An Examination of the Relationship Between Usage and Operating-and-support Costs of U.S. Air Force AircraftSystematically examining the empirical relationship between multiple U.S. Air Force systems' expenditures, flying hours, and fleet sizes, this research suggests a more sophisticated way to think about Air Force costs than is currently used. The report discusses prior research on cost-per-flying-hour calculations--i.e., the practice of multiplying projected flying hours by a cost-per-hour factor in certain segments of the budgetary process. This report looks across Air Force mission designs (systems) and estimates general, historical relationships between expenditure levels and flying hours. A fixed-plus-variable cost structure is estimated with expenditures neither increasing nor decreasing in proportion to flying hours. The author concludes with the policy implications of his findings, noting that current Air Force budgeting approaches likely overestimate funding needs when flying hours are increasing and underestimate needs when flying hours are decreasing. |
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1.1 Operations personnel 1.2 Maintenance personnel 1.3 Other mission 2.1 POL/energy consumption 2.5 Other unit-level 3.0 Intermediate maintenance 4.0 depot maintenance 6.1 Support equipment 6.3 other recurring 7.1 Personnel support 7.2 Installation support AFTOC Air Force Cost Air Force's CAIG 4.0 expenditures CAIG categories category's Contractor logistical support contractor support cost per flying CPFH factors Ed Keating EEIC expenditure categories Expenditure Categorization Scheme expenditure data expenditure level Figures 1.1 fixed costs fleet sizes Fleet-Wide Flying Hours flying hours increase flying-hour FY 2006 dollars FY dummy variables hours and fleet hours or fleet independent variables Linear Regression Ln(FH Ln(TAI maintenance Ln(CAIG MAJCOM millions of FY natural log number of aircraft omitted operating and support percent possessed hours proportion to flying recurring investment Regression Coefficient Estimates Relationship Between Fleet-Wide REMIS SAF/FM Breakout standard error Support equipment replacement U.S. Air Force Variable cost variable with flying vary with flying Yes Yes Ln(CAIG