Understanding system performance and total cost of ownership is fundamental to reliability programs for facilities and infrastructure. As reliability engineers know, all of our knowledge is about the past. All of our decisions are about the future. Monte Carlo analysis is our best tool for bridging our knowledge of the past with future uncertainties.

Monte Carlo analysis calculates the probability of outcomes by running multiple simulations using random variables. Analysis using Monte Carlo simulations aligns closely with reliability programs, in which thousands of assets vary in cost and decay rates by orders of magnitude. The power of most first-generation models using Monte Carlo simulations lies more in the insights than in the absolute values of the forecasts.

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