Case Study

Office of the Assistant Secretary of the Army

(Financial Management and Comptroller)

Cost-Benefit Analysis Training

Practical Exercise: Army Prepositioned Stocks (APS)

Case Study

Please note:

* This exercise is based on a real-world analysis that was conducted to support a HQDA decision-maker. It has been modified in two ways. First, all classified material has been deleted. Second, we have taken some liberties with the APS and military construction programs in order to support certain teaching points and simplify the exercise.

* This document is intended to provide a clear, easy-to-follow description of the scenario and the analytical requirement. In actual practice, it is usually not this easy to obtain the information needed to support a cost-benefit analysis (CBA). The analyst must identify all the information needed to support the analysis, and then must identify the right subject matter experts who have the information. In some cases, this can be a challenge.

Program description (for those who are not familiar with APS): Under the APS program, the Army prepositions stocks of wartime equipment in selected locations around the world. APS reduces deployment time compared to what would be required if the equipment were all stored at depots in the Continental United States (CONUS). APS costs include the lease, purchase, or construction of storage facilities and the care of supplies in storage (COSIS). Under COSIS, equipment stored at APS sites undergoes periodic checks and maintenance to maximize its readiness for deployment. Construction costs, if any, are funded from the Military Construction, Army appropriation (MCA). All other costs are funded from the Operations and Maintenance, Army appropriation (OMA). For this exercise, the cost does not include the cost of the stored equipment or the cost of transporting the equipment to or from the APS locations.

Your Role: It is September 2011. You are an analyst on the...