Market characteristics of a military-industrial complex aircraft

Аuthors

Golubev S. I.

Moscow representative office of Briggs&Stratton AG, 17, Vereiskaya Str., Moscow, 121357, Russia

e-mail: s-golubev@yandex.ru

Abstract

Market characteristics of an aircraft manufactured by military-industrial complex (MIC) are formed by two forces acting in opposite directions. The first force the cost of production is determined in accordance with the classical labor theory. The second force is utility; it characterizes how well the goods satisfy human needs. According to the utility theory, product gets its value through individual assessment of specific consumers. In the analysis the total utility is distinguished from the marginal utility, which is equal to the increment of the total utility when the consumption of goods is increased by one unit. The ideas and approach of the utility theory can be used for evaluating of the aircraft design options. Utility of the aircraft is the purpose and one of the design characteristics of the whole project development process, which is implemented in two stages process: transporting payloads to the area of the target and destroying of the target.
During design process the goal is to develop a new version of exiting aircraft or create completely new previously unavailable vehicle. Concept of technical specifications and basic idea of the project are defined by the knowledge (the human capital). Implementation of the knowledge results in the aircraft new characteristics. It is proposed to consider the combat effectiveness as the utility function of the aircraft and use it to evaluate technical level of design options and range of possible market prices. Assessment of the aircraft utility is based on analysis of its target payoff. It is assumed that during the development stage of the new technology project the feasibility study is based on the hypothesis of proportionality of utility and price.

Keywords:

competitive advantages, utility, design options, prognosis price, market MIC, technical level

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