Optimal Commercial Satellite Leasing Strategies
Abstract
There is a gap that will extend into the foreseeable future between the military requirement for long-haul wideband communications and communications satellite capacity the military owns. The United States government will need to bridge the gap by leasing commercial communications satellite services. Military communications planners are faced with the difficult task of choosing the appropriate amount of communications capacity to lease, and the appropriate length of the lease, given uncertainty over future communications demand. This report presents a simple, graphical technique to help communications planners determine the appropriate amount of communications capacity to lease when facing uncertain demand. A simple mathematical model shows why the graphical technique works. Extensions to the basic model show how price uncertainty and the ability to salvage unused capacity change the appropriate amount of capacity to lease. Finally, a multiple-period version of the basic model shows how communications planners can consider the trade-offs between long- and short-term leases when demand grows over time.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2002
- Accession Number
- ADA411885
Entities
People
- Michael G. Mattock
Organizations
- RAND Corporation