Risk‐Adjusted Mission Value: Trading Off Mission Risk for Mission Value

This article develops a decision‐theoretic methodology for the risk‐adjusted mission value (RAMV) for selecting between alternative missions in the presence of uncertainty in the outcomes of the missions. This methodology permits trading off mission risk for mission value, something that probabilistic risk analysis cannot do unless it explicitly incorporates both mission value and risk aversion of the project management. The methodology, in its complete implementation, is consistent with the decision theory known as expected utility theory, although it differs from conventional decision theory in that the probabilities and all but one of the utilities are not those of the decision maker. The article also introduces a new interpretation of risk aversion. The methodology is consistent with the elementary management concept concerning division of labor. An example is presented for selecting between discrete alternatives—four landing sites on Mars. A second example is presented for selecting among a set of continuous alternatives—a comet flyby distance. The methodology is developed within the context of scientific missions, but the methodology is equally applicable to any situation requiring outcome value judgments, probability judgments, and risk aversion judgments by different constituencies.