Probability Methods for Cost Uncertainty Analysis: A Systems Engineering Perspective

Paul R. Garvey

January 3, 2000 by CRC Press
Reference - 424 Pages
ISBN 9780824789664 - CAT# DK9660

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  • Discusses modeling cost uncertainty by the probability formalism and the Monte Carlo simulation method
  • Demonstrates the key role of the central limit theorem in cost uncertainty analysis problems
  • Presents unique statistical distributions not commonly found in the traditional literature, including the trapezoidal distribution, the bivariate normal-lognormal distribution, and the bivariate lognormal distribution
  • Emphasizes the application of joint probability distributions for modeling cost-schedule uncertainty
  • Develops probability distributions for a general form of the software cost-schedule model
  • Illustrates the Mellin transform method for working with cost functions that are products, or quotients, of two or more random variables
  • Summary

    A careful blend of theory and practice, this book presents a comprehensive approach to assessing the impact of unplanned events on the cost of engineering complex systems. It illustrates how probability theory is applied to model, measure, and manage risk in the cost of a systems engineering project. The book contains numerous mathematical and professional anecdotes, case studies, results, observations, and interpretations that clarify the challenges in cost risk analysis. It includes references, equations, and illustrations, provides theoretical and applied exercises, and uses examples and case discussions derived from systems engineering projects to describe key concepts.