A survey of cost effectiveness methodologies used in the defense industry is presented and an application of cost effectiveness is developed. A breakdown in the level of the decisionmaking is made and follows the example of the Weapon System Effectiveness Industry Advisory Committee. Examples of cost effectiveness methodologies at each decisionmaking level are shown.

The multidisciplinary nature of the Architecture-Engineering-Construction industry, the involvement of parties with different professional backgrounds and the use of incompatible software at different phases of project development result in fragile communication between design and construction. The software used at different phases of project development represents and manipulates product knowledge rather than process knowledge, so do the design drawings and specifications. The process knowledge that remains trapped in the design phase can however be used in interpreting the meaning about the form represented on design drawings. A better understanding of process knowledge can restructure and enhance construction related processes and strengthen the communication between design and construction. This research focuses on reconfiguring the flow of information between architectural design and construction by identifying that part of the process knowledge also referred to as "design intent," which is of essence to cost estimating. Design intent can improve various facets of cost estimating. This research discusses the potential use of design intent knowledge in material selection and substitution, shop drawing preparation and value engineering. The first objective of the research is to define the term design intent, find examples of it and classify it in a format that can be used in construction applications. Thus, design intent has been classified under four classification schemes in this research: (1) Attributive; (2) Relational; (3) Priority; and (4) Implicit/ Explicit. The first two classification schemes have further been structured into its detailed subclasses and the potential use of each type of design intent has been discussed in detail. The second objective of the research is to represent and reason with design intent to improve cost estimating applications. Thus, the thesis describes an object-oriented design intent representation model implemented in a proof-of-concept prototype called Skull Object Space (SOS). The benefits of using such a representation model is illustrated in a material application module implemented as a small scale computer prototype that makes material selection and substitution for the contractor. Both SOS and the Material Application Module provide useful framework for future enhancements in externalization and representation of design intent. / Master of Science

No / In the past, transaction cost economics (TCE) literature has largely stressed the benefits of contractual commitments in relationships. TCE traditionally recommends safeguarding specific assets against holdup, thus reducing behavioral uncertainty. In contrast, the reverse side of the coin has been disregarded for a long time. Firms may lose some of their flexibility and thus the opportunity to benefit from future emerging business activities due to prior contractual commitments. Flexibility becomes especially important in dynamic environments where there is rapid technological change. To manage the emergent trade-off between contractual commitments and flexibility in dynamic markets, the authors propose a real options approach. The value of a firm's flexibility to switch to a new trading partner is represented by a real switching option. It can be shown how contractual commitments directly affect the value of the switching option. To clarify, the authors numerically analyze the respective trade-off and derive implications for an optimal choice of contractual commitments.

This study examines the significance of quality when included in the specification of a hospital cost function. Also, this research estimates a value for scale economies in order to determine if the average hospital experiences increasing returns to scale in the production of hospital care, verifying such findings in previous econometric studies. Furthermore, two functional forms are compared: the Cobb-Douglas and the translog. The results of this study demonstrate that quality has a significant impact on costs. This relationship is positive meaning increasing quality will also increase the cost of producing hospital care. The results for scale economies demonstrate that the average hospital experiences increasing returns to scale in the production of hospital care, which is consistent with previous research. Lastly, based on an F-test, this study is able to accept the translog as the appropriate functional form. / Master of Arts

Background: National School Lunch Program (NSLP) meals have been found to be of higher dietary quality than home-packed lunches. Objective: To explore the cost, including time, of NSLP versus different categories of home-packed lunches. Methods: Data from pre-kindergarten and kindergarten lunches from three schools in southwest Virginia were used for this study. Each lunch item was priced, and a direct cost was assigned based on the lunches contents. Time assessments were conducted to determine the amount of time to prepare each lunch, with a monetary value for time computed based on average salary of the respective county. A non-parametric Kruskal Wallis test was used to compare the direct cost, time, time cost, and the full cost of the meals. Medians were computed based on outlier data. Results: The lowest median direct cost was found for homemade packed lunches ($1.55), followed by homemade school lunches ($2.11), then convenience packed lunches ($2.12), and then NSLP lunches ($2.15). When incorporating preparation time, the NSLP lunch cost the least ($2.15), followed by convenience packed lunches ($2.56), then homemade packed lunches ($2.92), and then homemade school lunches ($11.32). Seventy-six percent (n=414) of home-packed lunches contained sugar-sweetened beverages and/or dessert food items, accounting for almost one-quarter (21.8%) of the cost of all home-packed lunches. Conclusion: When time is computed as part of the total cost of NSLP versus home-packed lunches, the NSLP is the least expensive option. In conjunction with the nutritional benefits of the NSLP, this time-cost data may help shift purchasing and consumption patterns. / Master of Science / Background: National School Lunch Program (NSLP) meals served at school have been found to be healthier than home-packed lunches. Objective: To investigate the differences in cost, including time, among NSLP lunches and different categories of home-packed lunches. Methods: Data from pre-kindergarten and kindergarten lunches from three schools in southwest Virginia were used for this study. Each lunch item was priced, and a direct cost was given based on the items in each lunch. Researchers then made each lunch or recorded packaging preparation times to determine the amount of time to prepare each lunch, with a value for time given in dollar form based on average salary of the respective county. A non-parametric Kruskal Wallis test was used to compare the direct cost, time, time cost, and the full cost (i.e. direct cost + time cost) of the meals. The data is based on medians to give a better representation of the data. Results: The lowest median direct cost was found for homemade packed lunches ($1.55), followed by homemade school lunches ($2.11), then convenience packed lunches ($2.12), and then NSLP lunches ($2.15). When incorporating preparation time, the NSLP lunch cost the least ($2.15), followed by convenience packed lunches ($2.56), then homemade packed lunches ($2.92), and then homemade school lunches ($11.32). Seventy-six percent (n=414) of home-packed lunches contained sugar-sweetened beverages and/or dessert food items, accounting for almost one-quarter (21.8%) of the cost of all home-packed lunches. Conclusion: These results show an interesting difference in lunch cost based on category when considering cost and time. Given the research on the health benefits of NSLP meals over home-packed lunches, the cost data may help shift purchasing and eating patterns among parents of school-age children.

No / The aim of this study was to estimate the patterns of care and annual levels of health care resource use attributable to the management of different wound types by UK’s National Health Service (NHS) in 2012/2013 and the annual costs incurred by the NHS in managing them. This was a retrospective cohort analysis of the records of 2000 patients in The Health Improvement Network (THIN) Database. Patients’ characteristics, wound-related health outcomes and all health care resource use were quanti ed, and the total NHS cost of patient management was estimated at 2013/2014 prices. The NHS managed an estimated 2⋅2 million patients with a wound during 2012/2013. Patients were predominantly managed in the community by general practitioners and nurses. The annual NHS cost varied between £1⋅94 billion for managing 731 000 leg ulcers and £89⋅6 million for managing 87 000 burns. Sixty-one percent of all wounds were shown to heal in an average year. Resource use associated with managing the unhealed wounds was substantially greater than that of managing the healed wounds (e.g. 20% more practice nurse visits, 104% more community nurse visits). Consequently, the annual cost of managing wounds that healed in the study period was estimated to be £2⋅1 billion compared with £3⋅2 billion for the 39% of wounds that did not heal within the study year. Within the study period, the cost per healed wound ranged from £698 to £3998 per patient and that of an unhealed wound ranged from £1791 to £5976 per patient. Hence, the patient care cost of an unhealed wound was a mean 135% more than that of a healed wound. Real-world evidence highlights the substantial burden that wounds impose on the NHS in an average year. Clinical and economic bene ts to both patients and the NHS could accrue from strategies that focus on (a) wound prevention, (b) accurate diagnosis and (c) improving wound-healing rates. / NIHR, Bradford Institute for Health Research, 3M United Kingdom Plc, Activa Healthcare Ltd, Brightwake Limited, KCI Medical Limited, Longhand Data, Medira Limited, Mölnlycke Health Care Limited, Park House Healthcare Limited, Pulsecare Medical Limited, Smith and Nephew Medical Limited, Sozo Woundcare Limited, Systagenix Wound Management Limited, Trio Healthcare, Urgo Limited, Willingsford Limited

published_or_final_version / Business / Doctoral / Doctor of Philosophy

published_or_final_version / Community Medicine / Master / Master of Public Health

Medical cost analysis is an important part of treatment evaluation. Since resources are limited in society, it is important new treatments are developed with proper costconsiderations. The mean has been mostly accepted as a measure of the medical cost analysis. However, it is well known that cost data is highly skewed and the mean could be highly influenced by outliers. Therefore, in many situations the mean cost alone cannot offer complete information about medical costs. The quantiles (e.g., the first quartile, median and third quartile) of medical costs could better represent the typical costs paid by a group of individuals, and could provide additional information beyond mean cost. For a specified patient population, cost estimates are generally determined from the beginning of treatments until death or end of the study period. A number of statistical methods have been proposed to estimate medical cost. Since medical cost data are skewed to the right, normal approximation based confidence intervals can have much lower coverage probability than the desired nominal level when the cost data are moderately or severely skewed. Additionally, we note that the variance estimators of the cost estimates are analytically complicated. In order to address some of the above issues, in the first part of the dissertation we propose two empirical likelihood-based confidence intervals for the mean medical costs: One is an empirical likelihood interval (ELI) based on influence function, the other is a jackknife empirical likelihood (JEL) based interval. We prove that under very general conditions, −2log (empirical likelihood ratio) has an asymptotic standard chi squared distribution with one degree of freedom for mean medical cost. Also we show that the log-jackknife empirical likelihood ratio statistics follow standard χ2 distribution with one degree of freedom for mean medical cost. In the second part of the dissertation, we propose an influence function-based empirical likelihood method to construct a confidence region for the vector of regression parameters in mean cost regression models with censored data. The proposed confidence region can be used to obtain a confidence interval for the expected total cost of a patient with given covariates. The new method has sound asymptotic property (Wilks Theorem). In the third part of the dissertation we propose empirical likelihood method based on influence function to construct confidence intervals for quantile medical costs with censored data. We prove that under very general conditions, −2log (empirical likelihood ratio) has an asymptotic standard chi squared distribution with one degree of freedom for quantile medical cost. Simulation studies are conducted to compare coverage probabilities and interval lengths of the proposed confidence intervals with the existing confidence intervals. The proposed methods are observed to have better finite sample performances than existing methods. The new methods are also illustrated through a real example.

The U.S. Army Corps of Engineers is a federal agency with a mission to develop water resource projects to benefit the nation. Some of its large scale projects have been built to benefit cities, but through unintended consequences have caused economic and environmental damages. For example, its control of Mississippi River flooding has protected the City of New Orleans, but contributed to land loss in coastal Louisiana, and by some accounts, made the population more susceptible to hurricane damage. The agency has now embarked on a mission to restore some of the damaged environmental areas. This dissertation evaluates whether policies and practices used by the agency to evaluate and select plans to implement is logically flawed and could produce suboptimal project selection. The primary issue is the practice of including only implementation costs in the analysis while excluding other positive and negative economic impacts. A case study is performed using the method to evaluate a traditional economic development project for which optimal project selection has already been determined using widely accepted benefit-cost practices. The results show that the Corps' environmental project evaluation method would cause rejection of the most efficient plan. The loss of welfare that would result from using this technique is measured by comparing the welfare gain of the optimal project to the welfare gain of the suboptimal projects which could be selected using the flawed methodology. In addition, the dissertation evaluates whether suboptimal results could be produced using two other current Corps policies: selecting projects based on production efficiency, and the exclusion of environmental benefits from the discounting process. For the first policy, a simple counter example shows how clearly inferior choices may come from including only supply considerations in investment choices. For the second policy, it is demonstrated mathematically that refraining from discounting benefits while discounting costs causes a bias towards selection of plans that take longer to build, are delayed in their implantation, or a combination of the two.