Simulation and multi-attribute utility modelling of life cycle profit

Tony Rosqvist (Corresponding Author)

    Research output: Contribution to journalArticleScientificpeer-review

    4 Citations (Scopus)

    Abstract

    Investments on capital goods are assessed with respect to the life cycle profit as well as the economic lifetime of the investment. The outcome of an investment with respect to these economic criteria is generally non‐deterministic. An assessment of different investment options thus requires probabilistic modelling to explicitly account for the uncertainties. A process for the assessment of life cycle profit and the evaluation of the adequacy of the assessment is developed. The primary goal of the assessment process is to aid the decision‐maker in structuring and quantifying investment decision problems characterized by multiple criteria and uncertainty. The adequacy of the assessment process can be evaluated by probabilistic criteria indicating the degree of uncertainty in the assessment.

    Bayesian inference is used to re‐evaluate the initial assessment, as evidence of the system performance becomes available. Thus authentication of contracts of guarantee is supported. Numerical examples are given to demonstrate features of the described life cycle profit assessment process.
    Original languageEnglish
    Pages (from-to)205-218
    Number of pages14
    JournalJournal of Multi-Criteria Decision Analysis
    Volume10
    Issue number4
    DOIs
    Publication statusPublished - 2001
    MoE publication typeA1 Journal article-refereed

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    Keywords

    • multi-attribute utility
    • life cycle profit
    • life cycle cost
    • requisite modelling
    • Bayesian inference

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