Taguchi's quality loss function defines a quadratic relationship between deviations from a target values and loss to society. Under this approach, targets of system performance indicators, are set to minimize this loss. Traditionally, robust design engineers make the implicit assumption that failure agents affect systems' technical parameters stochastically, under steady state. Consequently, robust design strategy seeks to minimize societal loss by setting each technical parameter as close as possible to the lowest value on the loss function, usually the mid-point between the lower and upper specification limits. However, on closer examination, it can be demonstrated that many failure agents affect systems (e.g., electronic components, Mechanical elements, Software pieces) in a predictable, dynamic direction and rate. The authors denote such agents "Degrading Failure Agents". The paper describes an optimized design strategy accounting for degrading failure agents. This is done by setting the operating points of technical parameters to counteract the effects of such failure agents. The approach is demonstrated with a cardiac pacemaker case study that considers several types of degradation models including joint models and Weibull bathtub distributions.
{"title":"Optimizing System Design under Degrading Failure Agents","authors":"A. Engel, Ron S. Kenett, Shalom Shachar, Y. Reich","doi":"10.1109/SMRLO.2016.26","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.26","url":null,"abstract":"Taguchi's quality loss function defines a quadratic relationship between deviations from a target values and loss to society. Under this approach, targets of system performance indicators, are set to minimize this loss. Traditionally, robust design engineers make the implicit assumption that failure agents affect systems' technical parameters stochastically, under steady state. Consequently, robust design strategy seeks to minimize societal loss by setting each technical parameter as close as possible to the lowest value on the loss function, usually the mid-point between the lower and upper specification limits. However, on closer examination, it can be demonstrated that many failure agents affect systems (e.g., electronic components, Mechanical elements, Software pieces) in a predictable, dynamic direction and rate. The authors denote such agents \"Degrading Failure Agents\". The paper describes an optimized design strategy accounting for degrading failure agents. This is done by setting the operating points of technical parameters to counteract the effects of such failure agents. The approach is demonstrated with a cardiac pacemaker case study that considers several types of degradation models including joint models and Weibull bathtub distributions.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115635863","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents the application of the Lz-transform method to availability assessment of aging multi-state cold water-supply system for factory, specializes on producing raw materials for the plastics industry. The cooling system consists of 14 elements, combined into five sub-systems: two Pump's sub-systems, Chiller, Backup sub-system and Differential Tap. The performance of the system and the sub-systems is measured by their produced cooling capacity. Differential Tap is aging component with the rate of failures depends on time. Times to failures for the rest of the sub-systems components and times to repairs for all system's components are distributed exponentially. Straightforward Markov method applied to solve this problem will require building of a system model with 98,304 states and solving a corresponding system of multiple differential equations. Lz-transform method, which is used for calculation of the system availability, drastically simplified the solution. Presented approach identifies the critical points in the system and checks whether system's availability meets the accepted standards.
{"title":"On Availability Determination for MSS Cold Water Supply System by Lz-Transform: Case Study","authors":"Pavel Lein, I. Frenkel, L. Khvatskin","doi":"10.1109/SMRLO.2016.65","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.65","url":null,"abstract":"This paper presents the application of the Lz-transform method to availability assessment of aging multi-state cold water-supply system for factory, specializes on producing raw materials for the plastics industry. The cooling system consists of 14 elements, combined into five sub-systems: two Pump's sub-systems, Chiller, Backup sub-system and Differential Tap. The performance of the system and the sub-systems is measured by their produced cooling capacity. Differential Tap is aging component with the rate of failures depends on time. Times to failures for the rest of the sub-systems components and times to repairs for all system's components are distributed exponentially. Straightforward Markov method applied to solve this problem will require building of a system model with 98,304 states and solving a corresponding system of multiple differential equations. Lz-transform method, which is used for calculation of the system availability, drastically simplified the solution. Presented approach identifies the critical points in the system and checks whether system's availability meets the accepted standards.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125829236","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider items that are incepted into operation having already a random (initial) age and define the corresponding remaining lifetime. We show that these lifetimes are identically distributed when the age distribution is equal to the equilibrium distribution of the renewal theory. Then we develop the population studies approach to the problem and generalize the setting in terms of stationary and stable populations of items. We obtain new stochastic comparisons for the corresponding population ages and remaining lifetimes that can be useful in applications.
{"title":"On Remaining Lifetimes with Random Initial Age. A New Insight","authors":"M. Finkelstein","doi":"10.1109/SMRLO.2016.67","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.67","url":null,"abstract":"We consider items that are incepted into operation having already a random (initial) age and define the corresponding remaining lifetime. We show that these lifetimes are identically distributed when the age distribution is equal to the equilibrium distribution of the renewal theory. Then we develop the population studies approach to the problem and generalize the setting in terms of stationary and stable populations of items. We obtain new stochastic comparisons for the corresponding population ages and remaining lifetimes that can be useful in applications.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129180998","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The new challenging era of scientific data management in the coming decade named "Big Data" requires giant complexes for distributed computing and corresponding grid-cloud internet services. Known common approaches to software reliability based on the probability theory or on considering software as an open non-equilibrium dynamic system cannot conform to advanced grid-cloud software management systems. Therefore to provide the optimality and reliability of such sophisticated systems we choose the imitative simulation method oriented on a knowledge of dynamics of the system functioning. A new grid and cloud service simulation system was developed in the JINR Dubna laboratory of information technologies which focused on improving the efficiency and reliability of the grid-cloud systems development by using work quality indicators of some real system to design and predict its evolution. For these purposes the simulation program is combined with real monitoring system of the gridcloud service through a special database. Some examples of the program applications to simulate a sufficiently general cloud structure, which can be used for more common purposes, are given.
{"title":"Combined Approach to Reliability of Great Software Complexes for Distributed Computing with Big Data in Contemporary Physical Experiments","authors":"G. Ososkov","doi":"10.1109/SMRLO.2016.43","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.43","url":null,"abstract":"The new challenging era of scientific data management in the coming decade named \"Big Data\" requires giant complexes for distributed computing and corresponding grid-cloud internet services. Known common approaches to software reliability based on the probability theory or on considering software as an open non-equilibrium dynamic system cannot conform to advanced grid-cloud software management systems. Therefore to provide the optimality and reliability of such sophisticated systems we choose the imitative simulation method oriented on a knowledge of dynamics of the system functioning. A new grid and cloud service simulation system was developed in the JINR Dubna laboratory of information technologies which focused on improving the efficiency and reliability of the grid-cloud systems development by using work quality indicators of some real system to design and predict its evolution. For these purposes the simulation program is combined with real monitoring system of the gridcloud service through a special database. Some examples of the program applications to simulate a sufficiently general cloud structure, which can be used for more common purposes, are given.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121531022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Prognostic systems are expected to provide predictive information about the Remaining Useful Life (RUL) for equipment and components. During the last ten years, numerous RUL prediction models have been developed. These methods usually treat completed time-series only, i.e. full statistics before the item fails. Under actual operating conditions occasionally number of failed items is too small, and therefore application of uncompleted (suspended) time-series is necessary, and using Semi-Supervised methods instead of Supervised is required. In this paper, we propose an approach based on regression and classification models we have introduced in the past. These models consider monitoring data (time-series) as inputs and RUL estimation as output. Significant difference of this model is using suspended time-series to estimate optimal RUL for each suspended time-series, so they can be used for initial model training. This article describes the procedures that have been developed and applied successfully for Suspended Time-Series using. Several models based on modification of the SVR and SVC methods (Support Vector Regression and Support Vector Classification) are proposed for consideration. Number of uncompleted time-series used for training and cross-validation is proposed as additional control parameter. Suggested methodology and algorithms were verified on the NASA Aircraft Engine database. Numerical examples based on this database have been also considered. Experimental result shows that the proposed model performs significantly better estimations than pure supervised learning based model.
{"title":"Prognostic and Health Management for Suspended Time-Series","authors":"S. Porotsky, Z. Bluvband","doi":"10.1109/SMRLO.2016.24","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.24","url":null,"abstract":"Prognostic systems are expected to provide predictive information about the Remaining Useful Life (RUL) for equipment and components. During the last ten years, numerous RUL prediction models have been developed. These methods usually treat completed time-series only, i.e. full statistics before the item fails. Under actual operating conditions occasionally number of failed items is too small, and therefore application of uncompleted (suspended) time-series is necessary, and using Semi-Supervised methods instead of Supervised is required. In this paper, we propose an approach based on regression and classification models we have introduced in the past. These models consider monitoring data (time-series) as inputs and RUL estimation as output. Significant difference of this model is using suspended time-series to estimate optimal RUL for each suspended time-series, so they can be used for initial model training. This article describes the procedures that have been developed and applied successfully for Suspended Time-Series using. Several models based on modification of the SVR and SVC methods (Support Vector Regression and Support Vector Classification) are proposed for consideration. Number of uncompleted time-series used for training and cross-validation is proposed as additional control parameter. Suggested methodology and algorithms were verified on the NASA Aircraft Engine database. Numerical examples based on this database have been also considered. Experimental result shows that the proposed model performs significantly better estimations than pure supervised learning based model.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125713412","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The project aims at harvesting residual heat from Internal Combustion engines to purify water. This effort is intended to develop a user-friendly portable water purification system. By developing this product, users will be able to optimize self-reliance in fulfilling their requirement of drinking water. Therefore, the initiative will have environmental value by reducing dependence on commercially available bottled water. It becomes more important for the underdeveloped countries where tap water is not portable and reliance on bottled water is very heavy. Cars are on the most frequently used modes of transport for urban populace. If we are able to provide a mechanism through which water can be purified using the exhaust heat of car engine and promote this solution, everyday large amount of water will be purified while users are performing their regular activity of driving. The product will basically take impure locally available water, soften it, and kill the harmful bacteria causing water-borne diseases. This product can be asset for the lorry/truck drivers who travel over long distances and can't rely on the quality of water available in developing countries like India. Thus it will be important to keep the product as cheap as possible.
{"title":"Portable Heat Exchanger to Purify Water","authors":"G. Gupta, P. K. Sanjram, D. Deshmukh","doi":"10.1109/SMRLO.2016.112","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.112","url":null,"abstract":"The project aims at harvesting residual heat from Internal Combustion engines to purify water. This effort is intended to develop a user-friendly portable water purification system. By developing this product, users will be able to optimize self-reliance in fulfilling their requirement of drinking water. Therefore, the initiative will have environmental value by reducing dependence on commercially available bottled water. It becomes more important for the underdeveloped countries where tap water is not portable and reliance on bottled water is very heavy. Cars are on the most frequently used modes of transport for urban populace. If we are able to provide a mechanism through which water can be purified using the exhaust heat of car engine and promote this solution, everyday large amount of water will be purified while users are performing their regular activity of driving. The product will basically take impure locally available water, soften it, and kill the harmful bacteria causing water-borne diseases. This product can be asset for the lorry/truck drivers who travel over long distances and can't rely on the quality of water available in developing countries like India. Thus it will be important to keep the product as cheap as possible.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115849750","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In common cases the wind actions may be expressed as a product of time invariant and time variant components. The time invariant components, originated primarily from the pressure factor, gust factor and roughness, are represented by the product a single factor. The time variant component is caused by the basic wind pressure dependent on square of wind speed. Four types of distributions are considered here to describe involved random variables: three parameter Weibull distribution WB3, general extreme value distribution GEV, three parameter lognormal distribution LN3 and the Gumbel distribution GU, which is a special case of GEV. Available data indicate that the statistical parameters of annual wind speed depend significantly on local conditions. The average coefficient of variation is about 0.12, the skewness around 0.3. The time invariant component C has the coefficient of variation about 0.2 and skewness around 0.35. The annual wind pressure w, has the coefficient of variation about 0.3 and skewness 0.8. Then the 50 years extreme wind pressure w has the coefficient of variation 0.23 and skewness 0.56. Considering the above mentioned data it is shown that both the annual wind speed and wind pressure can be best described by LN3 that provide similar predictions as lower bounded WB3 distribution. Further research should be primarily focused on probabilistic models for the annual wind speed and the time invariant components.
{"title":"Probabilistic Models for Wind Actions","authors":"M. Holicky, M. Sýkora","doi":"10.1109/SMRLO.2016.38","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.38","url":null,"abstract":"In common cases the wind actions may be expressed as a product of time invariant and time variant components. The time invariant components, originated primarily from the pressure factor, gust factor and roughness, are represented by the product a single factor. The time variant component is caused by the basic wind pressure dependent on square of wind speed. Four types of distributions are considered here to describe involved random variables: three parameter Weibull distribution WB3, general extreme value distribution GEV, three parameter lognormal distribution LN3 and the Gumbel distribution GU, which is a special case of GEV. Available data indicate that the statistical parameters of annual wind speed depend significantly on local conditions. The average coefficient of variation is about 0.12, the skewness around 0.3. The time invariant component C has the coefficient of variation about 0.2 and skewness around 0.35. The annual wind pressure w, has the coefficient of variation about 0.3 and skewness 0.8. Then the 50 years extreme wind pressure w has the coefficient of variation 0.23 and skewness 0.56. Considering the above mentioned data it is shown that both the annual wind speed and wind pressure can be best described by LN3 that provide similar predictions as lower bounded WB3 distribution. Further research should be primarily focused on probabilistic models for the annual wind speed and the time invariant components.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132017630","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study dynamics of cracks that appear in rocks under hydraulic fracturing. Usually, such cracks are modeled as spreading two-dimensional surfaces. However, many reasons e.g. presence of pre-cracks may cause bifurcations of cracks, namely their branching. This phenomenon completely changes the dynamics of fracturing. It is extremely important in modeling extraction of petroleum and caused ecological consequences. To create the mathematical model of such branching, we combine recently developed methods of Dynamical Systems with classical methods of Fracture Mechanics. We demonstrate possible applications of obtained results in modeling dynamics of ecological systems.
{"title":"Branching of Cracks That Spread in Rocks","authors":"S. Kryzhevich, Maria Kryzhevich","doi":"10.1109/SMRLO.2016.88","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.88","url":null,"abstract":"We study dynamics of cracks that appear in rocks under hydraulic fracturing. Usually, such cracks are modeled as spreading two-dimensional surfaces. However, many reasons e.g. presence of pre-cracks may cause bifurcations of cracks, namely their branching. This phenomenon completely changes the dynamics of fracturing. It is extremely important in modeling extraction of petroleum and caused ecological consequences. To create the mathematical model of such branching, we combine recently developed methods of Dynamical Systems with classical methods of Fracture Mechanics. We demonstrate possible applications of obtained results in modeling dynamics of ecological systems.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115489753","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The target reliability levels recommended in national and international documents vary within a broad range, while the reference to relevant costs and failure consequences is mentioned only very vaguely. In some documents the target reliability index β is indicated for one or two reference periods (1 year and 50 years) without providing any link to the design working life. This contribution attempts to clarify the relationship between the target reliability levels, construction costs, failure consequences, reference period, the design working life and the discount rate. The theoretical study based on probabilistic optimization is supplemented by recommendations useful for code developers and practicing engineers. It appears that the optimal reliability level depends primarily on the construction costs, failure costs, and relative cost for improving structural safety, and less significantly on the discount rate and the time to failure.
{"title":"Specification of the Target Reliability Level","authors":"M. Holicky","doi":"10.1109/SMRLO.2016.27","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.27","url":null,"abstract":"The target reliability levels recommended in national and international documents vary within a broad range, while the reference to relevant costs and failure consequences is mentioned only very vaguely. In some documents the target reliability index β is indicated for one or two reference periods (1 year and 50 years) without providing any link to the design working life. This contribution attempts to clarify the relationship between the target reliability levels, construction costs, failure consequences, reference period, the design working life and the discount rate. The theoretical study based on probabilistic optimization is supplemented by recommendations useful for code developers and practicing engineers. It appears that the optimal reliability level depends primarily on the construction costs, failure costs, and relative cost for improving structural safety, and less significantly on the discount rate and the time to failure.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124816705","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Enterprise can be described with vector of financial characteristics e.g. revenue, net profit, net working capital, depreciation, debt etc. Vector evolution can be modeled with use of system of recurrent equations. These equations can be combined in three groups: equations of the income statement, equations of sources and uses of funds and balance equations. System parameters can be obtained using financial performance analysis. Cash flow can be calculated using vector components. Discounted cash flow method is used for business valuation. In real systems there is an uncertainty in all parameters. This uncertainty can be modeled utilizing stochastic approach. Monte Carlo simulation can be adopted to forecast cash flow distribution and to predict the risks caused by uncertainty. We show that once simulation model is set up, it is a simple matter to analyze the principal sources of uncertainty in the cash flows and to see how much this uncertainty could be reduced by improving the forecasts of sales or costs. Practical realization of this approach is discussed in the paper. Finally, we demonstrate how changes in model parameters influence cash flows.
{"title":"Small Business Valuation with Use of Cash Flow Stochastic Modeling","authors":"Ian Leifer, Leifer Lev","doi":"10.1109/SMRLO.2016.90","DOIUrl":"https://doi.org/10.1109/SMRLO.2016.90","url":null,"abstract":"Enterprise can be described with vector of financial characteristics e.g. revenue, net profit, net working capital, depreciation, debt etc. Vector evolution can be modeled with use of system of recurrent equations. These equations can be combined in three groups: equations of the income statement, equations of sources and uses of funds and balance equations. System parameters can be obtained using financial performance analysis. Cash flow can be calculated using vector components. Discounted cash flow method is used for business valuation. In real systems there is an uncertainty in all parameters. This uncertainty can be modeled utilizing stochastic approach. Monte Carlo simulation can be adopted to forecast cash flow distribution and to predict the risks caused by uncertainty. We show that once simulation model is set up, it is a simple matter to analyze the principal sources of uncertainty in the cash flows and to see how much this uncertainty could be reduced by improving the forecasts of sales or costs. Practical realization of this approach is discussed in the paper. Finally, we demonstrate how changes in model parameters influence cash flows.","PeriodicalId":254910,"journal":{"name":"2016 Second International Symposium on Stochastic Models in Reliability Engineering, Life Science and Operations Management (SMRLO)","volume":"149 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127265364","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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