1. Lesson 11
A Trade-off Analysis

2. Topic 1: Introduction What’s in it for me?
DoD systems must meet user needs, provide a military capability, and be affordable. The Affordable System Operational Effectiveness (ASOE) Model establishes trade spaces that are analyzed and balanced to achieve the Key Performance Parameters (KPP) and Key System Attributes (KSA) that define their boundaries.
Supportability trade-offs address the key relationship of Reliability and Sustainment Cycle Time, and the impact of these parameters on Life Cycle Cost. Other trade-offs such as Reliability Centered Maintenance (RCM) Analysis, Maintenance Task Analysis (MTA) and Level of Repair Analysis (LORA) address fundamental trades within the Maintenance Concept and the development of the Product Support Package.
Trade-off analyses are linked to requirements. This construct guides the analyses and establishes criteria for the evaluation of results.

3. Technology Maturation & Risk Reduction
Life Cycle Management Framework Where Are You? What Influence Do You Have?
Technology Maturation & Risk Reduction 
You Are Here
Here, insert graphic that highlights your phase.
Adapted from SAE GEIA-HB-0007

4. TLO: Conduct Reliability & Maintainability (R&M), Availability, Cost/Affordability Trade-off Analysis
Topic
Objectives
Topic 1: Introduction
Welcome
Where are you? What influence do you have?
Topic 2: Overview of Trade-off Analysis
Relate Reliability & Maintainability (R&M), Availability, Cost/Affordability Trade-off Analysis to Supportability and Supportability Analysis
Topic 3: Affordability and Should-Cost
Relate Affordability and Should-Cost to Trade-off Analyses within the context of Better Buying Power
Topic 4: Performing Trade-off Analyses
Apply Reliability & Maintainability (R&M), Availability, Cost/Affordability Trade-off Analysis
Topic 5: Exercise & Simulation
Identify key inputs for updating the Radio #1 LORA
Determine which radio is the best alternative for the Strike Talon
Topic 6: Summary

5. Topic 2: A Trade-off Analysis Overview

6. What is the Purpose of a Trade-off Analysis?

7. Trade-off Opportunities
The ASOE model has four distinct intersections
representing program performance and Sustainment objectives. Balancing these priorities requires a series of trade-off analyses.
Technical Performance
Supportability
Process Efficiency
Life Cycle Cost
Functions
Reliability
Production
Total Ownership Cost
Capabilities
Maintainability
Maintenance
Support Features
Logistics
Operations

8. Technical Performance Technical Performance
Trade-off Opportunity: Technical Performance vs. Maintainability vs. Cost
Technical Performance
Functions
Capabilities
Technical Performance
Functions
Capabilities
Supportability
Reliability
Maintainability
Support Features
Supportability
Reliability
Maintainability
Support Features
Life Cycle Cost
Total Ownership Cost
Process Efficiency
Production
Maintenance
Logistics
Operations
Process Efficiency
Production
Maintenance
Logistics
Operations

9. Technical Performance Technical Performance
Trade-off Opportunity: Technical Performance vs. Process Efficiency vs. Cost
Technical Performance
Functions
Capabilities
Technical Performance
Functions
Capabilities
Supportability
Reliability
Maintainability
Support Features
Supportability
Reliability
Maintainability
Support Features
Life Cycle Cost
Total Ownership Cost
Process Efficiency
Production
Maintenance
Logistics
Operations
Process Efficiency
Production
Maintenance
Logistics
Operations

10. Trade-off Opportunity: Reliability vs. Maintenance vs. Cost
Technical Performance
Functions
Capabilities
Technical Performance
Functions
Capabilities
Supportability
Reliability
Maintainability
Support Features
Supportability
Reliability
Maintainability
Support Features
Life Cycle Cost
Total Ownership Cost
Process Efficiency
Production
Maintenance
Logistics
Operations
Process Efficiency
Production
Maintenance
Logistics
Operations

11. Trade-off Opportunity: OPTEMPO vs. Maintenance vs. Cost
Technical Performance
Functions
Capabilities
Technical Performance
Functions
Capabilities
Supportability
Reliability
Maintainability
Support Features
Supportability
Reliability
Maintainability
Support Features
Life Cycle Cost
Total Ownership Cost
Process Efficiency
Production
Maintenance
Logistics
Operations
Process Efficiency
Production
Maintenance
Logistics
Operations

12. Trade-off Ao vs. Cost Criteria
85% Availability is the knee of the curve
Objective
Threshold
80% Availability is reached here
AO vs. Cost has a steep slope from 0 – 80%: good return on investment in Availability
After 85% the AO vs. Cost curve flattens out; this represents the knee of the curve—buying a single percent of Availability beyond the knee costs many times more than before this point
This knee is the point of diminishing return on Availability investment
Ao Availability
Cost
Task Duration (Min)
10% % % % % % % % % %
Percent Funding

13. When Do Trade-off Analyses Occur?
LCSP
BCA
Technology Maturation & Risk Reduction 

14. Trade-off Analysis Inputs and Outputs
Requirements
Cumulative Trades
Indentured Parts List
Trades
Logistics Product Data
Program Schedule
ICD $
Inputs
CDD
Trade-off Analysis
Process
Make comparisons and balance options
Recommend best option over total life cycle
Refined Analyses
Trade
IPT Consult(s)
Update
Outputs

15. Trade-off Analysis and User and Program Documentation
Technology Maturation & Risk Reduction 
ICD $
CDD/
CPD
Support $
Post-Milestone A
Pre-Milestone A

16. LCL’s Role in a Trade-off Analysis

17. LCL’s Role in a Trade-off Analysis – Example

18. Topic 3: Affordability and Should-Cost

19. Affordability Drive Reliability up to optimum level
Drive Sustainment cycle time down to optimum level

20. Affordability and the ASOE Model

21. Should-Cost
Should-Cost estimates affect/inform negotiations with industry over contract costs and incentives. Should-Cost…
Challenges the LCL to lower costs
Helps to manage all costs
Helps to place focus on controlling the cost of work being done and what is expected to be done $

22. Affordability and Should-Cost
Pre-Milestone B
Affordability requirement may not be defined based on budget.
Should-Cost helps to control program overhead, unproductive expenses, and reduce contracted development costs.
It is a good time to investigate opportunities to reduce future costs.

23. Topic 4: Performing Trade-off Analyses

24. Trade-off Analysis Approach
This analysis approach emphasizes the LCL’s role in performing a trade-off analysis which balances requirements, Supportability, and total Life Cycle Costs.
Build a plan, select a tool, and collect data
Establish matrix, run calculation, and analyze alternatives
Update trade-off report, inform the appropriate IPT(s), and make appropriate updates

25. Trade-off Analysis Set Up
1.1
1.2
1.3
1.4
Define Feedback Trigger
Build Plan
Identify/Select Tool
Collect/Validate Data
Collect/Load Tech Data
Define Methodology
Our planning considers four main areas:
1.1 Feedback – Collect and review feedback
1.2 Plan/Methodology – Develop a plan/methodology for setting up the trade-off analysis
1.3 Tool – Select the appropriate tool for compiling the data for your analysis
1.4 Data – Validate the data import, coordinate error updates
Triggers: Logistics, design, product support management IPTs; new survey information, T&E event, specification sheet

26. Set Up – Define Feedback Trigger2 2 3 2
Feedback
Trade-off Report Alternatives
Reliability is out of threshold
Life Cycle Cost projections are high
Technical data rights assertion impact 1
Feedback = Reliability Out of Threshold
ASOE diagram shows Lower Reliability & Higher Costs = Less Affordable & Effective System
Graph shows intersection of the Target Area at higher Sustainment Cycle Time and lower Reliability contributing to increase O&S cost. Therefore, the cost curve shifts up and to the right. 1 2 3

27. Set Up – Build Plan 1 2 3 Define Trade-off Opportunities
Technology Maturation & Risk Reduction  1 2 3
Define Trade-off Opportunities
Establish Milestones
Identify Stakeholders
Import/Validate Data 8 4
Identify Inputs/Criteria $
CDD
Criteria
Gather Data 7
IPS Elements
Select Tool 6
Define Methodology 5

28. Set Up – Build Plan Identify Criteria
A criterion is “A test, principle, rule, canon, or standard, by which anything is judged or estimated.” (2nd edition Oxford English Dictionary)
With respect to trade-offs, criteria:
Must be in terms that are important to the decision maker
Must reflect the best interests of the Program in terms of BBP and user requirements
Effective Criteria
Definition
Directional
Minimize or maximize the outcome
Concise
Provide clear definition of analysis goal
Complete
Answer the question “What does it take to deploy an affordable and effective system?”
Clear
Define parameter and data

29. Set Up – Build Plan Identify Criteria (cont.)
Types of criteria:
Qualitative Criteria – a yes or no; a judgment without numerical measurement
Quantitative Criteria – a matter of degree (e.g., good, better, best) or numerical benefit (e.g., $2M, $1.5M)
Screening Criteria – help to disqualify an alternative early in the analysis
Decision Criteria – measures that support achieving objectives such as Operations and Maintenance KPPs, KSAs, and concepts
Criteria Type
Example
Analysis Term
Qualitative
Decision
The resulting Maintenance Plan alternative does not comply with the Maintenance Concept
Non-economic
Quantitative
The resulting Maintenance Plan alternative results in a cost of $150M over 20 years
Economic
Screening
The item under investigation does not meet form, fit, and function parameters to consider for evaluation

30. Set Up – Define Methodology
Technology Maturation & Risk Reduction     1 2 3
Define Trade-off Opportunities
Establish Milestones
Identify Stakeholders 
Import/Validate Data 8 4
Identify Criteria/Inputs $
CDD
Criteria
Gather Data 7
IPS Elements
Select Tool 6
Define Methodology 5

31.      Set Up – Select Tool 1 2 3 Define Trade-off Opportunities
Technology Maturation & Risk Reduction     1 2 3
Define Trade-off Opportunities
Establish Milestones
Identify Stakeholders 
Import/Validate Data 8 4
Identify Criteria/Inputs $
CDD
Criteria
Gather Data 7
IPS Elements 
Select Tool 6
Define Methodology 5

32. Set Up – Gather and Import/Validate Data
Technology Maturation & Risk Reduction     1 2 3
Define Trade-off Opportunities
Establish Milestones
Identify Stakeholders 
Import/Validate Data 8 4
Identify Criteria/Inputs $
CDD
Criteria
Gather Data 7
IPS Elements  
Select Tool 6
Define Methodology 5

33. Construct Matrix/Framework Select Best Alternative
Trade-off Analysis
Our analysis consists of four main areas:
2.1 Construct Matrix/Framework – Organize alternatives and criteria into a usable format
2.2 Run Calculation – Modify appropriate data (update models), tool fills in decision matrix
2.3 Analyze Alternatives – Examine resulting values between new results and baseline (i.e., rank/balance alternatives using selected criteria)
2.4 Select Best Alternative – determine which alternative best meets the objective
2.1
2.2
2.3
2.4
Construct Matrix/Framework
Run Calculation
Analyze Alternatives
Select Best Alternative

34. Analysis – Construct Matrix/Framework
Tips on constructing the decision matrix:
Includes only those criteria upon which the decision will be based
User requirements and lowest affordable life cycle cost
Consists only of alternatives from which a recommendation will be picked
Forms the basis for a recommendation to the decision maker
Decision Matrix
Alternative
Reliability Investment Cost ($M)
Investment Break Even Point (Years)
Total Maintenance Cost over 20 Years ($M)
Operational Availability (%)
Obsolescence Risk 1 2 3 4
Under
Construction

35. Analysis – Run Calculation
Tips on running calculations:
Complete calculations using the selected tool (e.g., COMPASS and the Evaluator report)
Populate the decision matrix with the report data
Decision Matrix
Alternative
Reliability Investment Cost ($M)
Investment Break Even Point (Years)
Total Maintenance Cost over 20 Years ($M)
Operational Availability (%)
Obsolescence Risk 1 8 11
100 84
Slight increase 2 4 5
120
81.5
Modest increase 3
150 78
No change
125 81
Slight decrease

36. Analysis – Analyze Alternatives
Tips on analyzing the alternatives:
Eliminate any alternative that is beat significantly by two or more alternatives
Eliminate any alternative that does not conform to major policies/requirements
If there is no clear cut winner, transform calculations into another scale
Policy/Req’t:
Ao ≥ 80%
Decision Matrix
Alternative
Reliability Investment Cost ($M)
Investment Break Even Point (Years)
Total Maintenance Cost over 20 Years ($M)
Operational Availability (%)
Obsolescence Risk 1 8 11
100 84
Slight increase 2 4 5
120
81.5
Modest increase 3
150 78
No change
125 81
Slight decrease
Remove Alternative 3 because it fails to meet program policy Ao of 80%.

37. Analysis – Analyze Alternatives Revised Alternatives
Tips on analyzing the alternatives:
Eliminate any alternative that does not conform to major policies/requirements
Transform calculations into another scale if there is no clear cut winner 
Cost direction is not good because a higher number is a worse result
Change risk to number ranking
Decision Matrix
Alternative
Reliability Investment Cost ($M)
Investment Break Even Point (Years)
Total Maintenance Cost over 20 Years ($M)
Operational Availability (%)
Obsolescence Risk 1 8 11
100 84
Slight increase 2 4 5
120
81.5
Modest increase 3
125 81
Slight decrease
Obsolescence Risk 2 1 3

38. Analysis – Analyze Alternatives Transform Data
Tips on analyzing the alternatives:
Eliminate any alternative that does not conform to major policies/requirements
Transform calculations into another scale if there is no clear cut winner 
How do I transform calculations?
1. Take the reciprocal of the first three columns to change the criteria direction
Alternative 1 - $8M cost becomes .125 and Alternative 4 - $3M becomes .333
2. Now cost is moving in the right direction: Alternative 4 (.333) > Alternative 1 (.125)
Alternative 4 cost is now better than Alternative 1 cost – right direction
Availability direction is okay because a higher number is better.
Decision Matrix
Alternative
Reliability Investment Cost (Transformed)
Investment Break Even Point (Transformed)
Total Maintenance Cost over 20 Years (Transformed)
Operational Availability (%)
Obsolescence Risk 1
0.125
0.091
0.01 84 2
0.25
0.2
0.0083
81.5 4
0.333
0.008 81 3

39. Analysis – Analyze Alternatives Range Transformation
Tips on analyzing the alternatives:
Eliminate any alternative that does not conform to major policies/requirements
Transform calculations into another scale if there is no clear cut winner 
Transformed Decision Matrix – By Reciprocal
Alternative
Reliability Investment Cost (Transformed)
Investment Break Even Point (Transformed)
Total Maintenance Cost over 20 Years (Transformed)
Operational Availability (%)
Obsolescence Risk 1
0.125
0.091
0.01 84 2
0.25
0.2
0.0083
81.5 4
0.333
0.008 81 3
Range
0.208
0.159
0.002
No clear cut winner.
Now what do I do? First, estimate the range of each column (highest minus lowest value). Second, calculate the range transformation (Cell value – lowest value in column divided by column range).
Transformed Decision Matrix – By Range
Alternative
Reliability Investment Cost
Investment Break Even Point
Total Maintenance Cost over 20 Years
Operational Availability
Obsolescence Risk 1
0.000
0.5 2
0.6
0.686
0.167 4
1.000

40. Analysis – Select Best Alternative
Tips on analyzing the alternatives:
If the Alternative Winner is not clear yet, consider weighting the criteria
If the Winner is clear, Select Recommended Alternative Now
Now what? Sum each alternative’s row and determine if there is clear separation.
Decision Matrix
Alternative
Reliability Investment Cost ($M)
Investment Break Even Point (Years)
Total Maintenance Cost over 20 Years ($M)
Operational Availability (%)
Obsolescence Risk
Sum 1
0.000
0.5
2.5 2
0.6
0.686
0.167
1.62 4
1.000 3
After transforming the raw calculations by each criterion’s range, Alternative 4 is the clear winner.

41. Trade-off Analysis Report Findings
Our report findings fall into three broad categories:
3.1 Update Trade-off Report – Document best alternative recommendation
3.2 Brief IPT(s) – Seek decision based on the trade-off report
3.3 Make Appropriate Updates – Update the program documents (e.g., BCA, LCSP) and the Logistics Product Database
3.1
3.2
3.3
Update Trade-off Report
Inform IPT(s)
Make Appropriate Updates

42.  Report Findings LCSP BCA 1 2 Update Trade-off Report
Report to & Seek Approval from IPT(s)
Trade-off Report 3
IPT Promotes Approved Findings 
Update
Update
Update
Logistics Product Database
BCA
LCSP

43. Trade-off Analysis Report Structure

44. Strike Talon Trade-off Summary

45. Strike Talon Trades and the ASOE Model1 2 3 4 2 5 4
Technical Performance vs. Cost
Technical Performance vs. Supportability
Supportability vs. Cost
Supportability vs. Process Efficiency
Mission Effectiveness vs. Cost 1 2 3 4 5 5 1 3

46. Topic 5: Exercise & Simulation

47. Scenario Exercise & Simulation
During this exercise and simulation, you will modify the existing Radio # 1 LORA from Lesson 10 to calculate Ao and Total Maintenance Policy Cost (i.e., Life Cycle Support Cost) for Radio #2.
You will build a decision matrix with four alternatives:
1 & 2 for Radio #1
3 & 4 for Radio #2
You will bring the criteria into similar direction and range so there is a clear best performing alternative.

48. Exercise & Simulation Roadmap
LORA on Radio #1
Product Support Management IPT
Set Up
Import, Edit, Analyze
Report Findings
Inputs
Process
Outputs
Exercise
Simulation
Update Radio #1 input template for Radio #2.
Edit Radio #2’s maintenance policy.
Import template for Radio #2 LORA.
Run Evaluator report on Radio #2.
Compare outputs for both radios.
Identify and collect inputs.
Select the best alternative.

49. Which radio and support strategy represent the best alternative?
Exercise: Set up the trade-off analysis:
Brainstorm key questions for deriving input sources.
Identify key inputs for updating the Radio #1 LORA model, which will be used to perform a subsequent LORA on Radio #2 as part of the simulation.
Simulation: Compare and contrast four alternatives for Radio #1 and Radio #2 to recommend the best alternative.
Report Findings: Answer Blackboard question.

50. Group discussion/Individual
Brainstorm key questions for deriving inputs and then identify the key inputs for updating the Radio #1 LORA.
20 minutes
Group discussion/Individual
Part 1: In your groups, brainstorm key questions for deriving inputs.
Part 2: When prompted by the instructor, independently access Blackboard and select the Exercise link in the Lesson 11: A Trade-off Analysis folder to identify inputs.

51. Roadmap: Exercise Set Up
LORA on Radio #1
Product Support Management IPT
Set Up
Import, Edit, Analyze
Report Findings
Inputs
Process
Outputs
Exercise
Simulation
Update Radio #1 input template for Radio #2.
Edit Radio #2’s maintenance policy.
Import template for Radio #2 LORA.
Run Evaluator report on Radio #2.
Compare outputs for both radios.
Identify and collect inputs.
Select the best alternative.

52. Set Up
Brainstorm key questions for deriving inputs.
Part 1 of Exercise
10 minutes
Directions
Group discussion
Review the list of known Supportability attributes for both radios, which will assist with your brainstorming discussions.

53. Part 2 of Exercise Set Up 10 minutes Individual
Identify the key inputs for updating the Radio #1 LORA model, which will be used to perform a subsequent LORA on Radio #2 as part of the simulation.
Part 2 of Exercise
10 minutes
Directions
Individual
Access Blackboard and select the Exercise link in the Lesson 11: A Trade-off Analysis folder to identify inputs.

54. Roadmap: Simulation – Analyze & Report Findings
Select the best alternative.
LORA on Radio #1
Product Support Management IPT
Set Up
Import, Edit, Analyze
Report Findings
Inputs
Process
Outputs
Exercise
Simulation
Update Radio #1 input template for Radio #2.
Edit Radio #2’s maintenance policy.
Import template for Radio #2 LORA.
Run Evaluator report on Radio #2.
Compare outputs for both radios.
Identify and collect inputs.

55. Update Radio #1 LORA to calculate Radio #2 Ao and Total Maintenance Cost (i.e., Life Cycle Support Cost) over a 20 year life cycle.
Compare and contrast the contractor and organic LORA outputs for Radio #1 and Radio #2 using a decision matrix that compares relevant Life Cycle Support criteria.
30 minutes
Not graded
In Blackboard, select the Simulation Test Questions link in the Lesson 11: A Trade-off Analysis folder.

56. Post-simulation Discussion
Debrief
Post-simulation Discussion
While Radio #2’s production cost and Reliability improvement may suggest it would be preferred, the more complete analysis reveals otherwise. Having technical data ownership provides more flexible support solutions for Radio #1 through cost sharing among existing organic Depot repair lines.

57. Topic 6: Summary

58. Takeaways
A trade-off analysis is about achieving balance among competing priorities to get the best outcome possible. During a trade-off analysis, LCLs are trying to balance requirements and the lowest affordable Life Cycle Costs.
A trade-off analysis best practice is to repurpose existing models, templates, and data (as appropriate) to build in efficiencies and streamline the analysis process
Trade-offs are refined and occur throughout the Life Cycle Management Framework
After a program is fully funded at Milestone C, trade-offs occur at a minimum of every five years for the life of the program unless:
User requirements change significantly
The product support strategy undergoes a change
Technology advances dictate a system change

59. TLO: Conduct Reliability & Maintainability (R&M), Availability, Cost/Affordability Trade-off Analysis
Topic
Objectives
Topic 1: Introduction
Welcome
Where are you? What influence do you have?
Topic 2: Overview of Trade-off Analysis
Relate Reliability & Maintainability (R&M), Availability, Cost/Affordability Trade-off Analysis to Supportability and Supportability Analysis
Topic 3: Affordability and Should-Cost
Relate Affordability and Should-Cost to Trade-off Analyses within the context of Better Buying Power
Topic 4: Performing Trade-off Analyses
Apply Reliability & Maintainability (R&M), Availability, Cost/Affordability Trade-off Analysis
Topic 5: Exercise & Simulation
Identify key inputs for updating the Radio #1 LORA
Determine which radio is the best alternative for the Strike Talon
Topic 6: Summary
Coordinates
Consistent White space