Observations on the Theoretical Basis of Cost-Effectiveness

This paper presents some observations on the theoretical foundation of cost-effectiveness analysis. It describes the results of continuing research to develop a comprehensive and rigorous description of the important elements of cost-effectiveness as used by the aerospace industry for military and commercial systems planning. The primary objective is to utilize basic mathematical and statistical theory to construct the rules, properties, and hypotheses that are needed to satisfy the contractual requirements imposed by various government customers.