A discussion of the dimensions of the problem of uncertainty: the distinction between risk and uncertainty, the phase of the weapon system life cycle, and the level of suboptimization being considered in the decision problem at hand. Seven types of methods that may be used to deal with uncertainty are detailed: Monte Carlo, a fortiori analysis, sensitivity analysis, a "range of estimates," supplemental discounting, adjustment factors, and special studies. Given these concepts and methods, the author outlines the implications for the development of analytical tools and techniques, as well as the implications for Department of Defense policy.
This paper presented at the Department of Defense Cost Research Symposium, Airlie, Virginia, November 1973.
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