Portfolio Selection Challenges in Defense Applications

Throughout the federal government, decision makers at multiple levels face the problem of choosing a portfolio of investments (e.g., projects, activities, or programs) to fund, given current and projected budget restrictions. In the Department of Defense in particular, a number of factors complicate investment choices. These factors include long time horizons, program interactions, multiple objectives, significant uncertainty in both project costs and project outcomes, multiple stakeholders, and large numbers of alternative investments. We propose a unified formal approach to defense portfolio investment analysis, and challenge the Decision Analysis community to devise methodologies and develop tools needed to implement this framework.