Coordinating a Service Supply Chain under Arms Offset Program’s Intervention by Performance-Based Contracting

Table 3

Basic considerations about case’s parameters.

Contract duration; 8 years	Expected hardware cost : 2.5M
Budget constraint; = 20.0M	Expected software cost : 1.5M
Type T engine	Breakeven: 5 years
= 300, = 15	Unit maintenance cost : 0.2M
Unit cost = 0.5M	Profit: 10% of
Max. penalty rate = 10%	= 11
	= 14/year