Abstract
The Norwegian Defence Research Establishment (FFI) supports the Norwegian Ministry of Defence with quantitative analyses for its long-term defence planning. As part of this activity, FFI has developed a stochastic model for optimizing investments in materiel. The model maximizes the capabilities of the force structure (i.e., military personnel, equipment, and materiel) by allocating materiel acquisition projects over time, given certain constraints and considering the uncertainty of future-year budgets. The objective of the model is to make decisions about current acquisition projects, and also provide flexibility for future decisions. It models future budgets using a set of budget scenarios. The model helps decision makers explore project acquisition choices, and improve their knowledge of the total investment picture and of individual projects. The model has given FFI new insights into the dynamics of acquisition planning and the necessity for considering future uncertainty.
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