Optimization in performance-based logistics contracts

Abstract

Performance-based Logistics (PBL) contracts require metrics and methodologies set in a systemic way to provide readiness for the warfighter at reasonable costs. There must be a clever and verifiable connection of metrics in order to access and analyze data and to deliver sound and consistent inputs for the entire support system to accomplish its goals. A system of incentives and penalties usually takes place and suggests functions to be maximized and/or minimized in a multi-criterion and highly integrated environment. This study deals with the optimization of the entire setup of Performance-Based Logistics contracts and is limited to a preliminary study in a simple scenario that has showed a promises results. A mixed method, using both the £-Constraint and Goal Programming is proposed to model the case. Results indicate that metrics used for reliability, maintainability, availability and supportability (RAMS) and costs can be optimized simultaneously for clever contracts.