Probability Methods for Cost Uncertainty Analysis: A Systems Engineering Perspective, Second Edition

2nd Edition

Paul R. Garvey, Stephen A. Book, Raymond P. Covert

Chapman and Hall/CRC
Published December 22, 2015
Reference - 502 Pages - 171 B/W Illustrations
ISBN 9781482219753 - CAT# K22171


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  • Presents recently developed methods for cost uncertainty analysis, including the general error regression method (GERM) and enhanced scenario-based method (eSBM)
  • Shows how to incorporate the effect of correlation on measures of cost risk
  • Explains how to present and interpret cost as a probability distribution
  • Provides recommended practices and lessons when performing cost uncertainty analyses
  • Includes many examples that highlight the application of mathematical concepts to real-world systems engineering and cost risk analysis problems
  • Contains a set of theoretical and applied exercises at the end of each chapter


Probability Methods for Cost Uncertainty Analysis: A Systems Engineering Perspective, Second Edition gives you a thorough grounding in the analytical methods needed for modeling and measuring uncertainty in the cost of engineering systems. This includes the treatment of correlation between the cost of system elements, how to present the analysis to decision-makers, and the use of bivariate probability distributions to capture joint interactions between a system’s cost and schedule. Analytical techniques from probability theory are stressed, along with the Monte Carlo simulation method. Numerous examples and case discussions illustrate the practical application of theoretical concepts.

While the original chapters from the first edition remain unchanged, this second edition contains new material focusing on the application of theory to problems encountered in practice. Highlights include the use of GERM to build development and production cost estimating relationships as well as the eSBM, which was developed from a need in the community to offer simplified analytical alternatives to advanced probability-based approaches. The book also lists the major technical works of the late Dr. Stephen A. Book, a mathematician and world-renowned cost analyst whose contributions advanced the theory and practice of cost risk analysis.