Accession Number : AD0718862

Title :   Statistical Methods of Measuring the Uncertainty of Cost Estimates.

Descriptive Note : Final rept.,

Corporate Author : ARMY MISSILE COMMAND REDSTONE ARSENAL ALA COST ANALYSIS DIV

Personal Author(s) : Murphy,Edward L. , Jr

Report Date : 26 FEB 1970

Pagination or Media Count : 13

Abstract : The primary need for a cost estimate is for use in a decision-making process. Such processes involve the selection of a single element from a set of greater than one alternative. The set of alternatives may only be whether to acquire a system or not to acquire it -- other sets may include two or more systems which could accomplish the same or similar mission. In every case, however, the purpose of a cost estimate is to form a basis of comparison. Uncertainty analysis can provide the decision maker with information which, when taken in proper context, should improve the rationality of decisions. The purpose of such an analytical methodology is not to improve the precision of an estimate, but to place in perspective the estimated value with respect to various contingencies. (Author)

Descriptors :   (*COSTS, MATHEMATICAL PREDICTION), STATISTICAL ANALYSIS, UNCERTAINTY, DECISION MAKING, PLANNING, COST EFFECTIVENESS, ECONOMICS

Subject Categories : Administration and Management
      Economics and Cost Analysis

Distribution Statement : APPROVED FOR PUBLIC RELEASE