"This paper presents an analytic framework that builds from previous work to yield the systematic and defendable readiness analysis that must underlie decisions ranging from budget allocation to force employment and even strategy development. To manage readiness, the Department of Defense must balance the supply and demand of deployable forces around the world. The readiness of an individual unit is the result of a series of time-intensive force generation processes that ultimately combine qualified people, working equipment, and unit training to produce military capabilities suitable for executing the defense strategy. While this discussion is a basic tenet of production theory, it had not been commonly applied to readiness management until recently. The important point here is that understanding how the readiness of military capabilities is generated provides the clearest picture of the current readiness status and whether that status is likely to change over time. Furthermore, it provides the best shot at identifying effective management policies to ensure that DOD can generate the capabilities that the Nation asks of it. This paper argues that traditional unit-level readiness metrics are useful as part of a larger readiness management construct, but by themselves they do not provide enough information to proactively manage strategically. This approach provides a clear explanation of the causes of readiness degradations and options for how to mitigate them that can be traced to precise resource investments"--Page 1.