Considering a Cadre Augmented Army - RAND Corporation

-107- A Budgetary Analysis of Cadre
First, we calculated the peacetime and average long-run cost of each of the baseline
and cadre forces as discussed in the previous sections. Second, we calculated the difference
in cost between each cadre force and its corresponding baseline force. Lastly, we divided the
difference in cost (in all cases- cost savings) by the cost of the corresponding baseline force
to calculate the cost savings of cadre relative to the overall cost of the force. It is worth
noting that all cost estimates are restricted to estimates of personnel and operations and
maintenance (O&M) costs. The actual Army budget in any period of peace or averaged over
periods of peace and war would be significantly larger as it includes other costs such as
research and development and procurement. 132 However, since the cost of a marginal unit in
the force is determined mainly by personnel and O&M costs, restricting our analysis to these
costs is appropriate.
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132 This is especially true for periods of war when the size of the Army budget may increase significantly over
peacetime levels. In this analysis, we assume that the only increase in the baseline personnel and O&M budget
during wartime is the cost of activation (increase from part-time to full-time pay and increase in O&M costs) of
reserve forces.