Measuring the Risk of Shortfalls in Air Force Capabilities

Focusing on risk assessment in military contexts, this research explores the U.S. Air Force's Capabilities Review and Risk Assessment (CRRA) process to identify capability shortfalls and associated risks. It examines four specific risk measurement approaches—simple expectation, risk-value measure, tail conditional expectation, and distorted expectation—modeling risk as a non-negative random variable. These measures are then applied to optimize the objective function coefficients in a system acquisition knapsack problem, enhancing decision-making in resource allocation.