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Proceedings of the Eighth International Conference on Probabilistic Safety Assessment & Management (PSAM)

Editor
Michael G. Stamatelatos
Michael G. Stamatelatos
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Harold S. Blackman
Harold S. Blackman
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ISBN-10:
0791802442
No. of Pages:
2576
Publisher:
ASME Press
Publication date:
2006

Risk management is a term, which is used in very different ways today: On the one hand we have technical risks, which are usually related to the issues of Health, Safety & Environment (HSE). There are proven methods to analyze these risks like quantitative fault-tree- and/or event-tree-analysis or qualitative approaches like FMEA. On the other hand, risk from the viewpoint of banks or of insurance companies means mainly the risk of financial loss. These risks can be discussed within the framework of financial mathematics. Finally, a third aspect of risk is external influences, like changing laws, changing markets or — for a public company — reduced public funding.

All the methods to calculate and finally manage risks are well established and suitable to handle a special sort of risk. But it is almost impossible to join these different methods to determine an overall risk. Modern companies are requested to react flexibly to changing political and market conditions. These circumstances lead to risks, which are caused by different and — at first glance — independent root causes. In this paper we present a method, which makes it possible to combine these different aspects of risk to an integrated risk management approach.

Our method transforms qualitative estimations of the frequency or likelihood of occurrence and quantitative determined values (e. g. from a fault-tree-analysis or a Weibull calculation) for different root-causes to an objective estimation of risks. This allows us to handle different categories of risk like

• Technology

• Ability for innovation

• Organization

• Political circumstances

• Environment

• Social structures and human resources

The approach we apply is essentially a top-down approach, which starts with risks at the highest level, because these risks are usually easy to identify and to describe. Like in the fault-tree-approach we identify intermediate cause levels, which are again determined by other cause levels on the same or a lower level, until we end with root causes, which can be characterized in an abstract way like e. g. “motivation of staff” or very precisely with a numerical statement about the availability of the production line.

We demonstrate the method in the case of a scientific institution, where three completely different aspects of risk were of special interest: scientific output, decommissioning of the site and financing. With our method it was possible to determine the influence of the basic events to each of these aspects and to describe the risk in terms of virtual and real costs. This allows effective risk management.

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