DOD INFLATION HANDBOOK (FEB 2006)
DOD INFLATION HANDBOOK (FEB 2006)., This book developed from a PA&E analystís observations that inflation adjustments
had been misapplied to several significant analytical products used to inform
decisions in the Department of Defense. In at least one case the misapplication
changed the net present value (the deciding factor in the analysis) against the
recommendation. The DoD deals in large sums of money, frequently spent over
several years. Even small factors can result in large adjustments for major programs.
The use of incorrect inflation indices can easily generate a change of millions
of dollars for even a relatively small program.
As a result the Office of the Secretary of Defense (Program Analysis and Evaluation)
decided to contract for this book. The intent was to provide a relatively
comprehensive treatment of the topic of inflation with a focus on common applications
and the user/analyst. For those dealing with DoD budgeting and inflation
for the first time, the book would provide readily accessible directions and examples.
The book is also intended to provide a more rigorous background for the
analyst seeking a detailed understanding of the topic, or needing advice for how
to handle a particularly complex issue or application. Navigational aids are designed
to guide either individual to the appropriate section of the book for their