An enterprise portfolio approach for defence capability planning

Capability-based planning (CBP) is considered by many defence organisations to be the best practice for enterprise-level planning, analysis and management. This approach, loosely based around investment portfolio theory, is premised on balancing the cost, benefit and risk of capability options across the defence enterprise. However a number of authors have recently noted limitations of its current applications. The authors propose a more general, insurance-based approach, which can support the evolutionary improvement of the current CBP approach. This approach is implemented as hedging-based planning and aims to better reflect the enterprise nature of defence organisations, capturing both force structure and force generation aspects of military systems.     

Reinterpreting western use of coercion in Bosnia‐Herzegovina: Assurances and carrots were crucial

This article demonstrates that assurances and carrots accompanied credible threats every time Western coercion succeeded in Bosnia. This finding is hardly surprising as it merely confirms earlier research on coercive diplomacy, but it is nevertheless important because the crucial role played by assurances and carrots has been completely ignored in most analyses to date. It also has important policy implications at a time when Western, and particularly American, policy‐makers tend to ignore this fact at their peril. US policy towards Iraq and Western policy towards Yugoslavia have been based almost exclusively on the stick in recent years, and its lack of success is therefore not surprising. If Western policy‐makers had learned the right lessons from Bosnia, they would have known that strategies coupling credible threats with credible assurances and carrots would have been more likely to succeed.     

A reply to Larry cable

Recent counterinsurgency experiences in Iraq and Afghanistan have demonstrated that the local operating environment often is dominated by indigenous power-holders. As counterinsurgents seek to establish control over the local population, collaboration with these agents has become an essential aspect of contemporary counterinsurgency. Although the practice of constructing collaborative relationships with indigenous power-holders might be perceived as unconventional by today's counterinsurgents, the approach itself goes back to the colonial era in which modern counterinsurgency has its roots. This article explores the dynamics, benefits, and dangers of collaborative relationships with indigenous power-holders by analysing an infamous episode in Dutch colonial history, the case of the collaboration between Dutch colonial authorities and warlord Teuku Uma during the Aceh War (1873–1913). This relationship ended in disaster for the Dutch as Uma departed their side at the moment he had become their pivotal asset in the local political landscape. The article explains that the Dutch succeeded to co-opt Uma, but failed to control him as they lacked the will and means to do so. Furthermore this case study provides an insight in the way the Dutch colonial authorities dealt with the complex process of intelligence-gathering in a fragmented indigenous society.     

Game theoretic analysis of maximum cooperative purchasing situations

This article introduces maximum cooperative purchasing (MCP)‐situations, a new class of cooperative purchasing situations. Next, an explicit alternative mathematical characterization of the nucleolus of cooperative games is provided. The allocation of possible cost savings in MCP‐situations, in which the unit price depends on the largest order quantity within a group of players, is analyzed by defining corresponding cooperative MCP‐games. We show that a decreasing unit price is a sufficient condition for a nonempty core: there is a set of marginal vectors that belong to the core. The nucleolus of an MCP‐game can be derived in polynomial time from one of these marginal vectors. To show this result, we use the new mathematical characterization for the nucleolus for cooperative games. Using the decomposition of an MCP‐game into unanimity games, we find an explicit expression for the Shapley value. Finally, the behavior of the solution concepts is compared numerically. © 2013 Wiley Periodicals, Inc. Naval Research Logistics 60: 607–624, 2013     

Country survey VI: Australia

Australia is a geographically large country, with the world's longest national coastline to defend, but a relatively small economy of some 17.5 million people. Since World War II, Australia has faced the dilemma of how to structure defence policy in the absence of an identifiable threat. Its policy of self‐reliance aims to permit Australia to conduct defensive operations in the event of low/medium level threats without depending immediately on its allies. This is to be achieved through the technological sophistication of defence equipment, a highly professional but small defence force and local industry support.

The burden of defence, measured as the share of defence outlay in GDP declined from about 3% in 1971–72 to about 2.3% in 1993–94. It has been the Government's policy to encourage the development of local defence‐related industry, in particular in areas such as: electronics/optics; communications and information technology; aerospace; shipbuilding and repair, munitions; and land vehicles. However, defence procurement has a small impact on the Australian economy as a whole.     

Country survey XVIII: The two Koreas' defence economy

In this paper we change the structure of the basic conflict model. This makes it possible to found an economic theory of war and peace. Apart from few exceptions there exist no peace equilibria in the related literature of conflict theory. The aim of the paper is to fill this gap, because most parts of the world live in peace. Further we show that negotiations are possible to avoid a war. The main result is that war breaks out only if the distribution of resources and/or the effectiveness of weapons is sufficiently unequal.     

The many-product cargo loading problem

An algorithm, based upon dynamic programming, is developed for a class of fixed-cost cargo loading problems. The problems can be formulated as integer programming problems, but cannot be efficiently solved as such because of computational difficulties. The algorithm developed has proved to be very efficient in an actual operations research study involving over 500 different cargo items, more than 40 possible stops and several types of transportation vehicles. A numerical illustration is provided.