Generally, it is said that 65% of National Defense Expenses (Investment, Ordinary budget) are the cost of Operation & Maintenance phases among Life Cycle phases of the Korean Weapon Systems because they made a requirement-centered development and looked over costs in the 1980's when Defense Acquisition was focused on building up the physical military strength.
Advanced countries including the U.S. regard the Life Cycle Cost as the main factor of decision-making for reinforcing the military power and make efforts as like various symposiums, panel discussion, CBS segmentations which coincide with the LCC and LCC Analysis. The primary object of this research is the presentation of the standard CBS which is necessary for the weapon system acquisition and the calculation of the LCC which applies this.
The LCC is the whole expense from Development phase to Wear-out phase which includes Investment Costs and Operation & Maintenance Costs. In this research, we check the omission of the expense related to details for the weapon system acquisition and analyze the cost of similar weapon systems based on the CBS for the weapon system selection by applying the Korean Defense CBS Model. Further, this research shows the useful model by which decision makers select the best weapon system when they consider cost-appropriateness during the life cycle period.
We can exactly calculate R&D costs, Investment costs, O&M costs and LCC using the Korean Defence CBS Model. On the other hand, we know that the estimation model has less precision for units costs, what is worse, the error of cost estimation using the estimation model for LCC is bigger and bigger. Therefore, we must establish the Korean Defence CBS Model for efficient defense budget execution and early subjective decision for weapon systems and have to institutionalize the LCC analysis.