1. Army Cost Benefit Analysis: A Case Study
Battle Assembly Travel Reimbursement
Developed based on information provided by
Mr. Mario F. Wozniak
Chief, Reserve Personnel Army (RPA), Budget Division
US Army Reserve Command G8
Show Slide #1: Army Cost Benefit Analysis: A Case Study
Title: Army Cost Benefit Analysis: A Case Study
References: Handouts, Excel Spreadsheets
Facilitator’s Material and Student Material: Dry erase markers, white boards, access to Excel spreadsheets, case-studies
Facilitator’s Material: Each primary Facilitator’s should possess a lesson plan, slide deck, course handouts, practical exercises, access to Excel spreadsheets, case-studies All required references and technical manuals will be provided by the local Command.
Student Material: Students should possess course handouts, practical exercises, access to Excel spreadsheets, case-studies and standard classroom supplies.
Facilitator’s Note: Throughout the lesson discussion seek opportunities to link the competencies with the lesson content through the student’s experiences.
Important to provide credit to POC’s to encourage future participation in “Winning the Cost War” initiatives, facilitate visibility and possible promotions for the POCs within the Army structure.
Acknowledge that although the issue is real and the data has been provided by the ARC, much of the supporting data and information is subjective and has not been substantiated via an actual survey or data collection exercise.

2. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Show Slide #2: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement
Facilitator’s Note: Case Study: Understanding and performing CBA is crucial to the Army’s success. Here is a real-world case study scenario for us to practice and discuss the CBA process.
A Case Study

3. Terminal Learning Objective
Action: Perform Army Cost Benefit Analysis
Condition: You are training to become an ACE with access to ICAM course handouts, readings, spreadsheet tools, and awareness of the Operational Environment (OE) variables and actors
Standard:
Review the Army 8 Step Cost Benefit Analysis process
Apply Cost Benefit Analysis to the Battle Assembly case
Show Slide #3: Terminal Learning Objective
Action: Perform Army Cost Benefit Analysis
Condition: You are training to become an ACE with access to ICAM course handouts, readings, spreadsheet tools, and awareness of the Operational Environment (OE) variables and actors
Standard:
Review the Army 8 Step Cost Benefit Analysis process
Apply Cost Benefit Analysis to the Battle Assembly case
Facilitator’s Note: Point out to the class that this is the second of three case studies we will be looking at all focused on gaining practical experience in the process with increasing level of complexity.
Since you have just completed a CBA class, you have decided to use CBA principals to determine the ‘best’ travel reimbursement policy

4. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Army Reserve Command
Overview
Show Slide #4: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement
Facilitator’s Note: Activity Step 1 Introduce case background. Begin overview of the ARC

5. Army Reserve Command Leadership
A 3- star General leads the US Army Reserve Command and holds the following two titles:
Chief, Army Reserve (CAR): Reports to Chief of Staff of Army; represents Army Reserve in policy and planning discussions with Army, Department of Defense and Congress
Commanding General (CG) of the US Army Reserve Command (USARC): Reports to Army Forces Command; responsible for staffing, training and readiness of most Army Reserve units in continental US and Puerto Rico
Show Slide #5: Army Reserve Command Leadership
Facilitator’s Note: Activity Step 1 Introduce case background
ARC is led by a 3-star General who holds two titles;
Chief, Army Reserve and Commanding General of the US Army Reserve Command

6. Army Reserve Command Mission
Provide trained, equipped, and ready Soldiers and cohesive units to meet the global requirements across the full spectrum of operations. The Army Reserve is a key element in The Army multi-component unit force, training with Active and National Guard units to ensure all three components work as a fully integrated team.
Responsibilities
Operational tasks; training, equipping, managing, supporting, mobilizing, retaining Soldiers
Troop Program Unit (TPU) Soldiers; Commands, controls, supports Army Reserve troop units CONUS.
Exception: Psychological Operations and Civil Affairs units
Ensures readiness of forces; prepares over 1,700 units to mobilize and deploy to wartime theater
Show Slide #6: Army Reserve Command Mission
Facilitator’s Note: Activity Step 1 Introduce case background
Per direction from the AR HQ, the ARC retains the responsibility for the implementation of field and troop level mission responsibilities.
ARC Mission:
The US Army Reserve Command, a major subordinate command of U.S. Army Forces Command, commands, controls, and supports all Army Reserve troop units in the continental United States with the exception of Psychological Operations and Civil Affairs units.
The USARC also ensures the readiness of its forces and prepares the nearly 1,700 units under its command to mobilize and deploy to a wartime theater of operation.
Troop Program Unit (TPU) Soldiers work part-time and receive pay only when they perform duty. Pay is by exception: when a TPU Soldier performs duty, he/she submits paperwork and the system manually inputs the pay.
The Unit Administrator (UA) usually handles a TPU Soldier's pay.
The UA submits drills, duty orders, travel and other administrative change documents to the pay account of the Soldier's servicing Reserve Component Pay Support Office (RCPSO).

7. Show Slide #7: Where we are Located
Facilitator’s Note: Activity Step 1 Introduce case background
ARC trains part time military personnel.
Keeps the army mobile, efficient and complete by providing specialized technological and troop support when and where it's needed most.
This map shows the ARC landscape. Map implies the cost of travel reimbursement is considerable.

8. Army Soldier Profile (FY16) 1,015,000 Soldiers
Show Slide #8: Army Soldier Profile (FY16) 1,015,000 Soldiers
Facilitator’s Note: Activity Step 1 Introduce case background
Note that the AR constitutes 20% of the Army Soldiers and represents a total of 198,000 troops.
This number will play a significant part in the CBA discussion to follow.

9. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Travel reimbursement is an existing issue within the ARC.
“Soldier reimbursement of travel expenses to a Battle Assembly (BA)”
BA consist of monthly drills; Soldiers practice military skills to maintain individual and unit readiness in case of mobilization and deployment
Show Slide #9: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
Travel reimbursement is an existing issue within the ARC
NOTE: Case information and data are manufactured for purposes of training, and may not reflect actual costs.
BA travel requirements are monthly to satisfy training and readiness goals

10. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Request initiated by US Army Reserve Command to: Extend National Defense Authorization Act (NDAA) to:
Authorize travel reimbursement for “specified group” of Soldiers traveling to Battle Assembly outside normal commuting distance (>150 miles) especially;
Soldiers with critical Military Occupation Specialties
Soldiers affected by Base Realignment and Closure (BRAC)
Units with designated leader shortages
Show Slide #10: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
Request initiated by US ARC – This case is based on an existing issue within the ARC
Case looked at authorizing travel reimbursement for “specified group” of Soldiers traveling greater than 150 miles to Battle Assembly
Specified groups include
Soldiers with Military Occupation Specialties
Soldiers effected by BRAC
(Base Realignment and Closure)s a process of the United States federal government directed at the administration and operation of the Armed Forces, used by the United States Department of Defense (DoD) and Congress to close excess military installations and realign the total asset inventory to reduce expenditures on operations and maintenance, aimed at achieving increased efficiency in line with Congressional and DoD objectives. More than 350 installations have been closed in four BRAC rounds: 1989, 1991, 1993, and The most recent round of BRAC completed in the fall of 2005 and with the commission's recommendations became law in November 2005.
Soldiers traveling to units with designated leader shortages

11. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Army Reserve Command (ARC) request to reimburse
travel related expenses is based on:
Impact on morale, and personal finance issues for AR Soldiers
Increased recruiting and training costs associated with AR Soldiers lost through attrition
Adverse impact to Operational Readiness by loss of Soldiers in critically needed categories through attrition
ARC’s Continuous Improvement effort modeling (ARFORGEN) and minimize “cross leveling”
Show Slide #11: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
Army reserve Soldiers are impacted by the economy. Soldiers morale and finances are adversely impacted by travel to BA.
Losing ARC Soldiers through attrition increases Army cost of recruiting and training replacements
There is an adverse impact to Operational Readiness when critically skilled Soldiers are lost.
The ARFORGEN process is used to manage the force and ensure the ability to support demands for Army forces. 
ARFORGEN sequences activities for all active and reserve Army units to include:
Reset, Modular conversion, Modernization, Manning adjustments, Soldier and leader training and education programs, Unit training, Employment; and, Stationing decisions.
Cross leveling refers to transferring specially skilled Soldiers from one unit to another in order to fill vacancies in units prior to deployment. These vacancies may be caused by attrition or other reasons. Reducing attrition will serve to minimize cross leveling.
Show this video or one similar:
Some mobilizations have led to under-strength units having to use different methods to fill their vacancies.
The most common method to fill the vacancies has been by “CROSS LEVELING“. This is the taking of Soldiers with
the correct rank and military occupational specialty (MOS) from a unit not scheduled for mobilization and assigning
them to fill the roster vacancies of the mobilizing unit.

12. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Travel reimbursement to ARC Soldiers’ required to travel more than 150 miles to BA is being considered for several reasons:
Maintaining competitive edge by providing more benefits and promotion opportunities for skilled AR Soldiers
AR promotions require some reservists move to new units beyond normal commuting distance
Maintaining camaraderie with fellow Soldiers is highly valued in ARC
BRAC is increasing Soldier travel distance for BA and this is expected to impact more reservists with additional base closures
Show Slide #12: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
Maintain competitive edge by providing more benefits and promotion opportunities for skilled AR Soldiers
Poor economic conditions makes shouldering travel expenses to BA a financial hardship for many AR Soldiers
AR promotions require some reservists to move to new units beyond normal commuting distances
Maintaining friends with fellow Soldiers is considered a substantial desire of AR Soldiers.

13. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Assumptions:
Operational Readiness is a high command objective
ARC desires to support continuous improvement modeling (ARFORGEN’s enhancement is very important)
Economic conditions, promotions, Base Realignment and Closure (BRAC), and desire for Soldiers to stay in unit, result in increased number of Soldiers traveling >150 miles to BA
Show Slide #13: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
The travel reimbursement information and data is manufactured for purposes of our lesson.
The first three assumptions are based on actual concerns within the ARC.

14. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Assumptions (continued):
Annual “out-of-pocket” Soldier expense is estimated between $500-$4,000 for travel to BA. Case will average travel expenses to Battle Assembly (BA) = $1,500
Recruiting and training cost is estimated at $75,000 per Soldier
Operational Readiness is impacted when critically needed Soldiers leave service
Inflation rate 2% per year
Estimate travel reimbursement costs for 1 year and 10 years
Show Slide #14: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
The travel reimbursement information and data is manufactured for purposes of our lesson.
Estimated “out-of-pocket” expense per Soldier is between $500 and $4,000
Create an average travel expense paid for ease of calculations in this training exercise
Create an average recruiting and training cost for ease of calculations in this exercise
Costs to recruit and train skilled Soldiers vary as a function of the specialty.
i.e. A pilot or specialized engineer requires extensive training.
Recruiting and training cost information would ideally be categorized by specialty with
consideration given to enlistment bonuses and other cost implications. The average training cost, as reported by AR and AMCOS, is $75,000 per Soldier.
Operational readiness is adversely impacted when critically skilled Soldiers leave AR service
Inflation rate 2% - is manufactured for purposes of class room instruction
Consider costs for 1 year and 10 years – to provide class visibility to the future costs of

15. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Assumptions (continued):
Army reserve staff level = 200,000 Soldiers
5,000 AR Soldiers are affected by BRAC; 2,500 or half of these Soldiers are considered critical or skilled positions
50,000 AR Soldiers travel > 150 miles to BA; 24,000 are considered critical or skilled positions
Predict current AR Soldier attrition rate decrease 0.5% if critically needed and BRAC Soldiers are reimbursed for travel
Not all AR Soldiers will be reimbursed for travel expenses
Show Slide #15: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
The travel reimbursement information and data, although provided by ARC is manufactured for purposes of our lesson.
Army staff level data based on actual data, but may not be accurate
Estimate 2.4% or 5,000 AR Soldiers are affected by BRAC. 2,500 or half of the Soldiers are considered critical skill positions
Approximately 50,000 reserve Soldiers travel >150 miles to BA. The 5000 Soldiers affected by BRAC are not necessarily a subset of these, but there is likely overlap. Those affected by BRAC are more likely to be Traveling >150 miles to BA. Estimate 11.7% or 24,000 critically needed Soldiers travel to BA >150 miles and are not reimbursed for expenses
Estimated attrition rate reduction based on actual data, but may not be accurate.

16. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
The commander identified some non-quantifiable factors that could be considered in a CBA:
Image to general public
Soldier value perception
Soldier home financial stability
Soldiers’ morale is important
Increased Operational Readiness
ARFORGEN enhancement
Show Slide #16: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 1 Introduce case background
Case information and data comes from ARC, but is not considered accurate.
The commander wants to consider quantifiable and non-quantifiable factors when performing the cost benefit analysis

17. Cost Benefit Analysis (CBA)
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Cost Benefit Analysis (CBA)
Review
Show Slide #17: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process

18. What is Cost Benefit Analysis?
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
What is Cost Benefit Analysis?
A of comparing both and costs and benefits (positive/negative), against specified Courses of Action (COA) to determine the best
Show Slide #18: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process
What is Cost Benefit Analysis, or CBA?
A structured methodology of comparing both quantifiable and non-quantifiable costs and benefits (positive/negative), against specified Courses of Action (COA) to determine the best enterprise solution.

19. What is Cost Benefit Analysis?
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
What is Cost Benefit Analysis?
A structured methodology of comparing both quantifiable and non-quantifiable costs and benefits (positive/negative), against specified Courses of Action (COA) to determine the best enterprise solution.
Show Slide #19: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process
What is Cost Benefit Analysis, or CBA?
A structured methodology of comparing both quantifiable and non-quantifiable costs and benefits (positive/negative), against specified Courses of Action (COA) to determine the best enterprise solution.

20. Why do we need a Cost Benefit Analysis?
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Why do we need a Cost Benefit Analysis? 1.
2. When making resourcing decisions:
Treat cost (both near and long term) as an upfront consideration, not as an afterthought
Obtain visibility of project value and positive and negative consequences to a decision path
Show Slide #20: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process

21. Why do we need a Cost Benefit Analysis?
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Why do we need a Cost Benefit Analysis?
1. To make a better use of limited funds
2. When making resourcing decisions:
Treat cost (both near and long term) as an upfront consideration, not as an afterthought
Obtain visibility of project value and positive and negative consequences to a decision path
Show Slide #21: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process

22. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Overview
Army CBA 8 Step Process
Define and scope the problem/opportunity
Formulate assumptions and constraints
Define alternatives
Develop cost estimate for alternatives
Identify quantifiable and non-quantifiable benefits
Define alternative selection criteria
Compare alternatives
Report results and recommendations
Show Slide #22: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process
Army CBA 8 Step Process Review
Define and scope the problem/opportunity
Formulate assumptions and constraints
Define alternatives
Develop cost estimate for alternatives
Identify quantifiable and non-quantifiable benefits
Define alternative selection criteria
Compare alternatives
Report results and recommendations

23. BENEFITS MUST BALANCE OR OUTWEIGH COST
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
COST
Quantifiable cost
Direct
Indirect
Initial/Start-up
Sustainment
Procurement
Non-quantifiable
Life/Safety/Health
Perception/Image
Opportunity
Risk/Uncertainty
Political
Define and scope the problem/opportunity
Formulate assumptions and constraints
Define alternatives
Develop cost estimate for alternatives
Identify quantifiable and non-quantifiable benefits
Define alternative selection criteria
Compare alternatives
Report results and recommendations
BENEFITS
The sum of quantifiable and non-quantifiable benefits:
Quantifiable benefits
Cost avoidances
Non-quantifiable benefits
Greater capacity
Faster availability
Better quality
Improved moral
Other
Show Slide #23: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 2 Review the Army 8 Step Cost Benefit Analysis process
Summary of Army CBA – for reference BB
BENEFITS MUST BALANCE OR OUTWEIGH COST

24. Battle Assembly Travel Reimbursement Case Study
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
Battle Assembly Travel Reimbursement Case Study
Team Exercise
Show Slide #24: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case

25. Case Study Instructions
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
Case Study Instructions
Break up the class into 4 teams
Each team is tasked to respond to all 8 steps of the CBA process.
Time will be provided for the teams to discuss each process step. After team discussion, each team will present their findings.
Show Slide #25: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Case Study Instructions

26. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Discussion
1. Define and Scope the Problem / Opportunity Questions for the Reviewer
Does the problem statement define a clear, unambiguous issue? As appropriate, does the objective reflect an enterprise perspective?
What major stakeholders are likely to be impacted?
Show Slide #26: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 1 Define and Scope the problem / opportunity
Students need to remember the Questions for the Reviewer when completing each process step.
Instructor is CBARB leader
Allow 5 minutes for teams to get acquainted and assign presenter
Allow 5 minutes for teams to answer step 1
Allow each team 2 minutes to present findings
Have the group agree on a “best” problem statement that may be one of the four or a combination.
- Does the definition satisfy the Questions for the reviewer?

27. 2. Formulate Assumptions and Constraints Questions for the Reviewer:
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study Discussion
2. Formulate Assumptions and Constraints Questions for the Reviewer:
Are the assumptions realistic? Were they provided by an appropriate subject matter expert? Are the assumptions or facts structured in a way that favors one alternative COA?
Do the assumptions, and facts clearly identify the natural and/or artificial limits or expansions placed on the solution set?
Show Slide #27: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 2 Formulate Assumptions and Constraints
Travel reimbursement information and data is manufactured for purposes of our lesson.
Use the case study overview information to complete this step
Instructor is CBARB leader
Allow 10 minutes for teams to answer step 2
Allow each team 2-3 minutes to present findings
Discuss and agree upon a reasonable set of assumptions and constraints.
- Does the definition satisfy the Questions for the reviewer?

28. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
Define Alternative Courses of Action
Questions for the Reviewer:
Have all feasible alternatives been considered, to include alternatives that represent creative thinking?
Have the alternatives been defined or described clearly, and to a sufficient level of detail to support the development of a cost estimate?
Is the status quo included, or is its absence explained?
Do the alternatives span a reasonably wide range of potential solutions?
Show Slide #28: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 3 Define alternative courses of action
Instructor is CBARB leader
Allow 10 minutes for teams to answer step 3
Allow each team 5 minutes to present findings
Discuss and agree upon courses of action.
- Does the definition satisfy the Questions for the reviewer?

29. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
4. Develop Cost Estimate for each Alternative
Questions for the Reviewer:
Does the cost estimate span the appropriate life cycle?
As appropriate, does the documentation clearly differentiate between a cost-perspective estimate and a POM/budget-perspective estimate?
Are the cost estimates for each COA structured in a way that supports apples-to-apples comparison?
Is the cost estimate backed up by supporting documentation:
Data sources identified?
Rationale and methodology explained?
Analysts/POCs identified?
Show Slide #29: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 4 Develop Cost Estimate for each Alternative
Instructor is CBARB leader
Allow teams minutes to complete step 4
Allow each team 5 minutes to present findings
If necessary consult instructor support materials to reconcile cost findings.
- Does the cost estimate satisfy the questions for the reviewer

30. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
Identify Quantifiable and Non-Quantifiable Costs and benefits
Questions for the Reviewer:
Do the perceived benefits reflect an enterprise perspective?
Are the benefits consistent with the problem statement?
Show Slide #30: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 5 Identify Quantifiable and Non-Quantifiable Costs and Benefits
Instructor is CBARB leader
Allow teams minutes to complete step 5
Allow each team 5 minutes to present findings
Discuss and agree upon benefits.
- Does the cost estimate satisfy the questions for the reviewer

31. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
Define Alternative Selection Criteria
Questions for the Reviewer:
Are the selection criteria appropriately tailored to the problem statement or requirement?
Has appropriate consideration been given to both cost and non-cost criteria?
If weighting of selection criteria has been used, has the leader agreed with the weighting?
Do the selection criteria appear unrealistically skewed to favor one alternative?
Show Slide #31: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 6 Define Alternative Selection Criteria
Instructor is CBARB leader
Allow teams 5 minutes to complete step 5
Allow each team 2-3 minutes to present findings
Discuss and agree upon a set of criteria for the entire class to use.
- Does the cost estimate satisfy the questions for the reviewer

32. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
A “Cost-Benefit Balance” Visual
Alternative #1: No Travel Reimbursement
No incremental benefits or costs
Cost
Benefit
Show Slide #32: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
After each team presents
Instructor review the Cost – Benefit Balance
Alternative 1 – No Travel Reimbursement
Costs = Benefits, but do not solve the problem
Also, there may be some non-quantifiable costs (high attrition, low morale.) $0 $0 BB
BENEFITS MUST BALANCE OR OUTWEIGH COST 32

33. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
A “Cost-Benefit Balance” Visual
Cost
Benefit
Alternative #2: All Reservists
Are Unquantifiable Benefits in morale and readiness worth $56M?
Readiness
$75M
Morale
Show Slide #33: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Alternative B – Reimburse all Soldiers traveling >150 miles
This solves the problem, but how do we determine if Readiness and Morale/Good will is worth the difference in cost?
$19M is the training savings. Calculation:
50000 Soldiers who must travel * .005 reduced attrition rate = 250 Soldiers who will be retained
250 Soldiers * $75,000/Soldier = $18,750,000 or roughly $19million
$19M BB
BENEFITS MUST BALANCE OR OUTWEIGH COST 33

34. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
A “Cost-Benefit Balance” Visual
Alternative #3: Critical & BRAC only
Are Unquantifiable Benefits in morale and readiness worth $27M?
Cost
Benefit
$44M
Readiness
$36M
Morale
Show Slide #34: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Alternative C – Reimburse critically skilled and BRAC Soldiers
This solves the problem, but how do we determine if Readiness and Morale/Good will is worth the difference in cost?
24000 critical and BRAC Soldiers who travel * .005 reduced attrition = 145 Soldiers retained
145 Soldiers * $75,000/Soldier = $10,875,000 or approximately $11million
$11M BB
BENEFITS MUST BALANCE OR OUTWEIGH COST 34

35. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
A “Cost-Benefit Balance” Visual
Alternative #4: BRAC only
Are Unquantifiable Benefits in morale and readiness worth $14M?
Cost
Benefit
Readiness
Show Slide #35: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Alternative D – Reimburse only Soldiers impacted by BRAC
This solves the problem, but how do we determine if Readiness and Morale/Good will is worth the difference in cost?
5000 BRAC Soldiers travel >150 miles * .005 reduced attrition rate = 25 Soldiers retained
25 Soldiers * $75,000/Soldier = $1,875,000 or approximately $2 million
$8M
Morale
$2M BB
BENEFITS MUST BALANCE OR OUTWEIGH COST 35

36. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Making a decision requires answering the questions on the previous slides
How can you evaluate and compare the non-quantifiable costs and benefits?
Show Slide #36: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Making a supportable, enterprise decision is a difficult task.
The decision matrix provides a tool for comparing the non-quantifiable with the quantifiable.
It achieves this by weighting each of the decision criteria, and then measuring the results against each other.
Decision matrix provides a methodical way to compare alternatives.
Please continue on to step 7.
The Decision Matrix is one method of comparing alternatives

37. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
7. Compare Alternatives
Questions for the Reviewer:
Does the analysis clearly demonstrate how the recommended COA best satisfies the selection criteria?
Is the recommended billpayer consistent with Army priorities? Do the benefits of the recommended COA justify the billpayer?
Are second- and third-order effects identified, and are the negative impacts acceptable?
Show Slide #37: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 7 Compare Alternatives
Instructor is CBARB leader
Use the decision matrix
Allow teams 10 minutes to complete step 7
Allow each team 5 minutes to present findings
- Does the cost estimate satisfy the questions for the reviewer

38. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
8. Report Results and Recommendations
Questions for the Reviewer:
Does the package contain all key elements, accompanied by supporting documentation?
Does the recommended COA address the problem, and is it consistent with the assumptions and constraints?
Does the analysis explain how the recommended COA is best at satisfying the selection criteria?
Show Slide #38: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Activity Step 3 Apply Cost Benefit Analysis to the Battle Assembly case
Step 8 Report Results and Recommendations
Instructor is CBARB leader
Allow teams 5 minutes to complete step 8
Use the Executive Summary template
Allow each team 5 minutes to present findings
Does the cost estimate satisfy the questions for the reviewer
Note how different teams results are the same / different
Why use subject matter experts
How do you support decisions
CBA package should have executive summary, then include all steps of cba process with supporting documentation

39. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Step 8: Report Results and Recommendations
Executive Summary
Problem:
Brief description of methodology and number of COAs considered to determine the best choice.
Existing or new funding?
Recommendation:
Cost to Implement: $
Other:
Show Slide #39: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Instructor notes/Solutions
Step 8 - Report Results and Recommendations for the case.
Recommendation is based on the selection criteria, ranking, and application of the supporting decision matrix by the author. Different selection criteria and ranking may result in a different recommendation. It should be recognized that the CBA is a structured thought process and should be considered a “tool” to support a “cost informed” decision.
Make sure the Report results and recommendations include an Executive Summary
Include Pictures / Photos (varied media) in the report
Decision package must present a strong value proposition. It must clearly show that the benefits of the recommended COA more than justify the costs and risks.
Answer the Questions for the Reviewer
Does the package contain all key elements, accompanied by supporting documentation?
Does the recommended COA address the problem, and is it consistent with the assumptions and constraints?
Does the analysis explain how the recommended COA is best at satisfying the selection criteria?

40. Battle Assembly Training Case Study Instructor’s Support Material
Show Slide #40: Battle Assembly Training Case Study
Facilitator’s Note: Instructor’s Support Material

41. Battle Assembly Training - Instructor’s Support Material
Length Time: 4h
Briefing min, break out in teams to prepare each of the points average 10 min per point area, presentation and discussion average 15 min per point, wrap up min.
Process
Introduce the case
Break the class into groups of 4
Each group needs to prepare material for presentation results
Use the excel templates as applicable
Presentation
Discuss findings with participants and agree on main points to ensure that they are on the right truck
Introduce support for each point after students’ presentation
Show Slide #41: Battle Assembly Training - Instructor’s Support Material
Facilitator’s Note: Length Time: 4h
Briefing min, break out in teams to prepare each of the points average 10 min per point area, presentation and discussion average 15 min per point, wrap up min.
Process
Introduce the case
Break the class into groups of 4
Each group needs to prepare material for presentation results
Use the excel templates as applicable
Presentation
Discuss findings with participants and agree on main points to ensure that they are on the right truck
Introduce support for each point after students’ presentation

42. Battle Assembly Training - Instructor’s Support Material
Objectives:
Apply the CBA and by using it:
bring out the issues at hand
think though possible alternatives and support
Point to the:
Ranking process, and
Weight sensitivity since these are the key areas influencing the decision
Realize the need for support for a cost informed decision
Show Slide #42: Battle Assembly Training - Instructor’s Support Material
Facilitator’s Note: Objectives:
Apply the CBA and by using it:
bring out the issues at hand
think though possible alternatives and support
Point to the:
Ranking process, and
Weight sensitivity since these are the key areas influencing the decision
Realize the need for support for a cost informed decision

43. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
Define and Scope the Problem / Opportunity
ARC Soldiers are adversely impacted by having to pay
travel costs to attend Battle Assembly.
Compare costs and benefits of extending travel
reimbursement to ARC Soldiers traveling to BA.
Show Slide #43: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Travel reimbursement information and data is manufactured for purposes of our lesson.
This is one example.

44. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
2. Formulate Assumptions and Constraints
Current law does not allow for reimbursement of Soldier travel to Battle Assembly
Limit travel reimbursement to Soldiers traveling greater than 150 miles to BA
Estimate 50,000 Soldiers Traveling to BAs are not reimbursed
24,000 of the 50,000 Soldiers have critical skills positions
Soldiers spend average $1,500 annually traveling to BAs
ARC Soldier attrition rate = 20%
Travel reimbursement can reduce ARC attrition by .5%
AR staff level = 200,000 Soldiers
Show Slide #44: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Travel reimbursement information and data is manufactured for purposes of our lesson.
This is one example.

45. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
2. Formulate Assumptions and Constraints
Economic conditions, Soldier promotions as well as BRAC increase travel distance to Battle Assembly
5,000 AR Soldiers effected by BRAC
2,500 Soldiers impacted by BRAC have critical skills
Annual training for new recruits averages $75,000
Operational Readiness is extremely important
Soldier morale very important
ARFORGEN enhancement is very important
Not all AR Soldiers can be reimbursed for travel to BA
Show Slide #45: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Travel reimbursement information and data is manufactured for purposes of our lesson.
This is one example.

46. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
2. Formulate Assumptions and Constraints
Calculate costs for 1 year and 10 years
Use 2% inflation rate
Show Slide #46: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Travel reimbursement information and data is manufactured for purposes of our lesson.
This is one example.

47. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
3. Define Alternative Courses of Action
No travel reimbursement to Battle Assembly (Status Quo).
Reimburse all Soldiers Traveling to Battle Assembly greater than 150 miles.
Reimburse only critically needed Soldiers and Soldiers impacted by BRAC Traveling to Battle Assembly greater than 150 miles.
Reimburse only Soldiers impacted by BRAC Traveling to Battle Assembly greater than 150 miles.
Show Slide #47: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Travel reimbursement information and data is manufactured for purposes of our lesson.

48. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Develop Cost Estimate for each Course of Action (COA)
Show Slide #48: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Travel reimbursement information and data is manufactured for purposes of our lesson.
The one year costs have already been explained on slides
The 10-year cost is assuming 2% inflation. Use cost estimate/inflation spreadsheet from the prior day's lesson.

49. 4. Develop Cost Estimates For Alternatives
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
4. Develop Cost Estimates For Alternatives
COST
Travel Reimbursement Cost
COA #1
No travel reimbursement
(Status Quo)
COA #2
Reimburse all Soldiers Traveling >150 miles
COA #3
Reimburse Critical Soldiers and BRAC Traveling >150 miles
COA #4
Reimburse only BRAC Soldiers Traveling >150 miles
QUANTIFIABLE
1 year
10 years $0
$75M
$821M
$43M
$476M
$8M
$82M
NON
Public Image
Operational Readiness
Morale
Show Slide #49: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: 4. Develop Cost Estimates For Alternatives

50. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Step 5. Identify Quantifiable and Non-quantifiable Benefits
The primary benefit is reduced attrition
Soldiers lost through attrition must be replaced, increasing training costs
COA #2
AR Soldiers = 200,000
200,000
Soldiers
Reimburse all
Training cost 75,000 per Soldier annually
75,000
dollars
Reduced Attrition rate = 0.5%
250
Annual training Savings
-18,750,000
training dollars
# AR Soldiers travel > 150mi = 50,000
50,000
Avg Travel Reimbursement Cost = $1,500
1,500
total annual travel reimburse cost
75,000,000
travel dollars
Inflation 2% per year
COA #3
Reimburse only
Critically skilled
145
And BRAC
-10,875,000
# AR Skilled Soldiers travel > 150mi = 24,000
24,000
# BRAC Soldiers travel > 150mi = 5000
5,000
43,500,000
COA #4
Reimburse
BRAC only 25
-1,875,000
7,500,000
Show Slide #50: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: Step 5. Identify Quantifiable and Non-quantifiable Benefits
The primary benefit is reduced attrition
Soldiers lost through attrition must be replaced, increasing training costs

51. 5. Identify Quantifiable and Non-quantifiable Benefits
Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
5. Identify Quantifiable and Non-quantifiable Benefits
BENEFIT
Training Cost Savings
COA #1
Status quo: No Reimbursement for Traveling >150 miles
COA #2
Reimburse all Soldiers Traveling >150 miles
COA #3
Reimburse critical and BRAC Soldiers Traveling >150 miles
COA #4
Reimburse only BRAC Soldiers Traveling >150 miles
QUANTIFIABLE
1 year
10 years
None
$19M
$205M
$11M
$119M
$2M
$21M
NON
Increased Operational Readiness
Enhance ARFORGEN
Increased Soldier morale
Increased Operational Readiness
Show Slide #51: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: 5. Identify Quantifiable and Non-quantifiable Benefits

52. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
Case Study
6. Define Alternative Selection Criteria
Cost of travel reimbursement 1 year
Cost of Travel reimbursement 10 years
Training Cost Savings 1 year
Training Cost Savings 10 years
Soldier morale, value perception, and personal finance stability
Improved Operational Readiness and enhancement to ARFORGEN
Show Slide #52: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: 6. Define Alternative Selection Criteria
Travel reimbursement information and data is manufactured for purposes of our lesson.

53. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
7. Compare Alternatives
Decision Matrix
Criteria
Weight
Data
Rank
Score
Travel Reimburse Cost (+) 1 yr
10%
0.0 4
0.4
75.0 1
0.1
43.5 2
0.2
7.5 3
0.3
Travel Reimburse Cost (+) 10 yrs
20%
0.8
821.2
476.3
82.1
0.6
Training Cost Savings(-) 1 yr
-18.8
-10.9
-1.9
Training cost Savings(-) 10 yrs
-205.3
-119.1
-20.5
Morale / Good Will
Operational Readiness
100%
1.9
3.1
2.7
2.3
Best
Acceptable
Marginal
Worst
COA #4
Rankings
COA #1
COA #2
COA #3
No Travel Reimbursement
Reimburse All
Reimburse Critical and BRAC
Reimburse BRAC only
Show Slide #53: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: 7. Compare Alternatives
Travel reimbursement information and data is manufactured for purposes of our lesson.

54. Army Cost Benefit Analysis
Battle Assembly Travel Reimbursement
8. Report Results and Recommendations
Executive Summary
The Army Reserve is considering reimbursing AR Soldiers that must travel greater than 150 miles to Battle Assembly.
Four Courses of Action (COAs) were developed to determine if travel reimbursement to BA is feasible.
All COAs require additional resources as travel costs are only partially offset by training cost savings.
Recommendation: Implement COA #2: Reimburse all AR Soldiers traveling greater than 150 miles to Battle Assembly.
Cost to implement COA 2:
Travel Costs: FY16 $75M FY $821.2M
Training Cost Savings: FY16 $18.8M FY $205.3M
Net ARC Costs: FY16 $56.2M FY $615.9M
Show Slide #54: Army Cost Benefit Analysis: Battle Assembly Travel Reimbursement (Cont.)
Facilitator’s Note: 8. Report Results and Recommendations
Travel reimbursement information and data is manufactured for purposes of our lesson.