@article{Park_Lee_2018, title={Procurements (Purchase or R&D) for Ballistic Missile Defense Systems: Focusing on THAAD, SM-3, and L-SAM}, volume={1}, url={https://journal.idap.re.kr/index.php/JAMS/article/view/7}, DOI={10.37944/jams.v1i1.7}, abstractNote={<p>We perform cost analysis for evaluating alternatives to effectively defend the threat of North Korean ballistic missiles. As alternatives, THAAD, SM-3, and L-SAM are considered, and we analyze the factors affecting to the cost of acquiring alternatives depending on the way to procure them, e.g., by purchasing, or research &amp; development (R&amp;D). Assuming that each alternative can be operated for 30 years, the total cost, which consists of acquiring cost, operation/maintenance cost, and R&amp;D cost, is compared using net present value. Furthermore, we perform sensitivity analysis for maintenance rate, terrain cost and increase rate of R&amp;D cost that involve uncertainty for the future. Cost analysis results show that THAAD incurs the highest cost and SM-3 is the most economic alternative. However, sensitivity analysis shows that priority can be changed depending on uncertainty parameters. Although our results do not directly support decision-making on the best alternative due to its various uncertainties, these can provide a guideline on economic evaluation required for public policy decision-making process, especially under the situation that all the three alternatives cannot be acquired at the same time due to the limitation of defense budget.</p> <p>&nbsp;</p>}, number={1}, journal={Journal of Advances in Military Studies}, author={Park, Hyuk-Ki and Lee, Jinho}, year={2018}, month={Sep.}, pages={1-17} }