1. Cost-Benefit Analysis Training: APS Case Study (cont’d)
Show Slide #1: America’s Army: The Strength of a Nation
Facilitator’s Note:
Cost-Benefit Analysis Training:
APS Case Study (cont’d)

2. Reporting Results
You return to your senior leader to report the results of your CBA
Senior leader provides new information
Funding for new military construction (MILCON) is available
POM/Budget cost should reflect budget offsets (existing spending authority)
Resale value of LAMS should be considered
How do you respond?
Show Slide #2: Reporting Results
Facilitator’s Note: Activity Step 2 Identify key elements of information from case study data
You return to your senior leader to report the results of your CBA
Senior leader provides new information
Funding for new military construction (MILCON) is available
POM/Budget cost should reflect budget offsets. That is, we want to report the additional funding needed beyond what has already been authorized by Congress. Hint: Subtract already authorized funding from total cost.
Resale value of LAMS should be considered
How do you respond? (After “Yes Sir”, that is!) In fact, one of the major benefits of CBA is that gaining understanding of costs and benefits tends to generate new alternatives. Recall the example from theater of shipping goods through Kuwait and Jordan. The information generated through CBA brought a new option to light: use the cost information as leverage to negotiate a lower price to ship through Jordan, while gaining additional geo-political benefits. This is one example of why the process is not strictly linear. In order to have the best value proposition, the new information should be incorporated into the CBA. That will be our next activity.

3. Terminal Learning Objective
Action: Apply Army Cost Benefit Analysis to a More Complex Scenario
Condition: You are training to become an ACE with access to ICAM course handouts, readings, spreadsheet tools, and awareness of Operational Environment (OE) variables and actors.
Standard: With at least 80% accuracy:
Identify key elements of information from case study data
Prepare CBA briefing including Executive Summary
Show Slide #3: TLO
Facilitator’s Note: Read the TLO verbatim to the students
Action: Apply Army Cost Benefit Analysis to a Simple Scenario
Condition: You are a cost advisor technician with access to all regulations/course handouts, and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors
Standard: with at least 80% accuracy:
Review the Army 8 Step Cost Benefit Analysis process
Identify key elements of information from case study data
Enter relevant scenario data into macro enabled templates to calculate cost data, and inform managerial cost decisions

4. Case Study Assignment Divide into teams of 4 or 5
Read the Army Prepositioned Stocks (APS) case study
Prepare a Cost Benefit Analysis using the additional information given
Address each of the eight steps and identify any changes to each as a result of the additional information
New facts and assumptions; quantifiable and non quantifiable benefits; decision criteria, etc.
Include COAs 1-3 from the previous case
Include LAMS resale value in COAs 1 and 2
Prepare a cost estimate for the new COA (MILCON)
Prepare one slide for each of the eight steps according to the templates provided
Present your Executive Summary slide to the class
Be prepared to answer the CBARB’s (class) questions
Show Slide #4: Case Study Assignment
Facilitator’s Note: Read the Army Prepositioned Stocks (APS) case study
Prepare a Cost Benefit Analysis using the additional information given
Address each of the eight steps and identify any changes to each as a result of the additional information
New facts and assumptions; quantifiable and non quantifiable benefits; decision criteria, etc.
Include COAs 1-3 from the previous case
Include LAMS resale value in COAs 1 and 2
Prepare a cost estimate for the new COA (MILCON)
Prepare one slide for each of the eight steps according to the templates provided
Present your Executive Summary slide to the class
Be prepared to answer the CBARB’s (class) questions

5. Cost Benefit Analysis U. S
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 1: Define and scope the problem/opportunity:
Show Slide #5: Cost Benefit Analysis U.S. Army Eight Step Process
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process. 5

6. Cost Benefit Analysis U. S
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 2: Formulate assumptions and constraints:
Show Slide #6: Cost Benefit Analysis U.S. Army Eight Step Process (Cont.)
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process. 6

7. Cost Benefit Analysis U. S
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 3: Define various Courses of Action:
COA #1
COA #2
COA #3
COA #4
APS Site
COAs
Show Slide #7: Cost Benefit Analysis U.S. Army Eight Step Process (Cont.)
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process.

8. Cost Benefit Analysis U. S
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 4: Develop Quantifiable and Non-Quantifiable Cost
estimate for each Course of Action: (see calculation chart for
computations)
COA #1
COA #2
COA #3
COA #4
QUANTIFIABLE COST POM/Budget
FY10-FY17
QUANTIFIABLE COST (Life Cycle)
FY10-FY34
NON-QUANTIFIABLE COST (POP/Budget)
NON-QUANTIFIABLE COST (Life Cycle)
Show Slide #8: Cost Benefit Analysis U.S. Army Eight Step Process (Cont.)
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process.

9. NON-QUANTIFIABLE BENEFIT
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 5: Identify Quantifiable and Non-quantifiable
Benefits for each Course of Action: (see calculation chart for computations)
COA #1
COA #2
COA #3
COA #4
QUANTIFIABLE BENEFIT .
NON-QUANTIFIABLE BENEFIT
Show Slide #9: Cost Benefit Analysis U.S. Army Eight Step Process (Cont.)
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process.

10. Cost Benefit Analysis U. S
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 6: Define Courses Of Action selection criteria:
Show Slide #10: Cost Benefit Analysis U.S. Army Eight Step Process (Cont.)
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process.

11. Use Excel Decision Matrix
Cost Benefit Analysis U.S. Army Eight Step Process “Army Pre-Positioned Stock (APS)”
Step 7: Compare Courses Of Action:
Use Excel Decision Matrix
Show Slide #11: Cost Benefit Analysis U.S. Army Eight Step Process (Cont.)
Facilitator’s Note: Main point of slide:
Provide student with worksheet template to assist in developing the response to each of the Eight Steps in the Army CBA process.

12. Step 8 – Report Results and Recommendations
Decision package must present a strong value proposition. That is, it must clearly show that the benefits of the recommended
COA more than justify the costs and risks.
Show Slide #12: Step 8 – Report Results and Recommendations
Facilitator’s Note: Activity Step 2 Identify key elements of information from case study data
The decision package must present a strong value proposition. That is, it must clearly show that the benefits of the recommended COA more than justify the costs and risk.
The next slide includes a template for the Executive Summary slide.
The CBA Guide, available at the Cost & Performance Portal, includes a narrative report for the APS example.

13. Step 8: Report Results and Recommendations
Executive Summary (Template)
Be concise as this information should fit on one slide!
Brief background and problem statement
Brief description of methods (how many COAs evaluated, etc.)
Resource requirements (existing or additional).
Recommendation: Brief description of COA chosen and brief explanation of reasoning (costs vs. benefits). May refer to decision criteria here.
Cost to implement recommended COA:
FY 12-14:
POM (FYs 12-19):
Life Cycle (FY12-FY36):
Show Slide #13: Step 8 – Report Results and Recommendations (Cont.)
Facilitator’s Note: Activity Step 2 Identify key elements of information from case study data
The preferred reporting method is a written narrative.
Examples may be found in The CBA Guide, available at the Cost & Performance Portal, includes a narrative report for the APS example.

14. Instructor Support Materials:
Step 8: Report Results and Recommendations
Executive Summary
The Army is required to update prepositioned stocks to respond to global contingencies, incorporating vehicles from Iraq.
Three Courses of Action (COAs) were developed to determine the best way to update APS.
All COAs require additional resourcing.
Recommendation: Implement COA #2: Purchase Temporary Storage Facilities (LAMS)
Least cost to the Army. Greatest benefit: provides greatest flexibility for providing assets on short notice; supports availability for contingencies; maintains highest quality vehicle response readiness for the least cost to the Army.
Cost to implement COA 2:
FY 12-14: $ 144.4M
POM (FYs 12-19): $ 320M
Life Cycle (FY12-FY36): $ 1,041M
Show Slide #14: Instructor Support Materials: Step 8: Report Results and Recommendations
Facilitator’s Note: Activity Step 2 Identify key elements of information from case study data
The preferred reporting method is a written narrative.
Examples may be found in The CBA Guide, available at the Cost & Performance Portal, includes a narrative report for the APS example.

15. Instructor Support Materials
Additional materials:
Solution to case study in narrative form
DVD of CBA briefing by Ms. Cecile Batchelor
Show Slide #15: Instructor Support Materials
Facilitator’s Note: Additional materials:
Solution to case study in narrative form
DVD of CBA briefing by Ms. Cecile Batchelor

16. Terminal Learning Objective
Action: Apply Army Cost Benefit Analysis to a More Complex Scenario
Condition: You are training to become an ACE with access to ICAM course handouts, readings, spreadsheet tools, and awareness of Operational Environment (OE) variables and actors.
Standard: With at least 80% accuracy:
Identify key elements of information from case study data
Prepare CBA briefing including Executive Summary
Show Slide #16: TLO Summary
Facilitator’s Note: Restate the TLO
Action: Apply Army Cost Benefit Analysis to a Simple Scenario
Condition: You are a cost advisor technician with access to all regulations/course handouts, and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors
Standard: with at least 80% accuracy:
Review the Army 8 Step Cost Benefit Analysis process
Identify key elements of information from case study data
Enter relevant scenario data into macro enabled templates to calculate cost data, and inform managerial cost decisions
Or”
Facilitator's at this time, have one learner from each group to explain the most important take away to them from this lesson. Facilitate a discussion on each answer.