How Errors in Component Reliability Affect System Reliability.

This paper studies how sampling variation in component reliability estimates affects the computation of system reliability that uses these estimates as input. Results show that relative bias in system reliability grows quadratically with the number of components for which each component reliability estimate is used whereas the corresponding coefficient of variation grows linearly with this number of components. If these components are in parallel they lead to an understatement of system reliability. In series, they lead to an overstatement. The paper describes resampling schemes that eliminate bias without increasing the dominant variance term. Keywords operations research systems analysis statistical accuracy.