Risk-Based ROI, Capital Budgeting, and Portfolio Optimization in the Department of Defense https://www.dau.edu
FIGURE 4. PROGRAM RANKINGS
PEAT NPV Probabilities 100% SPQ-9B 99.94% SM-2 BLK 99.62% RDDL 97.61% Weather 95.41% BMD 89.90% MH-60R 89.37% CCOPS 77.58% CIWS-CEC 70.11% SSDS 61.34% NIFC-CA
This distinction is generally true for all other metrics. Data fromall metrics are compared to create a numerical ranking fromkey fgures. Although not black and white, this linear ranking helps in decision-making comparative analysis. Figure 5 shows the Probability Density Function (PDF) Curve Overlay where all the programs’ simulation results are overlaid on top of each other. Only the SPQ-9B has a positive NPV across all trials. This fnding is consistent with the results of the ACB Capability Comparison.
FIGURE 5. COMPARISON OF SIMULATED NPV PROBABILITY DISTRIBUTIONS
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Defense ARJ, January 2020, Vol. 27No. 1 : 60-107
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