Defense Resource Planning Under Uncertainty an Application of Robust Decision Making to Munitions Mix Planning
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C O R P O R A T I O N Defense Resource Planning Under Uncertainty An Application of Robust Decision Making to Munitions Mix Planning Robert J. Lempert, Drake Warren, Ryan Henry, Robert W. Button, Jonathan Klenk, Kate Giglio For more information on this publication, visit www.rand.org/t/RR1112 Library of Congress Cataloging-in-Publication Data is available for this publication. ISBN: 978-0-8330-9167-3 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2016 RAND Corporation R® is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions.html. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface The goal of this project is to help improve the value and character of defense resource planning in an era of growing uncertainty and complex strategic challenges. Because it is impossible to predict what threats may arise and how defense funding will progress, a new approach is needed to develop robust resource strategies, that is, strategies that perform well over a wide range of threat and funding futures and thus are better at managing surprise. To address this need, RAND researchers applied a proven approach to strategy discovery, Robust Decision Making, or RDM, to defense planning. RDM, a quantitative decision sup- port methodology for informing decisions under conditions of deep uncertainty and complex- ity, has been applied to many policy areas in the last decade. This document explores how the RDM method may be applied to defense resource planning in an application to air-delivered conventional munitions mix planning. This research was conducted under the sponsorship of the Cost Assessment and Pro- gram Evaluation (CAPE) Directorate within the Office of the Secretary of Defense (OSD) by the International Security and Defense Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community. For more information on the International Security and Defense Policy Center, see http:// www.rand.org/nsrd/ndri/centers/isdp.html or contact the Director (contact information is provided on the webpage). iii Contents Preface ........................................................................................................... iii Figures ...........................................................................................................vii Tables ............................................................................................................ ix Summary ........................................................................................................ xi Acknowledgments ............................................................................................ xix Abbreviations .................................................................................................. xxi CHAPTER ONE Introduction ..................................................................................................... 1 Planning with Predictive Failure .............................................................................. 1 Munitions Mix Challenge ...................................................................................... 2 Organization of This Report .................................................................................... 5 CHAPTER TWO The RDM Approach to Munitions Mix Planning ........................................................ 7 Comparison of RDM and Traditional Analysis .............................................................. 7 RDM Enables Decision Makers to Discover Robust Strategies Through Iteration ..................... 8 XLRM Factors Shape the Design of the Experiment .......................................................10 CHAPTER THREE RDM Munitions Mix Analysis ..............................................................................19 Initial Analysis of a Broad Range of Munitions Mix Strategies ...........................................19 Analysis of Potentially More Robust Munitions Mix Strategies ...........................................21 Stress-Testing of Strategies over Many Futures ............................................................. 23 Scenarios That Illuminate the Vulnerabilities of Strategies ............................................... 24 Performance of Big+Deter-Mixed Strategy in the Moderate Scenario ................................... 26 Performance of the Big+Deter-Mixed Strategy in the Extreme Scenario .................................32 Future Focus on Purchase Rules in Addition to Portfolio Goals ..........................................32 CHAPTER FOUR Conclusions .....................................................................................................35 A Robust Munitions Mix Strategy ............................................................................35 The Future of RDM in Defense Planning ...................................................................37 v vi Defense Resource Planning Under Uncertainty APPENDIXES A. The Weapons on Target Model .........................................................................39 B. Experimental Design .....................................................................................49 C. Data .........................................................................................................69 References .......................................................................................................85 Figures S.1. Future Security Environments Used in the RDM Analysis ................................. xiv S.2. Days to Completion Regret, Success Regret, and Success Rates for the Big+Deter-Mixed Strategy for Each of the 361 Futures in the Moderate Scenario ........ xvi 2.1. The RDM Approach ............................................................................... 9 2.2. Historical Security Conditions ...................................................................12 2.3. Future Security Environments Used in the RDM Analysis ..................................13 2.4. Flow of Information Between the WoT Model and the CG .................................14 2.5. Evolution of an Adaptive Strategy ...............................................................16 3.1. Relative Acquisition Costs of Weapons in Three Desired Portfolio Goals ................. 23 3.2. Average Success Rates and Average Costs of Munitions Expended Across Strategies .... 24 3.3. Construction of the Moderate Scenario: Futures in Which Big+Deter-Mixed Has High (Greater Than 90 Percent) Success Rate ........................................... 26 3.4. Maximum Success Regret, Maximum Days to Completion Regret, and Maximum Adjusted Cost Regret in the Moderate Scenario .............................................. 27 3.5. Days to Completion Regret, Success Regret, and Success Rates for the Big+Deter-Mixed Strategy for Each of the 361 Futures in the Moderate Scenario .........29 3.6. Case Study of Future 1016 Comparing Big+Deter-Mixed and Big-Cost Strategies ........ 30 3.7. Case Study of Future 1152 Comparing Big+Deter-Mixed and Big-Cost Strategies .........31 A.1. Target Selection in WoT ..........................................................................41 A.2. Weapon and Target Pairing in WoT............................................................ 42 A.3. A Sample WoT Data File ........................................................................ 46 B.1. Schematic of Campaign Generator in Analytica .............................................. 50 B.2. Big+Deter-Time Total Cost Minimization: Cost/Time Tradeoff for Linear Combinations of (i) and (ii) ......................................................................61 B.3. Big+Deter-Mixed Total Cost Minimization: Cost/Time Tradeoff for Linear Combinations of (i) and (iii) ......................................................................62 B.4. Big+Deter/GPS-Mixed Total Cost Minimization: Cost/Time Tradeoff for Linear Combinations of (iv) and (v) .....................................................................62 B.5. Distributions of Attributes for the 25 Security Environments .............................. 64 C.1. Historic Defense Spending as a Share of GDP .................................................83 vii Tables 2.1. Factors Considered in the RDM Munitions Mix Planning Analysis ........................11 2.2. Uncertain Campaign Attributes .................................................................13