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Cost-benefit modelling for reliability growth

Quigley, J.L. and Walls, L.A. (2003) Cost-benefit modelling for reliability growth. Journal of the Operational Research Society, 54 (12). pp. 1234-1241. ISSN 0160-5682

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Abstract

Decisions during the reliability growth development process of engineering equipment involve trade-offs between cost and risk. However slight, there exists a chance an item of equipment will not function as planned during its specified life. Consequently the producer can incur a financial penalty. To date, reliability growth research has focussed on the development of models to estimate the rate of failure from test data. Such models are used to support decisions about the effectiveness of options to improve reliability. The extension of reliability growth models to incorporate financial costs associated with 'unreliability' is much neglected. In this paper, we extend a Bayesian reliability growth model to include cost analysis. The rationale of the stochastic process underpinning the growth model and the cost structures are described. The ways in which this model can be used to support cost-benefit analysis during product development are discussed and illustrated through a simple case.

Item type: Article
ID code: 4358
Keywords: reliability, cost-benefit analysis, stochastics, statistics, management theory, Management. Industrial Management, Risk Management, Statistics, Management Information Systems, Strategy and Management, Management Science and Operations Research, Marketing
Subjects: Social Sciences > Industries. Land use. Labor > Management. Industrial Management
Social Sciences > Industries. Land use. Labor > Risk Management
Social Sciences > Statistics
Department: Strathclyde Business School > Management Science
Depositing user: Strathprints Administrator
Date deposited: 22 Oct 2007
Last modified: 15 Oct 2017 22:51
URI: https://strathprints.strath.ac.uk/id/eprint/4358
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