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<p>The purpose of this study was to determine the relationship between operations tempo (OPTEMPO) and operational costs. This study was performed at the request and with the support of OPNAV N82, the Office of Budget (FMB). The goal of this project was to increase the flexibility, scalability, and justifiability of the analytical model used by FMB to budget for ship operations. This study provides a detailed description of the model including modifications made by the only other study of the FMB budgeting model. The core of the analysis centered around a regression of OPTEMPO and expenditure data. From the resultant regression equations, incremental costs of ship operations could  be distilled. However, during the preliminary data validation, significant correlations were found only within the Arleigh Burke Destroyer Class of ship. These correlations were likely spurious and due to the large number of new commissionings within that class over the period of study. The lack of ability to define any relationship between OPTEMPO and expenditures is possibly due to complete expenditure of fund allocations regardless of actual costs.
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<br>Subjects: Ships; Cost of operation</div>
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Gorman, Tadd H.</div>
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