Component Replacement Liability

Abstract

This paper reports the results of an analytic problem arising out of a history. Although some of the context and all of the numbers have been changed to protect proprietary information, the following important facet of the original case history remains invariant in the transformation. Management of the sponsoring firm had planned to make a policy decision based on differences between averages of overlapping distributions. After the influence of the probability distributions was evaluated and explained, management reversed its intended policy decision.