January 2016
Intermediate to advanced
524 pages
17h 3m
English
book
Probability Methods for Cost Uncertainty Analysis, 2nd Edition
by Paul R. Garvey, Stephen A. Book, Raymond P. Covert
Content preview from Probability Methods for Cost Uncertainty Analysis, 2nd Edition
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F
Cost
(x)
0.914
0.671
0.315
x
($M)
Cost = X
1
+ X
2
+ X
3
+
…
+ X
n
Probability That Cost ≤ x
60 80 100
120 140 160
x
PE
Cost
Point Estimate
10 Probability Methods for Cost Uncertainty Analysis
x
PE
Cost
= x
1PE
X
+ x
2PE
X
+ x
3PE
X
+···+x
nPE
X
(1.2)
1 2 3
n
and x
iPE
X
(i =1, ..., n) is the point estimate of X
i
. Computing x
PE
Cost
i
according to Equation 1.2 is known among practitioners as the “roll-up”
procedure.
∗
In cost engineering and analysis, it is traditional to consider x
PE
Cost
a value
for Cost that contains no reserve dollars. As a point estimate, x
PE
Cost
provides
the “anchor” from which to choose a value for Cost that contains