Probability Methods for Cost Uncertainty Analysis, 2nd Edition

4 Probability Methods for Cost Uncertainty Analysis

Cost uncertainty analysis has its genesis in the eld known as military sys-

tems analysis (Hitch 1955), founded in the 1950s at the RAND Corporation.

Shortly after World War II, military systems analysis evolved as a way to aid

defense planners with long-range decisions on force structure, force compo-

sition, and future theaters of operation. Cost became a critical consideration

in military systems analysis models and decision criteria. However, cost esti-

mates of future military systems, particularly in the early planning phases,

were often signicantly lower than the actual cost or an ...