The Application of Availability to Linear Indifference Contracting.
ARMY MATERIEL COMMAND TEXARKANA TEX INTERN TRAINING CENTER
Pagination or Media Count:
The paper develops the methods necessary for applying both Maintainability and Reliability considerations to an incentive contracting plan that utilizes the concept of indifference. The resulting contracting scheme is applicable to situations where systems costs exhibit a linear relationship to system availability. The plan is such that the contractor is paid according to the availability demonstrated by the equipment during actual field use. Statistical techniques based on both consumers risk and producers risk are used in determining the required number of renewals. A procedure for establishing confidence limits on the purchase price is also derived. Both the cases for known standard deviation and unknown standard deviation are treated. A discussion of some of the factors involved in determining the linear indifference function is also provided. Author
- Administration and Management
- Economics and Cost Analysis