On the Treatment of Uncertainty in Parametric Costing,
GEORGE WASHINGTON UNIV WASHINGTON D C PROGRAM IN LOGISTICS
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Parametric costing is a generic name used to characterize a set of techniques defining a statistical approach for predicting large scale system costs at an early stage of system design. These techniques have been employed by the Department of Defense, Aerospace and other industries extensively during recent years because the record of cost overruns in acquiring complex systems suggests that the parametric approach is not only useful but perhaps preferred to the industrial engineering or grass roots approach with which it is contrasted. Predictions of cost, however, are not exact and research efforts need to be directed toward quantifying their inherent uncertainty. Previous attempts to characterize uncertainty have often been extremely naive or mathematically incorrect. The major objective of this dissertation is to examine the treatment of uncertainty in parametric costing as an applied problem in operations research.
- Operations Research