ALCAM Revisited: A System Dynamics Framework for Aircraft Life Cycle Costing under Contemporary Acquisition Conditions

The global defense environment has undergone significant transformation since the original development of the Aircraft Life Cycle Cost Analysis Model (ALCAM), marked by great power competition, rapid technological disruption, and supply chain vulnerabilities. This research extends and updates the ALCAM framework to address contemporary defense acquisition challenges by incorporating digital transformation, supply chain resilience, sustainability requirements, and emerging technology integration. The study analyzes three primary procurement strategies: indigenous R&D, technology transfer with co-production, and off-the-shelf acquisition. Utilizing a generic System Dynamics simulation framework, the methodology captures non-linear relationships, feedback loops, and time-dependent variables across the system lifecycle. The enhanced model integrates Machine Learning estimates with simulation models to improve predictive capability and employs an internal numerical risk matrix to quantify uncertainties. Results demonstrate that life cycle cost differentials between procurement strategies have widened substantially due to supply chain vulnerabilities, accelerated technology obsolescence, and sustainment cost escalation. Simulation outcomes reveal that the off-the-shelf option, despite lower initial acquisition costs, projects significantly higher total life cycle costs due to long-term sustainment factors and foreign dependency premiums. The enhanced ALCAM framework provides defense decision-makers with a strategic planning tool that evaluates total ownership cost beyond traditional budgetary considerations, emphasizing the long-term value of indigenous development capabilities and technology sovereignty.