AoA Case Study: A Variation of Regret Analysis
MITRE CORP COLORADO SPRINGS CO
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Uncertainty can significantly affect a systems cost. Any estimateprediction of a systems cost is accompanied by a range of other potential costs. It is not overly pessimistic to assign at most a 30-percent confidence level to a complex systems cost estimate to account for significant technical and program uncertainties, and the estimation uncertainty itself. A decision-maker must understand the uncertainties and their potential impact while weighing these uncertainties against their cost and his resource constraints. Decision analysis provides a structured approach analyzing and selecting a course of action to achieve an objective where the choices and outcomes are characterized by uncertainty as well as the value tradeoffs. For difficult decisions with careful analysis and hard choices, it is human nature to still wonder if you made the right decision. Regret analysis, a subset of decision analysis, is a basic operations research technique used to determine how much may be lost if a different decision were chosen. Regret occurs when the selected alternative is not the most preferred outcome e.g. the least expensive. This paper illustrates an application of Regret Analysis via a case study using HQ Air Force Space Commands recent Operationally Responsive Spacelift Analysis of Alternatives.
- Operations Research