Cost-Based Value Models of Air Force Experience

Abstract : This research and development effort produced three models for potential use by Air Staff manpower and personnel planners in evaluating the cost and benefits of alternative enlisted and officer experience mixes. The models specify the costs of replacing key, trained personnel and valuing the future worth of services expected to be obtained from retaining such individuals in the Air Force. The first model, full investment cost, is cost-based model reflecting expenditures necessary to replace personnel using historically determined career progression patterns and cost data. The other two models, stochastic rewards valuation and expected net present value, are value models reflecting the future worth of individuals to the Air Force. The methodology used in developing each of the models is presented, along with their application to the jet engine mechanic and air traffic controller occupational specialties. Results show the models to be useful in analyzing compensation and force management policy issues. Keywords: Human capital; Human resources accounting; Labor economic models; Personnel force structure.