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Utility Model for Minimizing Risk PowerPoint Presentation

Utility Model for Minimizing Risk

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### Utility Model for Minimizing Risk

Chandru Mirchandani

Lockheed-Martin

August 9, 2004

MIRCHANDANI

1

P115/MAPLD2004

Introduction

- To meet…
- System Objectives

- Develop a Model to accept…
- Reduced Capability
- Alternatives for Implementation

- By developing a Utility Model….

MIRCHANDANIMIRCHANDANI

2

P115/MAPLD2004

Problem Statement

- Requirement: Display sensor data in near-real time
- Constraints: Within Cost and Schedule and acceptable Quality
- Information: Uncertain…to make a selection with lowest risk of failure
Solution………...Utility Model

MIRCHANDANI

3

P115/MAPLD2004

Conceptual Framework

- Develop Criteria for System Acceptance
- Rank Attributes in order of preference
- Evaluate Attributes with respect to meeting objectives
- Quantify evaluations based on measurable metrics

MIRCHANDANI

4

P115/MAPLD2004

Option 1

- Software solution to extract and display data……..

- S1 = Data Source
- S2 = Ingest System
- S3 = Storage System
- S4 = Data Processor (S4-A)
- S5 = Data Display Processor (S5-A)

MIRCHANDANI

5

P115/MAPLD2004

Option 2

- Hardware solution to extract data and Software solution to display data……..

- S1 = Data Source
- S3 = Storage System
- S4 = Data Processor (S4-B)
- S5 = Data Display Processor (S5-B)

MIRCHANDANI

6

P115/MAPLD2004

Option 3

- Hardware solution to extract data and display data……..

- S1 = Data Source
- S3 = Storage System
- S4 = Data Processor (S4-B)
- S5 = Data Display Processor (S5-B)

MIRCHANDANI

7

P115/MAPLD2004

Methodology

- Select weighting for the success or failure criteria based on criticality
- Evaluate cost based on Re-Engineering, Implementation and Schedule
- Evaluate cost of failure based on Loss of Performance and Requirements
- Evaluate the Probability of Success and Failure
- Factor in the Uncertainty in Evaluation

MIRCHANDANI

8

P115/MAPLD2004

Uncertainty

- Uncertainty in how ‘good’ or ‘bad’ is the evaluation
- Probability of Success or Failure based on the Uncertainty

MIRCHANDANI

11

P115/MAPLD2004

Value Function

- Based on Success of the Option
If Option S is successful……

Value (S) = w(x1 + x2+ x3+ x4+ x5+ x6+ x7)/7 = Ss

If Option S Fails………..

Value (F) = 1 - w(x1 + x2+ x3+ x4+ x5+ x6+ x7)/7 = Sf

………….together with metrics

MIRCHANDANI

12

P115/MAPLD2004

Measures

- Cost of Success = Css
= 8T + 30(C+T)

- Cost of Failure = REsf(p,r,c,t) = Xsf(C+T)
= 0.529(C+T)

MIRCHANDANI

13

P115/MAPLD2004

Utility Function

For Option A:

SS = U(x1, x2, x3, x4, x5, x6, x7) = Css

= 8T + 30(C+T)

and,

SF = U(x1, x2, x3, x4, x5, x6, x7) + REsf(p,r,c,t)

= Css + REsf(p,r,c,t)

= 8T + 30(C+T) + Xsf(C+T)

= 8T + 30(C+T) + 0.529(C+T)

MIRCHANDANI

14

P115/MAPLD2004

Decision Process

SgYgHg = Probability of Options 1, 2 and 3 all being correctly evaluated

P(success with S|Sg)

=

= 0.62

MIRCHANDANI

15

P115/MAPLD2004

Utility Function

- At each node in the tree, the Decision Maker selects the minima
- Finally at the Decision Point the optimal choice is quantitatively provided

MIRCHANDANI

17

P115/MAPLD2004

Summary

- Tree can be expanded to accommodate more options
- Framework can be expanded to include intermediate decision points
- Decision points can be analyzed in a dependent manner
- Re-evaluation at a node can be enhanced using additional attributes

MIRCHANDANI

18

P115/MAPLD2004

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