Uncertainty in through-life costing-review and perspectives

Estimating through-life cost (TLC) is an area that iscritical to many industrial sectors, and in particular, within thedefense and aerospace where products are complex and have extendedlife cycles. One of the key problems in modeling the costof these products is the limited life-cycle information at the earlystage. This leads to epistemic and aleatory uncertainty within theestimation process in terms of data, estimation techniques, andscenarios analysis. This paper presents a review of the uncertaintyclassification in engineering literature and the nature of uncertaintyin TLC estimation. Based on the review, the paper thenpresents a critique of the current uncertaintymodeling approachesin cost estimation and concludes with suggestion for the requirementof a different approach to handling uncertainty in TLC. Thepotential value of imprecise probability should be explored withinthe domain of TLC to assist cost estimators and decision makersin understanding and assessing the uncertainty. The implication ofsuch a representation in terms of decision making under risk anddecision making under uncertainty is also discussed.