consists of a Cost Benefit Analysis (CBA) of the costs, issues, and effects associated with replacing the F-5E/F Tiger II aircraft with F/A-18A/B. The three alternatives analyzed are (1) continued operation of the F-5E/F, (2) replacement of the F-5 with F/A- 18A/B by 2008, and (3) installation of 4th generation pulse-doppler radar in the F-5E/F by 2008. The objective was to compare the three alternatives, choosing the alternative that provides the greatest net benefit and most efficient use of resources. The analysis involved data collection of operational costs per flight hour, total cost over the life of the program, and contractor supported maintenance. Datum for this research project were gathered from the actual maintenance contracts for both the F-5E/F Tiger and F/A-18A/B aircraft at Fallon, Nev., Naval Aviation Systems Command, and OFC-20. Our results suggest that NAVAIR should continue to use the F5E/F Tiger II aircraft for the VFC-13 adversary training mission through 2014.

Supply Chain Analysis of Gabilan Manufacturing, Inc.

By LCDR Miguel Fouts, SC, USN; LCDR Dan Hodgson, SC, USN; LCDR Andrew Darnell, SC, USN; LCDR Jim Neuman, SC, USN and LT Danny Kachenchai, USN.

Abstract: The purpose of this M.B.A. project was to investigate and provide alternative supply chain management strategies to assist Gabilan Manufacturing Inc. in reducing supply chain costs. This project was conducted with the sponsorship and assistance of Gabilan Manufacturing Inc. There were two primary goals for this project. The first was to identify and document the impact of forecasting errors in an environment where customer forecasts are available to the vendor. The second was to investigate the costs associated with relocating cutting operations as well as the procurement impact of a new cutting machine. Both of these goals relate directly to the overall effort to reduce supply chain costs without a loss of service level to Gabilan's customer.