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RE: Mission Creep - Was Re: The new US Army APC the Stinger

From: "B Lin" <lin@r...>
Date: Mon, 1 Jul 2002 15:47:26 -0600
Subject: RE: Mission Creep - Was Re: The new US Army APC the Stinger

The campaign point I was trying to illustrate was that procurement might
not be as simple as "we need 2 cruisers and maybe 4 next year and
sometime in the future 4 more, let's just send the order in for 2 now". 
In real life, you'd need some time to arrange such builds.  It's
unlikely that you'd have enough slips to suddenly start 10 hulls in one
year and then build none the next.  It's more likely that you have 3
slips available and you start one new hull per year over the span of
several years to keep the yards in continuous operation rather than
hiring and laying off workers every other year.  It is in the shipyards
interest to know that they have projects that would last a decade,
rather than one year.  It would allow them to spend capital on
effeciency improvements knowing that such efficienies could be applied
for more than one or even dozens of ships, thus increasing their profit.
 It's a different matter if they are only building one of the type.

For instance if an older space shipyard still uses human welders and it
receives a contract for 1 destroyer, it is unlikely to buy expensive new
robotic welders that work twice as fast but cost a little more than
twice as much to buy (but maintenance costs are less than the human
welders).  If, however, it receives a contract for 25 over 5 years, it
becomes much more economically viable to invest in a more expensive
system if the new robotic welders cost less in the long run, since the
company knows it has a "long run" of at least 5 years.

This is where the politics come in, the politician, having an interest
in the shipyard will try to pad the numbers for either more ships or
longer commitments to benefit the shipyard.  Single or limited run
production would be limited to experimental prototypes or specially
modified units that cost much more than the standard item.

--Binhan

<SNIP> from Ryan:
 
> >In the first case, would there be minimum procurement amounts?  For 
> >instance if you commission a new class of cruiser, would you have to 
> >commit to 20 hulls built in a 10 year period?  Or would you have to 
> >buy tanks in 1000 unit lots?
> 
> Ships are much larger components and don't get quite the same thing 
> out of economies of scale that tanks and aircraft do.


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