Risk and the Right Model
Abstract
All aspects of life in the world are subject to risk and uncertainty. Risk and uncertainty are key characteristics of any long range planning and cost conditions of any long range planning and cost estimation. Few, if any, decisions are made under conditions of certainty and without risk. Due to the complexities involved, analysts and decision makers must specifically and explicitly address this risk and uncertainty in performing their assigned tasks. Although the terms risk and uncertainty are often used interchangeably, they are not the same. Risk is the probability that a planned event will not be attained within constraints (cost, schedule, performance) by following a specified course of action. It is the task of analysts to try to reduce uncertainty to risk and then to meaningfully convey the risk to decision makers. This document defines risk analysis as a procedure for analyzing how randomness affects the total cost.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1985
- Accession Number
- ADA161757
Entities
People
- John A. Long
Organizations
- Air Force Institute of Technology