- This article shows a reusable, extensible, adaptable, and comprehensive advancedanalyticalmodelingprocess tohelptheU.S.Department ofDefense (DoD) with risk based capital budgeting and optimizing of acquisition and programportfolios withmultiple stakeholders while subject to budgetary, risk, schedule, and strategic constraints. The article covers traditional capital budgeting methodologies in industry and explains how these methods can be applied in the DoD by using DoD centric, noneconomic, logistic, readiness, capabilities, and requirements variables. Portfolio optimization for the purposes of selecting the best combination of programs and capabilities is also addressed, as are alternative methods such as average ranking, risk metrics, lexicographic methods, PROMETHEE, ELECTRE, and others. Finally, an illustration fromthe ProgramExecutive Office Integrated Warfare Systems (PEO IWS) and Naval Sea Systems Command(NAVSEA) showcases themethodology’sapplicationindeveloping a comprehensive and analytically robust case study that senior leadership at the DoD may utilize to make optimal decisions. - - Risk-Based ROI, CAPITAL BUDGETING, AND PORTFOLIO OPTIMIZATION IN THE DEPARTMENT OF DEFENSE Johnathan Mun
- DOI: https://doi.org/10.22594/dau.19 - 829.27.01 Keywords: Risk Analysis, Decision Modeling, Simulation, Predictive Forecasting
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