DOD INFLATION HANDBOOK (FEB 2006)

DOD INFLATION HANDBOOK (FEB 2006)., This book developed from a PA&E analyst’s 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 specific purpose.