Date of Award

3-2007

Document Type

Thesis

Degree Name

Master of Science in Cost Analysis

Department

Department of Systems Engineering and Management

First Advisor

Jeffrey S. Smith, PhD

Abstract

Previous studies have established a link between Human Capital and performance both at the firm and the individual level. These studies have shown that performance can be improved with additional personnel and/or higher education levels. This study attempts to build on this relationship by using the Cobb-Douglas Production function to relate inputs to outputs. The inputs to the function are the number of cost analysts positions, military and civilian, and an education variable for the number of master’s degrees in the field. The measure of output is the average cost overrun of Air Force contracts. A time series regression was conducted while controlling for other economic factors such as budgetary fluctuations and inflation. The results show positive effects of human capital on performance. Other policy implications of the study are the importance of budgetary stability, inflation predictions and the Defense Acquisition Workforce Improvement Act (DAWIA).

AFIT Designator

AFIT-GCA-ENV-07-M5

DTIC Accession Number

ADA469879

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