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

Fingerprint

Simulation
Multi-attribute utility
Profit
Life cycle
Modeling
Uncertainty
Adequacy
Economics
Investment decision
Bayesian inference
Multiple criteria
Authentication
Guarantee
Decision maker
Evaluation

Keywords

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

Cite this

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Simulation and multi-attribute utility modelling of life cycle profit. / Rosqvist, Tony (Corresponding Author).

In: Journal of Multi-Criteria Decision Analysis, Vol. 10, No. 4, 2001, p. 205-218.

Research output: Contribution to journalArticleScientificpeer-review

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