In this research, we answer the following primary question: Would an advanced analytical model be a more effective metric to estimate total ownership cost (TOC) with life-cycle cost under uncertainty and risk than the current method of life-cycle cost estimates for surface electro-optical infrared (EO/IR) sensors? To accomplish this, we developed and analyzed a computational model for Total Ownership with Life-Cycle Cost Model Under Uncertainty for Surface Electro-Optical Infrared Sensors. During the development of the model, we identified the required data and examined the current Department of Defense (DoD) method for determining system life-cycle costs for defense systems and determined that the proposed model is a useful alternative to the current method of determining the life-cycle costs for EO/IR sensors on surface ships. Finally, we concluded that the developed model can be applied to cost estimating in other sectors of DoD cost projections.

Prepared for the Naval Postgraduate School, Monterey, CA 93943.

Approved for public release; distribution is unlimited.

Naval Postgraduate School