A Dual-Use Enterprise Context for Vehicle Design and Technology Valuation 2004-01-1588

Developing a new technology requires decision-makers to understand the technology's implications on an organization's objectives, which depend on user needs targeted by the technology. If these needs are common between two organizations, collaboration could result in more efficient technology development. For hybrid truck design, both commercial manufacturers and the military have similar performance needs. As the new technology penetrates the truck market, the commercial enterprise must quantify how the hybrid's superior fuel efficiency will impact consumer purchasing and, thus, future enterprise profits. The Army is also interested in hybrid technology as it continues its transformation to a more fuel-efficient force. Despite having different objectives, maximizing profit and battlefield performance, respectively, the commercial enterprise and Army can take advantage of their mutual needs. Developing the new technology in a dual-use context allows the Army to leverage the design and production capabilities of the commercial enterprise, while the enterprise increases its hybrid production volume with military trucks during the low demand phase of hybrid market penetration.

This article describes the valuation of hybrid technology from both the enterprise and military perspectives using a previously developed enterprise decision model, which utilizes comprehensive vehicle simulation to drive decision-making. The enterprise is represented in a mathematical formulation that simultaneously optimizes initial vehicle design, product pricing, operating costs associated with capacity investment and design decisions, and the value created by the new products. The application of hybrid technology in the medium truck market illustrates the impact of dual-use decision-making on the commercial enterprise and satisfaction of military performance targets.