Reliability and cost: A sensitivity analysis

Abstract

In the design phase of a system, how a design engineer or manager choose between a subsystem with .990 reliability and a more costly subsystem with .995 reliability is examined, along with the justification of the increased cost. High reliability is not necessarily an end in itself but may be desirable in order to reduce the expected cost due to subsystem failure. However, this may not be the wisest use of funds since the expected cost due to subsystem failure is not the only cost involved. The subsystem itself may be very costly. The cost of the subsystem nor the expected cost due to subsystem failure should not be considered separately but the total of the two costs should be maximized, i.e., the total of the cost of the subsystem plus the expected cost due to subsystem failure