Phased capacity expansion - using continuous distributions to model prior beliefs.: An article from: Engineering Economist
Book Details
Author(s)George C. Prueitt, Chan S. Park
ISBN / ASINB00097MMGE
ISBN-13978B00097MMG8
MarketplaceFrance 🇫🇷
Description
This digital document is an article from Engineering Economist, published by Institute of Industrial Engineers, Inc. (IIE) on January 1, 1997. The length of the article is 5973 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the author: Many current equipment replacement/production capacity expansion decisions carry increasing amounts of performance uncertainty when the alternative processes include technical innovations. In a sequential decision making environment, post-audit information can be used to resolve this uncertainty. In this paper, we demonstrate how three-point, PERT-type estimates can be used to determine continuous prior probability distributions that incorporate the post-audit information in Bayesian revision. Further, we develop the concept of equivalent sample size to insert qualitative judgment into the decision making process. This is initially used to reflect our belief in the estimates' quality, and, subsequently, in an assessment of the quality of the observed sample data. A case study of an actual decision problem is used to illustrate the concepts.
Citation Details
Title: Phased capacity expansion - using continuous distributions to model prior beliefs.
Author: George C. Prueitt
Publication:Engineering Economist (Refereed)
Date: January 1, 1997
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: v42 Issue: n2 Page: p91(20)
Distributed by Thomson Gale
From the author: Many current equipment replacement/production capacity expansion decisions carry increasing amounts of performance uncertainty when the alternative processes include technical innovations. In a sequential decision making environment, post-audit information can be used to resolve this uncertainty. In this paper, we demonstrate how three-point, PERT-type estimates can be used to determine continuous prior probability distributions that incorporate the post-audit information in Bayesian revision. Further, we develop the concept of equivalent sample size to insert qualitative judgment into the decision making process. This is initially used to reflect our belief in the estimates' quality, and, subsequently, in an assessment of the quality of the observed sample data. A case study of an actual decision problem is used to illustrate the concepts.
Citation Details
Title: Phased capacity expansion - using continuous distributions to model prior beliefs.
Author: George C. Prueitt
Publication:Engineering Economist (Refereed)
Date: January 1, 1997
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: v42 Issue: n2 Page: p91(20)
Distributed by Thomson Gale
