Evaluating product reliability costs

It is noted that reliability differences are often neglected or, at most, used as a tie-breaker in utility equipment purchase decisions. As a result, the true economic value of failure rate differences can be grossly understated. It is suggested that a more realistic appraisal, based on revenue requirements, can be made of differences in reliability. This appraisal is general enough to be applied to a variety of utility equipment. A two-step procedure for evaluating reliability differences is discussed. The first step involves determining failure rates. The second step is the evaluation of differences in failure rates, which follows the basic total owning cost or revenue requirement equations