Cost-benefit modelling for reliability growth

Research output: Contribution to journalArticle

9 Citations (Scopus)

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.
LanguageEnglish
Pages1234-1241
Number of pages7
JournalJournal of the Operational Research Society
Volume54
Issue number12
DOIs
Publication statusPublished - 2003

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Costs
Cost benefit analysis
Random processes
Product development
Modeling
Cost-benefit
Growth model
Cost analysis
Cost structure
Stochastic processes
Penalty
Decision support
Rationale
Cost-benefit analysis
Trade-offs
Development process

Keywords

  • reliability
  • cost-benefit analysis
  • stochastics
  • statistics
  • management theory

Cite this

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title = "Cost-benefit modelling for reliability growth",
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.",
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Cost-benefit modelling for reliability growth. / Quigley, J.L.; Walls, L.A.

In: Journal of the Operational Research Society, Vol. 54, No. 12, 2003, p. 1234-1241.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Cost-benefit modelling for reliability growth

AU - Quigley, J.L.

AU - Walls, L.A.

PY - 2003

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AB - 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.

KW - reliability

KW - cost-benefit analysis

KW - stochastics

KW - statistics

KW - management theory

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