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.
This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.