Resource efficiency in aircraft production

Resource efficiency in aircraft production

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Article ID: iaor1989228
Country: United States
Volume: 35
Issue: 3
Start Page Number: 443
End Page Number: 458
Publication Date: Jun 1989
Journal: Naval Research Logistics
Authors: ,
Abstract:

This article examines measures of economic efficiency in aircraft production. In particular, a type of nonlinear frontier estimation is contrasted with more traditional methods for estimating a dynamic cost function. This cost function is grounded in economic theory, and it is consistent with knowledge in the aircraft-production process. The model includes the effects of both learning and production rate on total program costs. The usefulness of the model is demonstrated with an example that relates to the acquisition of military equipment. It is shown through various sensitivity analyses that an alternative procurement policy for an aircraft program could have resulted in increased efficiency and hence a lower total program cost to the government.

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