Using the Steel-Vessel Material-Cost Index to Mitigate Shipbuilder Risk |
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| Author:
| Keating, Edward G.
Birkler, John
Murphy, Robert
Schank, John F. |
| Contribution by:
| National Defense Research Institute (U.S.) Staff, |
| ISBN: | 978-0-8330-4229-3 |
| Publication Date: | Apr 2008 |
| Publisher: | RAND Corporation, The
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| Book Format: | Paperback |
| List Price: | USD $20.00 |
Book Description:
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The more accurately a cost index captures a shipbuilder1s risk, the less the Navy should have to pay its shipbuilders. The Navy uses such indexes to correct for significant cost risks outside its shipbuilders1 control. A longtime material-cost index in Navy shipbuilding is the steel-vessel index, but it is outdated and volatile. The authors urge the Navy to develop a modern-vessel index that more appropriately represents the materials used today.
The more accurately a cost index captures a shipbuilder1s risk, the less the Navy should have to pay its shipbuilders. The Navy uses such indexes to correct for significant cost risks outside its shipbuilders1 control. A longtime material-cost index in Navy shipbuilding is the steel-vessel index, but it is outdated and volatile. The authors urge the Navy to develop a modern-vessel index that more appropriately represents the materials used today.