Optimizing VVT strategies: a decomposition approach

M Barad () and A Engel
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M Barad: Tel Aviv University
A Engel: Israel Aircraft Industries

Journal of the Operational Research Society, 2006, vol. 57, issue 8, 965-974

Abstract: Abstract Verification, validation and testing (VVT) of large systems is an important but complex process. The decisions involved have to consider on one hand the controllable variables associated with investments in appraisal and prevention activities and on the other hand the outcomes of these decisions that are associated with risk impacts and systems' failures. Typically, quantitative models of such large systems use simulation to generate distributions of possible costs and risk outcomes. Here, by assuming independence of risk impacts, we decompose the decision process into separate decisions for each VVT activity and supercede the simulation technique by simple analytical models. We explore various optimization objectives of VVT strategies such as minimum total expected cost, minimum uncertainty as well as a generalized optimization objective expressing Taguchi's expected loss function and provide explicit solutions. A numerical example based on simplified data of a case study is used to demonstrate the proposed VVT optimization procedure.

Keywords: risk assessment; break-even analysis; quality control; Taguchi's loss function (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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DOI: 10.1057/palgrave.jors.2602077

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