The following are examples of assessing prior distributions based on information

provided by a single source. The case of multiple sources of information is discussed in

Section 8.9.

Example 1:
~
Consider the case where the source of data provides a point estimate ( λ = 1E − 4 ) for a
failure rate (no uncertainty range given). In this case we assume a parametric prior
distribution (typically lognormal) and proceed as follows:

• Use the point estimate as the median value to calculate µ (see Equation
8.3)
~
µ = ln(λ 50 ) = ln(λ ) = −9.21

• Assign an uncertainty range representing possible values of the system

failure rate based on engineering judgment (e.g., an error factor (EF) of 5
or 10):

λ 95
EF = =5
λ 50

• Calculate the value of the second lognormal distribution parameter from:

ln( EF)
σ= = 0.978
1.645

With values of µ and σ determined, the form of the prior (lognormal) distribution
(Equation 8.3) is fully specified.

Example 2:
~
Now consider the case where the source of data provides a point estimate ( λ = 2 E − 4 )
and lower and upper bounds ( λ L = 1E − 5, and λ U = 1E − 3 ) for a failure rate. As in
example 1, we assume a parametric prior distribution (again lognormal) and take the
following steps:

• Since the problem is over-determined, having three pieces of information,

~
( λ, λ L , λ U ) for estimation of two unknowns ( µ and σ ), we choose two
of the estimates judged to be most representative of the range/value of the
failure rate. In this case we use λ L and λ U .

• Unless explicitly defined, it is common to assume that the bounds

provided by the data source are intended to be the 5th and 95th percentiles

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 of the failure rate (90% confidence range). With this interpretation, we fit
a lognormal distribution to the data:

{ } { }
µ = ln(λ 50 ) = ln (λ L × λ U )1 / 2 = ln (1E − 5 × 1E − 3)1 / 2 = −9.21
λ 95
EF = = 10
λ 50
ln(EF) ln(10)
σ= = = 1.4
1.645 1.645

In cases where it is believed that the uncertainty range provided by source is

underestimated (a situation often encountered when using expert judgment as specified in
Chapter 7) the bound may be used at a lower confidence range (e.g., as 20th and 80th
percentiles corresponding to 60% confidence range).

Example 3:

Consider the case where the “point estimate” is to be developed by modifying a base rate
using correction factors, the method used by MIL-STD-217. This point estimate can then
be used as the median of an uncertainty distribution.

For instance in the case of discrete semiconductors, we use Equation 8.1. Suppose we are
interested in “Silicon NPN general purpose JAN grade transistor.”

The base failure rate, predicated on stress ratio and temperature, is given as

λ b =0.0012 failures in 1E6 hours.

The π factors are:

• Environment (fixed ground): π E = 5.8

• Application (linear operation): π A = 1.5
• Quality (JAN): π Q = 1.2
• Power Rating (1 watt): π R = 1.0
• Voltage Stress (60%): π S2 = 0.88
• Complexity (single transistor): π C = 1.0

The resulting Predicted Rate is:

λ P = 0.0012(5.8 × 1.5 × 1.2 × 1.0 × 0.88 × 1.0) = 0.011 failures / 10 6 hours

Uncertainty assessment must reflect confidence in source quality, and applicability to the
situation. This is obviously based on engineering judgment. As an illustration, we use the
above failure rate estimate (1.1E–8 per hour) as median of a lognormal distribution with

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an error factor EF=10 on an assumed lognormal distribution. We then proceed as in
Example 1.

8.6 SELECTION OF THE LIKELIHOOD FUNCTION

The form of the likelihood function depends on the nature of the assumed Model of the
World representing the way the new data/information is generated:

• For data generated from a Poisson Process (e.g., counts of failures during
operation), the Poisson distribution is the proper likelihood function

( λT ) k − λT
Pr( k T, λ ) = e (8.6)
k!

which gives the probability of observing k events (e.g., number of failures

of a component) in T units of time (e.g., cumulative operating time of the
component), given that the rate of occurrence of the event (failure rate)
is λ . The MLE of λ is (see Chapter 7)

k
λˆ = (8.7)
T

It is also possible to combine data from several independent Poisson

processes, each having the same rate λ . This applies to the case where
data are collected on identical equipment to estimate their common failure
rate. Failure counting process for each equipment is assumed to be a
Poisson process. In particular, suppose that the ith Poisson process is
observed for time ti, yielding the observed count ki. The total number of
event occurrences is k = Σ i k i where the sum is taken over all of the
processes, and the exposure time is T = Σ i t i . This combined evidence can
be used in the likelihood function of Equation 8.6.

• For data generated from a Bernoulli Process (e.g., counts of failures on

system demands), the Binomial distribution is the proper likelihood
function:

N
Pr( k | N , q ) =   q k (1 − q ) N − k (8.8)
k

which gives the probability of observing k events (e.g., number of failures

of a component) in N trials (e.g., total number of tests of the component),
given that the probability of failure per trial (failure on demand
probability) is q. The MLE of q is:
)
q=k/N (8.9)

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