The optimization of defence expenditure

The paper discusses some of the problems of planning defence expenditure and suggests that there is a need for aggregated quantitative models to support that task. Such a model is presented, for a hypothetical case. The model is explained through a series of influence diagrams, after which a quantitative simulation model is described, with equation detail in an Annex. The model is subjected to dynamic optimisation to determine optimum patterns of expenditure. Broad priorities are deduced from the patterns.