Background and Theory Behind the Compensation, Accessions, by John A. Ausink

By John A. Ausink

The Excel-based repayment, Accessions, and body of workers administration version software program package deal permits analysts to review the capability results of body of workers coverage switch on destiny enlisted inventories within the army companies.

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Extra resources for Background and Theory Behind the Compensation, Accessions, and Personnel Management (CAPM) Model

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1) ) U t + 1 = max U tS+ 1 , U tL+1 . This simply says that if a person stays, he or she will earn the “staying” military wage, receive the monetary equivalent of the “taste” value, accept the monetary value of the random “shock,” and receive the discounted expected value of the best decision next year. If he leaves, he will receive the wage from the new job until he is required to leave the work force altogether. 4 At any time, the correct decision is to choose the option with the maximum utility, so to decide what to do, the individual compares the utility of staying with the utility of leaving: U tS − U tL = ε tS + γ + wtS − wtL (t) − T +1 ∑ τ = t +1 β τ − t wtL (τ ) + βEt (U t +1 ).

4 At any time, the correct decision is to choose the option with the maximum utility, so to decide what to do, the individual compares the utility of staying with the utility of leaving: U tS − U tL = ε tS + γ + wtS − wtL (t) − T +1 ∑ τ = t +1 β τ − t wtL (τ ) + βEt (U t +1 ). 3) where 3The taste values follow an extreme value distribution with a location and scale parameter that are the same for all cohorts. The random shocks are distributed normally with zero mean and variance σε. 4Gotz and McCall used a more sophisticated setup for wages received from staying in the military.

4Coefficients for the equation used in this calculation were estimated by the SAG Corporation (Mackin, 1996), and the values of the coefficients are in the CAPM users’ guide, MR-1668-AF/OSD. 1 Sample Display of ACOL Values for Air Force Enlisted Personnel (in dollars) YOS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 E1–3 25,237 26,777 28,528 28,091 27,511 27,523 27,697 26,628 18,404 18,112 E4 E5 Grade E6 27,557 28,701 28,853 29,116 29,655 29,941 30,196 29,364 29,975 30,400 31,048 30,835 30,488 30,521 30,427 30,418 29,729 30,433 31,326 33,180 35,672 39,485 45,229 61,719 83,687 128,835 264,347 31,095 34,203 34,948 34,523 34,159 34,253 34,328 34,223 33,504 33,334 33,993 35,784 38,279 42,191 48,032 65,210 88,247 138,328 295,302 32,889 E7 38,184 37,717 36,767 36,815 37,166 38,971 41,833 45,959 52,266 70,602 95,592 150,482 324,995 25,329 17,457 32,363 12,256 30,810 E8 41,757 41,957 43,868 47,473 51,773 59,084 80,215 108,989 171,304 368,176 30,573 21,982 37,122 15,809 32,513 11,913 39,635 E9 122,825 193,662 417,855 27,667 17,914 31,000 8,651 24,738 3,237 26,423 –4,436 –7,775 –11,120 –11,167 Inventory Projections Once the ACOL values have been determined and continuation rates have been adjusted, the CAPM program projects future inventories for the number of years desired by the user.

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