Cost Uncertainty Assessment Methodology: A Critical Overview
Abstract
An appraisal of the quality of methodology and software for performing cost uncertainty analysis will be given. It will be argued that the standard practice of developing a 'most likely cost' and then generating an uncertainty distribution associated with that figure is a consequence of historical precedent and places the cart before the horse. It will also be argued that methodology for encoding subjective probability distributions are out of date, being, for the most part, modifications of the PERT techniques of the sixties. Additionally, methodology for processing elemental uncertainty assessments into uncertainty distributions over higher order structures (e.g. subsystem CER's or total system cost) often ignores important sources of variability, and extent computer software designed to implement cost uncertainty analysis methodology is often poorly written and, in some cases, may lead to conclusions which are inconsistent with the inputs. This is a paper presented at a cost analysis symposium.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1985
- Accession Number
- ADA161920
Entities
People
- K. T. Wallenius
Organizations
- Office of the Secretary of Defense