This chapter further expands our ability to analyze variation in estimates,
to consider probability, and to make decisions under risk. Fundamentals
discussed include probability distributions, especially their graphs and properties
of expected value and dispersion; random sampling; and the use of
simulation to account for variation in engineering economy studies.
Through coverage of variation and probability, this chapter complements
topics in the first sections of Chapter 1: the role of engineering economy in
decision making and economic analysis in the problem-solving process.
These techniques are more time-consuming than using estimates made with
certainty, so they should be used primarily for critical parameters.
