Implementing Variable Cost Pricing in the Transportation Working Capital Fund
Abstract
During 2020-2021, RAND researchers performed an independent review of the Transportation Working Capital Fund (TWCF) to meet the requirements of Section 1716 of the National Defense Authorization Act for Fiscal Year 2020 (Vasseur et al., 2021). They recommended that the U.S. Transportation Command (USTRANSCOM) implement Variable Cost Pricing for several business lines that are financed by the TWCF. The business and economics literature emphasizes Variable Cost Pricing as the best way to guide customer decision-making to support enterprise objectives. In the Variable Cost Pricing model, customers pay for the costs to the Defense Transportation System (DTS) associated with their requirements (variable costs); other costs should be recovered separately through appropriations or service-level bills. However, the report to Congress did not address how such a cost recovery scheme would be implemented (Vasseur et al., 2021).
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 15, 2021
- Accession Number
- AD1155289
Entities
People
- Ellen M. Pint
- Laura H. Baldwin
- Liam Mclane
- Liam Regan
- Max Steiner
- Michael Vasseur
Organizations
- RAND Corporation