Project estimation and selection using the cost: Effectiveness analysis and multi-criteria analysis

• Main Authors: Nikola Č. Petrović, Branko N. Đedović, Dragana N. Petrović
• Format: Article
• Language: English
• Published: University of Defence in Belgrade 2012-07-01
• Series: Vojnotehnički Glasnik
• Subjects: weapons and military equipment; investment projects; investment alternatives; life cycle; project management; costs-effectiveness analysis; multi-criteria analysis; cost-benefit analysis; criterion; weight
• Online Access: http://scindeks-clanci.ceon.rs/data/pdf/0042-8469/2012/0042-84691203168P.pdf

With the desintegration of the former Yugoslavia, the needs for military technique had been significantly reduced. The capacities that exceed the scope and the structure of these needs, for which an export-oriented production would be economically sustainable, should be redirected to the production of regular consumption products. Following the practice of developed countries with multinational character projects and cooperative production of complex military assets would increase the opportunities for such a redirection. That orientation would go in favor of the prevention-based defense policy which is the strategic orientation of our country. Moreover, self-reliance in the production is viable only for some weaponry and military equipment where the economy reaches a full production scale and for which there is a possibility of export. The aim of this study is to show the need for analyzing the socialeconomic sustainability of developing and producing complex weapons and military equipment in a joint venture with the countries in the region and beyond, without jeopardizing the security of the country's current and sustainable security. This analysis is a useful tool not only for rating the project's accceptability, but also for selecting the best alternative among several project variants. It is not possible to monetize entirely the effects of benefits for a society correlating with the introduction into service of complex combat systems; therefore, a cost benefit analysis and multicriteria analysis are used for the evaluation of investment profitability. In the context of the object and purpose of the research, the methods of analysis and synthesis are used as well as the investment evaluation method. A graphic illustration and four tables are given in order to clarify the author's views.