LETTER TO MR. E. DESAUTELS FROM (SANITIZED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B00236R000100090002-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 28
• Document Creation Date: December 23, 2016
• Document Release Date: September 4, 2012
• Sequence Number: 2
• Publication Date: February 9, 1982
• Content Type: LETTER

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STAT
CENTRAL INTELLIGENCE AGENCY
WASHINGTON, D.C. 20505
9 February 1982
Mr. E. Desautels
Assistant Security Manager
Department of the Navy
Office of Naval Research
Arlington, Virginia 22217
Dear Mfr. Desautels:
The four articles from the 36th and 39th MORS forwarded to this Agency
18 September 1980 for classification determination have been reviewed with
the following results:
1. The three articles written by Agency employees (36th MORS,
pages 135-143; 39th MORS, pages 31-33; and 39th MORS, pages 55-58)
have been reviewed by their respective authors, who have determined
that the articles must remain classified at the SECRET level to protect
sources and methods. They are properly classified under Executive
Order 12065, Section 1-301(c).
2. The article from the 36th MORS, pages 114-128, although
written by an Air Force officer, as reviewed by the Classification
Review Division for Agency equities. It is our recommendation that
the article remain classified at least at the CONFIDENTIAL level to
protect foreign government information and foreign relations,
E.O. 12065, Section 1-301(b) and 1-301(d). There are portions of
this article, however, that may have to remain SECRET to protect
U. S. military information under Section 1-301(a), but the author
or someone authorized by the Air Force should be asked to make this
judgment.
We are very sorry that a reply to your request for review of these articles
has taken so long. We appreciate your patience and hope that you will call on us
if we can be of further help.
Distribution:
Orig - Addressee
1 - Liaison w/Dept. of Navy
I Chrono
Chief, Classification Review Division
Office of Information Services
Directorate of Administration
STAT
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STAT
MEMORANDUM FOR:
6 January 1982
Classification Review
Division
Office of Information
Services
STAT
FROM:
Center
and Education
intormation cience
Office of Training
SUBJECT:
Classification Review
I have reviewed "The Future of the Soviet Badger
Bomber." The information and methods involved still merit
the classification of SECRET. A reevaluation of the matter
in conformity with paragraph 2-210 of the Navy Classification
Guide produced the determination that the document falls in
category a.i.(a) which should remain in e,:fect until 1988
or until four years after the number of Badger Bombers in
the Soviet Air Order of Battle ha been reduced to zero.
STAT
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STAT
STAT
STAT
MEMORANDUM FOR:
FROM
SUBJECT
'?6. January 1981
ClassiticatLon Review Division
hief
Defense & Economic Accounts Branch, SOVA
: Review of Classified Documents
nd I have reviewed the attached documents
and believe that the classification level for each paragraph
and the overall document is still appropriate.
STAT
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I hope this is what is needed.
Many thanks for your patience and help
in a most confusing a(Itivity.
Date 26 January 1982
FORM n it USE PREVIOUS
5-75 I ti 1 EDITIONS
Gi 0 : 19131 0 - 345-783
STAT
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MILITARY ECONOMIC ANALYSIS
THE KEY TO EVALUATING MILITARY ACTIVITIES (U)
(THLS PAPER IS SECRET)
Central Inreiiigerkx Agency
ImmInverrow
(U)Seday's presentation offers an introduction to
the complex field of military eeeeomice. This disci- ,
pline provides a way to Measure trends and to compere
diverse forces. It cieeeles one to measure the priori-
ties assigned by a nation to military activities by
quantifying their costs, in curreecy, in actual re-
sources, and in opportunities foregone in other sectors.
The practitioner of military oyerations research is used
to considering individual system costs as an important
aepect of his analysie. The CIA has expanded this coot
aspect to military activities as a whole, thereby addiee
a new dimension to military anelys! 1. Useful by-preleets
of the niliteey ecenomic analysis are improved 'reality
eeeteel fee feLee eeteeetee wee/ areeaaececc
force steucturee, orgatileation. and operating leoeeduaes.
(U)Each year we publish eseimates of Si,. costs over
tine of Soviet defense activities as meaeured in rubles
and in deletes. /n recent years these eetimaiee have
been wieely used by the Congress andavithin the Depart-
ment of Defense. The dollar estimates, foe esemple, have
been prominently displayed in the Secretary of Deferee's
annual posture statement.
(teehe value of the aggregate eutimates was summed
up quite well by Secretary BrOVII in a . iecrandem to the
Director of Centrel Intelligence datea nay 20, 1977:
reeeemie anelysin ha'- r,.,me to play a
signiticene role in eer a assent .f the
militery bRienre between the te5 awl the
Soviet Union. . .
We find the reports and analyse& c2r--
rem:'1, being produced in the ewes of mili-
tary eronerics to be very ucefult in fact
they are the basis of the conperative ecoree-
mic analysea employed by Deienee. She
dollar estimates provide the best, steel*
aggregated oomparative measure of US and
Soviet defense efforts. The ruble etiti-
Mien ore of Wain in assessing CUZIreilt
ane projected Sovtet economic problems, the
wee they view their wilitery forces eel
goals, and the ability oZ the Soviets to
coveete with es ever the lone tere.
THE wallumt Of 8eel2T COSTS
(T)llie- coats ot Soviet eefenee activities ca., be
measured in many different ways. The mire ceeren ways
ate I
31
--Cermet Ruble Costs
What it would coat the Soviets ming Soviet
established prices and pay rates to pay for
their defense activities.
--Con ant Fable Costs
What it would coat the Soviets using their
establinhed prices and pay rates of a bees
year to pay tot their defense activities.
--teller east*
aat it would cost in the OS %ma . US prices
and pay retwe (either base year or current) tos
--Prodeee Soviet designs
--Operets and maintain forces according to Soviet
practices
What it eitild cost the Soviets veins theereticel
prices which precisely captured the value of
resceirses (and profit) to pay for thetr defense
activities.
ee%PeteteeitY...feleA
What it costs in terse of foregone activities in
the non-defense sector to provide the defames
eetivities e.g. sic r growl up Cite.
Mete t,rm "established prices used in the defi-
nitionn of cueeent and constant ruble cents is important.
The Soye .s atteept to plan totally their economy. This
includes establishing a fixed price for every good mu'
,ervice. Onc, established, they tend to remain in effect
fur yeart eiteout regard'ece the ectual cost of an it, .
reeeteeelli, les reletire price eysten is co far 1EA0,,;,1
[I'M reality that massive price revisions hoc: .1 neces-
eery. Such re elan': occurred in 1955 and 146/. When
we, or others, estimate the ruble costs of Soviet de-
fense activities, them, in see estimating ',eat the Soviets
have decided eo pay fat a vet ef activities rather than
west it would have cost Uwe if prices had been set in a
free wArket by the forces ef sepply tied demend. It is
e.actor cost,- which capture this latter concept.
Wake CiA uses cenetant ruble coets for its nettle
estimates of eaviet defense rotivit'ite leteent estleatee
by the Defame' entelligence limey and by a private in-
dividual, FIW eat, Wive used current reble costs. Roth
types of estieetal have their saes, I.t it oust be
teesabered teat estimates is: current eebles include tee
effects of ieflatioe is the Soviet emery's"? And changes- in
Soviet prielee pellet:re for military woods.
ESPihe eeeres of Soviet inflation is difficult to
encase. Soviet ofeiclal price indlcso deny it exiiete.
Thal: indices, however, are clearly biased. This Wee'
is evident hat h in the manner in titich the indicee are
constructed a el in their results. for exempla', we
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MILITARY EGON? CC ANALYSIS - IlIg KEY TO EVALUATING MILITARY ACTIVITIES (U)
recently required a Scedet parametrec model for esti-
mating shipbullding costa. Cemessing thi, modeler se e
sults, etch are in constant prices, with ectual priest
information for specific shipe indicates an inflation
rate of about SS for shiPbuilderig. Other preliminary
work indicates an average inflationary rats for defense
industries of about ele We eseect to be:pro-ma our meet-
mates of Soviet inflation during the next year.
ltstimatinnethe Annual Costs of Sevret Defense Activities
(U)Any attempt to estimate Soviet defense speedlog
le hampered by thr eeot that, LA the UWER, inf merlon
on defense spending is s cieJely guarded state secret.
Cely one, statistic--a single line entry for 'defames- in
the anneal State Sudeet--is announced. This figure is
virtually useless, because its soups is not clearly
defined, and its Rase appears to be manipulated at wal1
to suit Soviet political purposes. ((lange' in the
announced defense figure fromyear to year besr ne
relationshtp to changes we observe in the forces thee-
selves.)
(C)becentse of the lack of meaningful official data.
CIA surreally provide elterturtive estimetes of Soviet
defense activities ie both dollar and ruble berme. loth
estimate* begin with the detailed identificaticn ane
listing of the ptlysiics1 component, and activities whiet
make up the Soviet defense program for ? gleam year. Sy
a variety of meth.ts this physical diet base is ct.-
vetted into two aggregate., one denominated in rubiee,
the other fer dollars. For saw, components, such on eilie
tray peuaroneel costs, the physical data are coated
directly, usiej available ruble prices and costs and
dollar prLem and coat.. ear other+, coevereieee ere
rade free one value base to the other by applying dollar-
to-rible and, to a much sore united degree, ruble-tee
dollar ratios which reflect the estimated relative
efficiency of the Soviet Union and the US in a pateiru-
ler activity..
(U)The direct cost methodology builds to a total
defense budget by pricing each of its component parte.
This metendelogy not only yields est !tem of total
defense - ending, but it alto pereite analysis ot the
Internal costeasitica of spending by military nervier er
by moor military m'ssion. Et also can assess the tepoct
of major military program', or even alternative force
structures. Finally, because each year's estiloae it
constructed on a co, intent sat of definitions. at v.:-
cats identif!cation ef spending trends in real terra.
(Metre following outline lists the major items as
colder in detail in preparing our estimates:
Force Estimates:
--Order-of-Battle
--units
euera'pment
(quantity/quality)
--Employment
--geographical are.
--reediness conditam
--training and operating practices
--Support
--apare parts
--maintenance
- sing and other facilities
--utilities
--triangle .
lotion
?Comaand, Control 'cd Communica,tiona
!reduction Retimateee
-*Plant Capacities
--product type
?-production ratet
--lesource eaguirementa
--force Requirements.
--Celt Costa
--estessobegy
a-learning curves
e-productivity increases
--Activity Coets
e-pay eel allot, news
+-maintenance
+-fuel
--training
+-trenspoetation
?Construction
--Sesserch and Develcement
(U)Consideration of the above lime reveals the most
import/int by-product of our procedures. Our methodology
forces a systematic, integrated review of the totelity ..f
Soviet defense activities. This review reveals both gape
in our kW:mileage and iscomeistrneles among iedepeneently
derived and iseividtmlly produced estimates of component
activities. It Ls in the coetext of our eatimetee that
the overall direction and pace of Soviet defense acti-
vities becomee clear.
tellet
on turn now to an area which has been much
eisinderstood and misrepresented, particular, in the
press. last year ma presented an estimate of the ruble
eeete ef. Sevier!. defense ecetvi''.... e-e-e--. 'ereel
which was cubstanttally higher than our previous judge
meets. be raised our estimate became* we discovered that
we had medarestleated the established prices of Soviet
defense eaods. This tmderestimation was due to lack of
information about the price inflation that occurred in
the Soviet defense indeetries in the 1960s ant about tee
magnitude of cherue in pricing policies for defense goods
that toot place in the 1967 price refers. The incomme
in our rible estimate. ,did not change our perception of
the eweeltude of Soviet defense activitiee or of Soviet
military capabilities.
(S)Cux detailed estimates of order-of-hate.e. milts
tary protection, technological meabilit'ea, ane the
other cheracteristtce outlined above aer., not alt:red
(other than to - -fleet relatively miser change, ahich
always aircurqh annual revisions as the result of im-
proved information). Our estimates ef the dolls' costs
.i Soviet defense activities did not charge. We had.
over the years, gathered throegh Comint a e other scurces
various price data GA Soviet military goods. We now know
that, in 1967 the Soviets made massive adjustments in
their established priers for ailltary goods to bring
theme prioes more in line with the actual costa of these
goods. It took us ? number of years, however, to gather
enough peat reform prices to reeo-nine the magnitude of
LI.. adjustments. Similarly, it W_A only recently we
obtained ;event, information to grew the degree of Soviet
ieflatimt. Although we axe continueng to collect and
analyse additional information on Soviet priors we are
reasonably confident in cur current understanding.
Should dm Soviets institute another major price reform.
however, it will take us Oeme time te discover its extent.
Even so, one should understand from tee above discussion
that the particular prices the Soviets assign to defense
goods are but a small if important part of esteakting the
eeets of eyelet defense Activitieu.
32
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Now'
'NUMB
MILITARY ECONOMIC ANALYSIS ? THE EEY TO FNALUATINC MILITARY ACTIVI nes te)
Other Topics in Military Sconesic Analysis
Oilllyere are many other important topics in mdli-
tary economics that I will not have time to discuss in
detail, but on which we are devoting significant effort.
Three of these are military price indict/S. the "index
number problem of international comesrirons, and the
valuetion of military inventories.
ilflOne of the more useful applications of our
dollar cost eetimetes is to compere the dollar coats of
Soviet defense Activities with the dollar costs of US
defense activities. Among other thInge. such a compari-
son requires converting dollars reported intim US rive
Year Defense Program (FITP) to constant cd 'Dirs. Con-
stent dollar figures are used so that trends in costs
reflect changes in military forces and activities rather
than the effects of inflation. Because the effects of
inflation are different in the various defense industries
and the defense product mix is different then the civi-
lian product Mix, there are no 'off the shelf' price
indices to use. Instead we construct out own axial rOitis
from the Departments of Defense, tabor and Coemerce.
Dec indices combine hundreds of individual tire series
to provide aggregate price indices for each defense
appropriation tcoourt.
(011ie 'index number' problem refers to a basic
measurement problem common to all internetionl economic
comparisons. When we compere US costs we tend to over-
we' ht the Soviet activities. If the Soviet decision-
maker's were confroeted with the US dollar price
structure rather than their ruble structure, they wotld
undoubtedly choose a different and cheaper (in dollar
terns) mix of manpower and equipment. Similarly a a --
Oiriann in ruble terme Mnnld tnnA to o...erWeilb, the 01
activities. There is no 'true" comparison, because any
comperison must be in a common denominator, but the
price structures of the two countries are different. r."4
degree of ovarweighting thus cannot be precisely quenti-
tied.
MA* sr. example of this indox numbei preblee, the
coot of Soviet defense activities in 1076 is about 1.4
times that of US activitier in 1976 when both axe
33
Aftrassmeamuwaomsowas.41.1r60149?112t0
measured in dealers 41975 priced). When meeee.red tn
rubles the ratio is about 1.25. tee 1.4 figure over-
weights the Soviets, the 1.23 figure overweight, the US._
Whatever the degree of overweighting L. either figure it
e ,s not oppeer large enough to alter our basic conclue
aeon that Sottiet military activities overall have been
growing for the pest decode and correctly are signifi-
cantly larger than those of the US.
OM* US budgets and our estimates of the (Mete of
Soviet defenso activities measure only the ennuel 'flows"
to operate and meintein current forces and to add new
forces. nem: annual flows can be quite mislteding if
they are considered out of the context of existing inven-
toriee or out of the context of long term trends. We are
writing ? waiter of pavers which discuss the valuation of
existing inveetcries for specific forces. There are many
coneertual problems involved. Because there is no free
market for mart used military equipment it :s difficult
to assign. say. le dollar valiesticn to a ten year "Id
destroyer. lie concept we are now using for abese case
is to calculate the replacement costs for a piece of
egelpment. regaretess of its appie. The the velar of the
ten year eld desert-rev would be the cost of constructing
a new destroyer v. cit the characteristics of the old one.
SUSIMNItT
I have briefly described $01Pie of the majorectivi-
ties we cover in our military *commie analysis. Tine
his not permitted going into detail or ? description of
the operation. reseeedi tools we use. The field is a
cballervAre3 ore, full .of theoretical end practical diffi-
culties. tease problems remain to be solved. deny uncer-
tomtits resale to be understood and quantified. ten so
our product hes been widely used end of considerable
value in endeistending Soviet defense activities. I
Zinely believe there ix no mere demanding area today
!of military operations rese.reh than that of military
economles, and perhap? for at bleat the next decade nn
more important area.
El
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SfiRET
)77& 4177r2
OPERATIONS RESEARCH IN THE INTELLIGENCE
COMMUNITY - AN OVERVIEW (U)
(THIS PAPER IS SECRET)
Central Intelligence Agency
INTRODUCTION
(U) I be:van to track down pockets of
OR in the intellegence community, /
discovered that considerably more components
and analysts were Applying OR techniques to
their work than I previously believed. Even
more analysts were using an OR approach
although they didn't always realize it.
Be use of this discovery, my view of what
OR is and how it began deals primarily with
the CIA. I apologize to those that may 'have
been slighted in this brief review.
DeVELOPMENT OF OPERATIONS RESEARCH IN THE CIA
caily applaCati6ns of OR
in the CIA was the development of a set of
methodologies to assist in the evaluation of
intelligence collection priorities. The
approach was taupe weapon allocation
techniques to examine expected fatalities
under various forces and intelligence levels.
The analysis provided insights into the
importance Of acquering more precise knowledge
of certain force attributes e.g., how
important it ir to find all the Soviet ICBM
coeplexes. Thes effort led to the develop:reit
of the areeeel exchange model, which in due
courep found Li way to the sfice of
Strateg; Research.
(S) OSR was directed nut to do "net
emseeiment", by the DC/, Slins, ne. the AEA
was used to examine hew the Sovists might
perceive the steategic balance of forces
between themselves and the US. This model
was particularly valuable in helping us to
understand the implication', of alternative
force projections. However, little of this
product found its way into publirhed report
on National Intelligence Estimates.
(S) intereet grew in quantitative
analysin when Schleeieger began his Tee at
the agency. Reorganization options studied
under Dr. Schlesinger and implementel by
ler. Colby, created an organization in OSR tu,
among other things, apply quantitative
analysis to etrategic problenm. This new
organization continued to make alternative
projections of Soviet strategic forces, and
compare them with US programmed forces. These
comparisons were, at first, simple static
measure., e.g., counts of delivery vehicles,
warheads. The kinds of comparisons soon
included relative capabilities to cleatroy
opposing force targets, initially using only
best estieetes of system characteristics.
The analysis soon began to consider the amount
of uncerteinty in our understanding of these
characterirtics and efforts beget: to explore,
the implications of this unceetaenty.
(e) rop we, and our customers, were
comfortable with these kinds of analyses, we
began to look at the effectiveness of entire
forces. fr, do thisrwo used optimal weapon
allocators that combined alternative estimates
of numbers of weapons, weapon and target
characterietics, and scenarios. After several
years, thin kind of anaeysis for strategic
forces beceme Well accepted by producers and
consumers of national intelligence. And 1.w,
agency analysts are beginning to move more
and more into the s le type of quantitative
analysis cu theater ground and air forces,
naval and Mobility forces, and command,
control are communications.
(U) The eiforts are coetin-e.n4 within the
agency to better understand the nature of the
fecces and their effectiveness, !.t within
some political zed ecoeomic coetext. Our
political enalyeers were led into
'quantitatrve ways by DCI Colby, when he
charged the two components doing political
analysis to establish small staffs to
experiment with methodologies used by industry
and the academic community. Througn another
reorganization, these staffs were combined in
the Office of Pegional and Political Analysis
(ORPA) with largely the same chapter. The
early effoets of this group benefits, greatly
froze Colby's personal support, as the simple
statement that the Director liked this work
opened menv dors-and minds. The initial
attitude re' many political analysts typically
ranged fro.. skepticism to hostility. Equally
typical, beeever, has been their poat-project
appraisal thatthsvork war interesting and
MIXIM. St CLAM e443RMATIO14
4Wria7-4 tlizincw :;41444 11. C4-4,01 ttormikma
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OPERATIONS RESEARCH IN Ti It IVIELLIGENCE COMMUNITY - AN OVERVIEW (U)
well worth doing. Some of the most useful.
analytical techniques have been these whieh
help to trace the logical consequence,' of
subjective judgments, force an analyst to
make assumptions explicit, or help organize
compleeity.
(S) The agency ha;; grown increasingly
interested in providing new methodologies for
its analysts. One token of this interest is
a program within our Office of Research and
Development (ORD), designed to encourage end
support a variety of new approaches to
analysis. ORD has sponsored conferences on
military, political and economic matters with
a mind to reviewing the existing way of
doing things and suggesting better, or
different ways to do them in the future. Many
agency componente have benefited from ORD 's
efforts. OSR hate received new methodologiea
that examine different Aspects of force
effectiveness in different wayr, as well as
the implementation of statistical methods to
enable our oeder of battle analysts to better
understand the large amounts of data that they
receive. The Office of Weapons Intelligence
(Owl) has similarly turned to ORD for
assistance in developing their understanding
of missile throw-weight.
WHAT METHODOLOGIES AND TECHNIODESAM WE Olisaa
(U) There exists a wide varfiTirof
methodologies and techaiques in the agency
and they are being applied to .11 phaaa tr
the intelligence process. They range from
massive store houses of data to emaller,
analytical data. bases used to feed analyticei
routinee that count numbers of things or
compute defense costs; 4alieoptimal weeper
allocators to detailed u etions of wearet
and target interactions( and from subjeetivi,
to statistical probability methods.
(U) There are examp'.s of each of theae
that could be discussed detail. You will
hear several or them in later presentatioes
7 will briefly Mention some others.
OPERATIONS RESZAROk AND COLLECTION
ark OR techniiltee are being applial to
help manage collectisn resources, ens; ng
t: at the many differ4ot kinds of requirements
by as many different ;Ands of users are
satisfied, all within a finite collection
budget. For example, the process of
targetting imaging satellites begins with
analysts requesting that certain targets
be considered for coverage. The reqtiremeats
of CIA analysts are gathered together with
those of other agencies and reviewed by a
committee of representatives from each of
the intelligence community agencies. Each
representative votes for the targets that
his agency wishes to have covered and attaehaa
a priority to each target. This reviaw And
voting is currently done manually, but thee*
are plane for each agency representative to
haae a computer terminal and register his
choices in that manner.
5i5
(5) The votes are tabulated and a target
list is issued, ranking all targets by a
'score' which reflects the measure of
importance to the commenity. This list
thentecomes the 'mission objective' which,
along with satellite geometry and weather,
is an input to an optimizing program which
selects the lession profile that achieves
the highest seer's, i.e., satisfies the most
numbef of requirements end priorities. These
collection activities generally result in
massive amounts of information which must be
sorted, catalogued, and etored in easily
retreivable ways if it is to be el use to the
analyet. The data management problem has
been attacked by many organizations and in
many different ways--some successful, some
not. One proposal by analysts at the
leetional Photographic Interpretation Center
(NPIC) is the development of a program that
subjects the data in the community imagery
data base to a preliminary review. This
'preprocessing' step would permit an analyst
to -etreive only that data that met some
pre-eetablished criteria, thereby reducing
the amount of irrelevant data confronting
the analyst. An important application
of this 'preprocessor' would be to serve
.he indications and warnina community as an
alerting mechanism, where eignificant
deviations from the normal obeervations are
reported. The 'preprocessor' can only be
of value, however, if to. analyst has
tanlfh'eaaa that bla aaitaala have braca
propeala defined.
DELPIU TECRA/Q02 TO 11,lSEF:S SOVIET NAVAL
KIWION PRIORITIES 'teat? I)"
(U) At a recent naval conference which
some of our people attended, a number of
dalegetes asked or an assessment of the
priority of the various missions of the
Scenes* Navy. They felt that finer distina-
i?one among missions were needed than simply
'strategic attack' and 'general purpos,-.
There was sufficient interest and support
t-? about 30 of the delegatea joined
together in an attempt to develop a way LG
answer such questions.
It was anticipated teat the m'ain.
stumbling block would be the lack of
agreement on how to apportion individual,
multipurpose naval platforms among a variety
of mitsiona. To try to avoid that obstacle,
it war decided to begin this project by
tryint, to obtain consensus on the division
of naval platform' according to their
missiene. The tcml chosen for this task was
the Di. hi Technique.
(U) The Delphi Techalque required the
30 exports to mnsider the views of their
peers in an environment free from the biases
causal, by personalities--in this ease a
eerier of questionnaire.. Peer views
(expreased as numerical values) wee's fed back
to eath expert in terms of the median
reepeeee and the interquartile range (IQR)
25X1
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%awl
25X1
BUMMED
OPERATIONS RESEARCH IN 'THE INTELLIGENCE COMMUNITY AN OVERVIEW (U)
of the responses. (The median is the middle
answer in a series of responses; the IQR it
the interval containing the middle SO percent
of the responses.) On each round of the
Delphi, each participant was given an
opportunity to reconsider aed change his
earlier response in light of the viewi of
his peers.
(U) The first questionnaire asked for
opinions on the wartime missions of 24
classes and seven general types of platforms
built for the Soviet Navy since 1960, and it
gave the experts nine missions to consider in
their deliberations. Missions were selected
if there was direct evidence for them or if
they were commonly attributed to the Soviet
Navy.
(U) The second questionnaire provided
participants with the results of the first
round, including their answers, and invited
them to reconsider their first opinions and
to change any that they seshed. It did not
include a mission for a p .tforM if the
median, first-round response was five percent
or less. It omitted two platforms, SSBNa
and landing craft, because agreement on their
wartime missions was ereibited in the first
round.
- (U) Questionnaire number three presented
the results of roune two and asked the
participants to reconsider their second-round
responses and to change any twit they wished.
(U) The Delphi was terminated after the
third round of questionnaires, and the
_median responses in that round were accepted
as the expert consensus of mission weights.
(U) To obtain naval mission priorfsies,
the Delphi deri,sd mission weights were
applied to production figures and estimated
prices for each platform The resulting
values were then, ageregeted by mission for
each year between 1961 and 1976. Based an
estimated ruble outlays rer naval platforms,
Soeiet naval priorities esnce 1971 have
been ns follows:
2
3
4
6
7
B
9
Mis it'
gfietegic Attack
Open-Ocean ikSw
Open-Ocean Antiship
Coastal Defense
Mine Warfare
Reconnaissance
Amphibious Warfare
interdiction of F
Linos ! Coni, .tin
(SLOC)
Fleet Air Defense
(U) Based on equivalent numbers of
platforms acquires for each mission,
priorities for 15 and 1976 were as follows:
Priorite Kiseion
UsWkiVTY Defense
5/
2
3
6
7
9
Amphibious Warfare
Mine Warfare
Reconnaissance
Open-Ocean Antiship
Fleet Air Defense
Open-Ocean ASW
Strategic Attack
.sterdiction of SLOC
(U) If prosections of Soviet acquisitions
of new naval platforms for 1977 and 1978 are
accurate, these priorities will remain the
same over the next two years. Generally,
the participant; felt that she project
provided a useful way for teamining the
coAponent missions of the Soviet Navy, and
may in the future open the Soviet Navy to
valuable new insights.
BAYESIAN ANALYSIS *(Note 7)"
(0) Bayesian analysis applies probability
estimate., to as intelligence problem. After
the problem is formulated and reduced to a
set of possible future events, the analyst
estimates the probability of each of these
future events. He then selects relevant items
of evidence, and estimates the probability
that each item af evidence would become
available if eaeh possible future event were
going to occur. These estimates are
aggregated usine the statistical rule of
Hayes to arrive at revised probabilities for
each of the poseible future events.
(U) There ere a number of advantagea to
this technique. Because of its rigorons
mathematical preperties, it often move. the
probabilities fester and farther than the
analyst would bs, willing to do subjectively.
In other wards, the statistical procedure
compensates for a natural time lag in the
analyst's intuitive revision of probabilities
as events t solve OVt'r time. /t also
partially ccespei,sates for a human tendency
to fit existing evidence into preconceived
explan dons. ehe technique has been used
to investigate .he likelihood of heetilities
(Vietn sae, SbAo-So,"at, and Arab-leraeli)
as well as the probe lity that the Chinese
are empeasiaine one or more type of missile
devt,ilopment_
(U) The meet analyses have generelly
been group projects but the Chineee missile
study cam carri&A oat in one afternoon by
two enalysts, sect the results were distributed
to interested perties by xerox copy. When a
larger group is involved, the procedure has
the added advaneage of providing a lerger
base of evidence', from vasious fields for
the analysis.
VelseeN6B zrrau.scaism AGenCY
in all of this.
The Directorate of Estimates in D/A has
erowireg effort -to use OR in support of their
projections and analysis of foreign nilitery
threats. Boma of the activities with which
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ritIUSSIFIEll
OPERATIONS RESEARCH IN THE INTELLIGENCF. cnmmuNtry - AN OVERVIEW (U)
they are concerned involve: developing better
ways to understand and describe the uncertain-
ties contained in their projections of
foreign forces; subjecting past projections to
statistical analysis that may identify causes
of errors and load to better future projec-
tions; and developing new m,-hodologies,
along with upgrading the me...odological
capabilities of analysts in the estimates
directorate as well as the other substantive
directorates.
WHAT HAPPENS NOW?
(U) It seems clear that the success of
operations research in intelligence analysis
requires more than the highly developed
skills of agency practitioners. Doing the
analysis is only a small part of the task:
the other part is to understand the concerns
of our managers and customers--Aany of whom
have never exoerienCed this kind of analysis.
or what they believe to be that kind of
58
analysis". We have to demonstrate that an
OR approach makes the problem more under-
standable, and hence more solvable, and
enhancet the quality of our product.
NOTES
1. Claude R. Thorpe, CIA, "Mission
Priorities of the $oviet navi,," paper
presented to the CANuKUS Soviet Maritime
Intelligance conference, Washington, D.C.,
March, 1977; and the Update on Soviet Naval
Developments Conference, Washington, D.C.,
June, 1977, sponsored jointly by the
Dalhousie University and the Carnegie
Endowment for International Peace.
2. Richards J. Heuer, Jr., CIA,
"Adapting Academic Methods and Models to
Governmental Reeds: The CIA Experience,"
paper presented to the 18th Annual Convention
of the International Studies Association,
St. Louis, Missouri, March, 1977.
25X1
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?
8RCRET
NOT RELEASA LE TO FOR Elf
GN NATIONALS
THE INFLUENCE OF FUTI_IRE Rf
AND ISOURCE CONSTRAINTS
ECONOMIC TRENDS ON THE AI:;: FO1
.RCE MANPOWER PROGRAM (U)
Ants CAVER IS
Ntt:JOFt David I'
1
451 'pie. Future kit ce structur, of the 14
ridtaedthe assumption that sUilirienti
2;q71,oln aft% re.tenthri?. n?, 4,samvt,?,4 ir Force, in weapons systems and manpower,
resource& will he made available to fund their
pertence. aopeai I unreilistic, based upon historical es-
,
;s) letiatt,:,,;??econnnitt ectistitsir the;
'nave ce,nsilerahle rw 4,4". FF44 tact of it. pal increases and budget limitations
Additiorrally, Congret.s04..44" 7rce a ability tt rnaiittatti required prcgrams.
(ion of these prorrants. -- LAF policy chata,es can alter the basic corrpast-
I,ohmano
CT
(S) The basic purpose di the wiper gaanidatiyels pr.itikt the !mime,
economic influer co and penr`v c.art n the Air Fort, matipoirrr program. and thus to
measure the potential impact on she ad adons systems force Strirture.
St 't he paper crmtain., a ot9.eris4 ot the on-eject-Inn mbdet built to accomplish
these ferecasts. Some of the kcs- ,artabrea nsidered in the mode/ are infla-
tion rates, pay raises, and the rttltee itkiputatton, gorril of Ow ocniey variables ',smith can
be comiidereil are the eniiined L,r arur leas.lated iris ctievet ...its. and trends tri the
size and COMpeRRI(111 01 the tests- tfe,es
(S) he model's amlitv tu tia tie a.uta IsNllotheakzed manpower force structure ts also
describe t.
45; The result of usinc the Vti,:pi to foyer-est resou-7 ces in the FY 1.916-81
planning horizon and the rtsuttltql 3a.j nti the fe.rce structure are presented. The model
credit-is that, even under the ince4t4itiitatsie of realistic circumstances, slimificant
hacks in in either manpower and;rot weapons dr-sterna will ;ie required throughout the planning
horizon.
(Si Asks presented are conii0 ta?na of ?.e manpower sri...cture and :tit ntis 01 other
allied Air Forces and a descriptive lusairsis of the workings of similar economic forces
on the Soviet Air Forces.
PRIALM
"it -we ar, tC atiadt:so
,.,11.riten7:K7e 01 4E41 -
lc
1 wt ult? st4:6-
iro UP Crr1,10
rata:4- thin b.,!lune
..,Qtalized o. tt,
L the C...tyr soci..roce
I atov..'
114
SEC
icC..L.ves S. chlts:erier
2:2 uti..ry :57S, Pefzee the
t.,,ro.1?..1.1b of fie., t...ak
. hst.Nt ontot M.Trol-l?e, a Mx,-
NA, i 1!?tlitt-: tfut t7C+.XX3 -
C, re an ort rsi,ard t.i.ae of t.iir U. S.
I. 3 7. 51.701f hur-ti? 1..fit tf,.r.lt to
c. . There e , t MA; tty td
?? ? ? ?i ? C- a (-tor OF t 7r.
^ lc... ' P.
',I.: 0 rEI t ti :73.11
kstkt-
-YVARNitvG NOME hi.S1SiTIVE
N1Ett../.1Eis4e. SC?oRCES AND
71:005 ft,/VOLV'.:D"
/fit/
ILLEGIB
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,
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UNCLP c
THE INFLUENCE 0} _
TRENDS ON THE Ail Prt
v./
(U)7 analysis mancentrated try the usrect f re-
enurce constzaints and ,tx.xxclmic influenom in the five
Year Defel,se Plan (FYUP) planning horizon. tirdi+tions
in this time period were defend to be of the IrtaSt YalUe
to current decisions. In a shorter tire frame. t...e
analytical estimates are probably not as accurate baa the
monitoring of Crsqressirnal armittee and (#43 act s.
In a laer tine frame, the economic predicticsis ter:tste
100J?
983 933
"3
ac.1
165
ilFIED
2E CONSTIAINTS AND ECCNOMIC
ER PROGRAM ZU)?D. P. Lohmann
so ix precise as to make the estulates of little value.
(FD90)The c-urrent practice is to mare that
resource tvailability will be relatively stable through-
out t 1&ifli rizxt. M shoal in Figure la the
Air Force is prcgraerning a level menpodes program, frets
ri-76 ttsigh k-81.
ACTIVE FORCE M,HPOWER PROGRAM
JAN /5 Pa0P tFiSIDINT'S BUDGEll
ZOO-
74
THIS FraiaRE ,,NCLASSIFTEr,
_7
11511 eY
al.
TIAt
YRIIARY
7,1 :12
71?1 IAN
,
,
/0
// 18
(U)rre reasonableness of this straigh,l;
cfiest ionab/e basasi uprin an essnination t ?
stcr Waal FDP projecticris in retrom (et I
illustrates that every one of the rec,..eit rU4'. 2
l'SCAL YEAH
Figure 1
113
straient lired and c?ery one of ....sr. has been at a
lesser resource than its predecessor.
sore ei)or int luen,..e is not Ler.; acc,eately captured in
th.. Fyn, process.
CLASSIFIED
u *
?t,
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V&*War
am**
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UNCLASSIFIPD
THE INFLUENCE OF FITURE RESOURri COle.5TRAINTS AND ECONOMIC
TRENDS ON THE AIR FORCE MANPOWER PRpGRA.BA on?DP. Lohmann
MANPOWER
1000s I
AF TOTAL MANPOWFX ipROGRAM
BY FYDP
!
2
0
BUDGET I-
HISTORICAL OPERATit.
YEAR YEAR YEAR
THIS iGuRS. IS UNCLASSIFIED
(UI It has Is contended that the iJA phavelywn
res u.,oredictable and Aid is the major cause of error.
The phasedown. however. is now compleme and error ratet.
should have returned to their old levels. As shorn in
Figure 3. harever, the rate is growing -- not
getting smeller. It is contemded in this papei that
the major cause of the forecast errors ic the inability
to specify the impact of econanic conditions cn resouo,
availability.
11,;
- **AIDS; YEARS ??1
deterainatione. usually cuts tile the
-r,trol or the resour.vmeiwer, can cause serious sutm
,o? fore:ist errors. L.1
rtnbably etp:ore rr rat. ion% ?' t
Itc-,t-artrrt".t , ###.- es' #.1,1 ?? #
Flgure 6 attrxeet tho ve_Liei's len:elect Lon ut the tatiwt. #
7
- 2.1
t
tt.Ar???? ? d. t- r, .1., LI
t ? II of '1,4 t the issilet
.3, -1) 4 t.t.ft balw't .
NON-MANPCPIER BUDGET IMPACT
CONSITIA,NED AF BUDGET
Nit a- ER ES CALATICII4
1144 FIGURE IS UVCI.A.SSif D
I
UNCLASSIFIED
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Declassified in Part - Sanitized Copy Approved for Release 2012/09/04: CIA-RDP85B00236R000100090002-3 ?????'"
THE INFLUENCE OF FUTURE RESOURCE c(INSTRAINTS A/4D ECONOMIC
TRENDS ON THE AIR FORCE ,.fikuPowER plOGRA'tt (13)?D. P. Lohmann
(S) Th avoui both conaequercea, niartower
ire.astrarit lettlfram. rethrticata. re.aorea a oruuu..
budjet. The requironant to fe.-et ? e sier ???????7
gr al and to retain V* turctia.sInf 16.0.4' of ti.3I, 'a f-e-
riefe..ohner LIAkirt 111 6:17Ari 1.71 71 Aire 7, The npt ur
/Midget Isl?strod In FY 81 i.kettld ta S32.7 taints: 't
ahould he tutel that the non-re.Lptecr ba'aiet ui true
case does rot Include ptccurerwrit of mar ramp,. owattala
BU
?how thu caererrt rata. The currerit F'037 AZForce
uroesttect incl_diN the A-I0, 1-16 we!
nt. 1.1-,777Strits17, rates cunalderatly
io cerr?e, levels. The b....ymita fix the programa
fesee t. be extended to FY 88 +J.-614'jug option.
rr../^r the 14...v1cus ,ase of A fl.,ca.1 uweit -
wit ...Ian ce.h.1 rot be 1.114,177:1717. Iti any cure frame.
BUDGET PROJECTIONS
OF FYDP MANPrWER PROGRAM
??.?
27.0
14 .8
"r1.1
CROSS
,
75
7771S FIGI?At iSUPECL.t.,Sis:s0
TC
l':7"-7-1,C7A71
- YrArs :v7:: Si r:., Ak. ?
r'17 irAis ?siti s-s* s 7.?eis L11 ?
reaareithle irkr Assisi 11.,s. :.?,,s; ? is.
/11,11.11 1(1 t?tiiI tat' tit 10.3( t
Si, ess7,:ais:r `1.7'.17A1 t1A? . ?
??-s :???? Iv tA,-1 Ars
tzw-se nut xls t f?-?y?
"14 07 .1274,17.si.A1 77.7,-?? crr ...is ?
a t,?-?tal ."( rt. 4-101 is 7/., 1.7.?
. _t 31 11
utri ig--rcter^ r.cs ,r-fe.. ? ?,
to Lie [...ail-stet! Arsauriisrices trs?
36.7
32.7
1.2
us-. 5. ztr r`ttrr t)nr ? ot trzyrrir lc I
- ii11-11 Air le:,c .4:n-drakes liable Cal-
?r. t..-t. sf --Jr..,an, ca.- bu
1 - figs." ri Irs-r7",.. 17 it ..77/r7....hle-
s??., 1.16. ?s?-? -V r,a 'railer hat r..".re
h.: .... s???inAt 1 rs. threw, t
- 1, : $ ALT
s s,, -t .4, r 11117y tiC.
. -is ortrit-Ar1V4 dile is-rxs_A-
' i- ? A ?, 7:sr._ triat 07 CAA r.77.7S-1
? i?-?1 ,S.1r r is! rv-r- r .-t In tht? Firrre,
? - -? A?r )1,,,t, aro to Plc; ?sir $tratek31c IkStaCt
',sr.; RI X,,a? rry-setal Tra.-et.,rt
I-Si 7-7 7...7S? HI-1,111.A1 I, r,ters. an.3 Cre.trui.
a ? r At. : tat. Conti'
.2 T, (5(.. ies Are A-1. 1-C1 Slat
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Declassified in Part - Sanitized Copy Approved for Release 2012/09/04: CIA-RDP85B00236R000100090002-3
ts
10C.%
50'
'E
THE INFLUENCE OF FUTURE CONSTRALNTS AND ECONOMIC
RESOURc
VER PROGRAM IU}-D. P. Lotirnann
TRENDS ON THE AIR FORCE mANPC"
SECRE
IMPACT 0:: ECC
MOMIC FORCES
S. AND USSR
U.
AT CONSTANT MANPOWFR tEL/F1 S
% OF BUDGET DEVO1FD
10 WEAPONS SYSliMS
75.N.
LINIMOMIIR .N.,1%.4113111IIII????????????
19/5
Taps r4OtiftE IS SECRET
f'^.1-sest 1.1.-ta cm the Soviet firocre
not prolictions of actual oitctiretanca's.
taw, purioses, the graph on the left in H s -I
cre.stestit nanioser fcr1. Tw -r.tfi cs1 rt. I' till
altarnatively,a constant iseafres ovate. fr.11-
roa.-4_nwin- exissnditure rate. In aSlition,
/* elts-ie that in the Soviet i.larred t:..2
tion is controlLable and that the SE-,x,' 1 w
ctertinue to rant pay raises of 2.5 pert er.t ?ar t.,
their ralitary.
'S-'41t 1t struid f Toted that Vero
e.,--Ixrce that solitary prof:sea are sef ICIas t
L' f.s...fiet 00,1ttlrlIC asnetraints. This retartlae 'Ns -
stinsitivity of Soviet defense experstitus.-0 -%i se
noissanfc conditions sets alto rotei ry or.% alai ItVsse.
(httte "xl, That. Is to say, hourver, thit ctir-tt
roy tx-S crittete for defarise tes.s:rocsi in 1211. .t
eppor;,,nIty ^,,AIof IAINO, 1.0 jr) 111U: .p.!t ??,*
And tir cE4xatunity it of industria. fleot,-610-
qii:7_34steity May in Us: f.."rise ^stssate ter., ?t
aractratnts on the .f.cviet defense estardisfSsor..
ever. L.-ere is no CVICkl'a C that O%OtUfltt tAt ao. ?
groat anfIlYT1Ce 12/ wlet decision "wilting (N.,t'e
Wert ra.-oit est Lnates. ptosec-t Irt-rba
expecrlit,ges for tic ,,aviets (5-5 ix-roeqt per or
cord tti, v.h..,oh cause* IJ, vt& it: !et- St swear
t!s?I.tF aid the Soviet' Aar i',"fc -pti. ie rev rr
Tfe-ttfore, the ability of the h# ? 41.0ui
AT CONSTANT WEAPONS
SYSTEMS EXPENDITURES
.r??
MILITARY
MANPOWER IOW'S!
ammernoto
1
USSR
Us
fax-ate aril ...tvitAin greater quantltics Osositris and
:-iinicre is
f..f.r..scoktt ion of the irsact of six-liar ecosedo
tprees the aolenre lostares if,ltrwr uesterf ccuntr
r?-???,-.11$ thst meter if them face cirocsastarc,fs simalar
to In, I,ttect t,stes. exariple, in recent years the
it I, rat.- tiss escx.s.kai tL ir,seth in ,.ef arise .41.,efx.l.
int; in since. Italy, fa eat Britian, Canada and Japer,.
In West erreir-, nnseth in defense sciendirs; has excrasical
trio Ann it Ian tat... ha.,...ert, rsisiptser costs haw risen
bly r tho, tio.1 Ltia*S...1.VVSin
ni1tt..ocss s,.-1111y CVAISCrd LIled C1TCUSIst..**"1.11.
I -u..terted Sr tit rellerK. forces:
I ran:, PO* ti u mpti,sis