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308 Risk management technology in financial services
more components, and of greater system complexity, decreases greatly the reliability
of the overall system. To establish a quantitative prediction of future failure-free
operation during the mission of the equipment, we need to base our decision on
statistical analysis of data obtained from operation.
The use of numerical values permits quantitative assessment of reliability,
Qualitatively, the term failure should be interpreted as meaning operation outside
assigned tolerances.
Each characteristic to be measured should be assigned a tolerance in the per-
formance specification of quality of service, such that a failure is counted if the
tolerance limits are exceeded. Tolerance limits for failure should be computed with
due allowance for deterioration of parts as a function of usage and of time. All
components deteriorate with aging.
Section 16.5 made the reference that not only design and manufacturing, but also
the environment in which components and systems are used impact significantly on
their reliability all the way to non-performance. As an example, consider the case
of a new, advanced model of German torpedo during World War II.
At the eve of Dunkerque, although the United States was not officially at war, a
large quantity of arms and ammunition was assembled and loaded onto ships for
transportation to England. There was no time for secrecy, and so the German Navy
was well prepared to sink those ships. By coincidence, a highly effective new exploder
mechanism had become available for their torpedoes.
The submarines that were sent out to sink the weapons-carrying ships were fitted
with these theoretically more effective, but also more complex, torpedoes. The sub-
marines had no difficulty in finding the ships, but when the torpedoes were fired they
passed harmlessly underneath. The reason for failure?
The magnetic environment of the Atlantic was significantly different from that of
the North Sea where the new mechanism had been successfully tested.
This seemingly small oversight turned into a significant failure which cost the
Germans one of their best chances in the course of World War II.
The paradigm is significant because in information technology, particularly at
the implementation end, there are plenty of new gadgets steadily added; and with
them plenty of oversights. Moreover, greater complexity and the addition of more
components significantly decrease the reliability of an overall system, and this is not
being given the attention it deserves.
16.7 Reliability and availability algorithms
The statement was made in section 16.5 that missiles and information technology
don’t have the same metrics for reliability, but both metrics are important and there-
fore they should be in the analyst’s and system engineer’s toolkits. Also, they both
share some basic concepts which underpin each discipline’s reliability algorithm. Here
is an example.

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