An application of Bayes´ theorem to management decision making

This paper presents an integrated Bayesian approach for explicitly combining evidence from engineering models, ground tests, and flight testing to provide reliability assessments for a one-shot missile system. The approach considers both indirect and direct evidence to provide an expression of confidence that the missile will perform its mission. It provides individual subsystem reliability predictions based on the most recent ground and flight test evidence available. These predictions are then compared to the individual subsystem reliability specifications to provide management with a clear indication of the current status of the missile and thus judge the probability of achieving its specifications. The approach facilitates communication among engineers and project management by providing a structure that relates all applicable information quantitatively. Since ground test results can be integrated into the reliability estimate, the impact of failure trends on mission reliability will be evaluated before they impact the flight test program. The model has established a basis for evaluating the reliability of each individual subsystem, ranking the major contributors to mission unreliability, and focusing management´s attention on those problems having the greatest impact on the program