Financial risk assessment methodology for natural hazards

Engineered facilities are deemed safe if they have little or no probability of incurring damage when subjected to regular actions or natural hazards. Any probability of the performance of any designed system (i.e. capacity) not being able to meet the performance required of it (i.e. demand) results in risk, which might be expressed either as a likelihood of damage or potential financial loss. Engineers are used to dealing with the former (i.e. damage), which gives a fair indication of repair/strengthening work needed to bring the system back to full functionality. Nevertheless, other non-technical stakeholders (such as owners, insurers, decision-makers) of the designed facilities cannot read too much from damage. Hence, risk, if interpreted in terms of damage only, will not be comprehended by all stakeholders. On the other hand, financial risk expressed in terms of probable dollar loss in easily understood by all. Therefore, there is an impetus on developing methodologies which correlate the system capacity and demand to financial risk. This paper builds on the existing probabilistic risk assessment methodology and extends it to estimate expected annual financial loss. The general methodology formulated in this paper is applicable to any engineered facilities and any natural hazard. To clarify the process, the proposed methodology is applied to assess overall financial risk of a highway bridge pier due to seismic hazar

Risk Assessment Methodology for Critical Infrastructure Protection

The European Programme for Critical Infrastructure Protection is the main vehicle for the protection of critical infrastructures in Europe. The Directive 2008/114/EC is the legislative instrument of this programme. Risk assessment is an important element that is mentioned throughout the Directive text. However, there is no harmonized methodology in Europe for the assessment of interconnected infrastructures. The present work describes such a methodology and its implementation for the assessment of critical infrastructures of European dimension. The methodology accounts for impact at asset level, evaluates the propagation of a failure at network level due to interdependencies and assess the economic impact of critical infrastructure disruption at national level.JRC.G.6-Security technology assessmen

PROBLEMATIC ASPECTS OF FINANCIAL RISK ASSESSMENT METHODOLOGY IN STEVEDORING COMPANIES

The study is dedicated to identification of problematic aspects of financial risk assessment methodology on the example of stevedoring companies. In research established the list of issues for improvement the methodology of financial risk assessment both in theoretical and practical aspects. Formulated industry features of the stevedoring companies’ activity, relevant factors from the perspective of financial risk impact on results of activity, among which are distinguished: loss of net sales, exchange rate instability and decrease of financial stability. It was found that the loss of net income from the sale of state stevedoring companies of Ukraine occurred: due to the failure to fulfill the plan of cargo processing by reducing the number of the number of ship-measures and change of the nomenclature of cargo towards the less profitable and instability of the US dollar. Particular attention is paid to assessing the level of financial stability of state-owned stevedoring companies in Ukraine and identifies a downward trend in recent years. It is argued that the definition of factors that affect financial risks should be conducted using factor analysis, mathematical models that require comprehensive consideration of uncertainty factors and related to the peculiarities of stevedoring companies operation. The feasibility of drawing up a financial risk map and the options of management's response to their presence have been proved.The study is dedicated to identification of problematic aspects of financial risk assessment methodology on the example of stevedoring companies. In research established the list of issues for improvement the methodology of financial risk assessment both in theoretical and practical aspects. Formulated industry features of the stevedoring companies’ activity, relevant factors from the perspective of financial risk impact on results of activity, among which are distinguished: loss of net sales, exchange rate instability and decrease of financial stability. It was found that the loss of net income from the sale of state stevedoring companies of Ukraine occurred: due to the failure to fulfill the plan of cargo processing by reducing the number of the number of ship-measures and change of the nomenclature of cargo towards the less profitable and instability of the US dollar. Particular attention is paid to assessing the level of financial stability of state-owned stevedoring companies in Ukraine and identifies a downward trend in recent years. It is argued that the definition of factors that affect financial risks should be conducted using factor analysis, mathematical models that require comprehensive consideration of uncertainty factors and related to the peculiarities of stevedoring companies operation. The feasibility of drawing up a financial risk map and the options of management's response to their presence have been proved

ARAMIS : an integrated risk assessment methodology for SEVESO plants

International audienceThis paper intends to give a very general description of the ARAMIS Methodology and to show how it answers the needs of various stakeholders concerned by the safety of industrial plants. ARAMIS is divided into six major steps, which will be described shortly in this paper. The potential end users of ARAMIS are mainly the industry, the competent authorities and the local authorities. If all of them have an interest in the same risk management process, their needs are slightly different. Their expectations are detailed and the way ARAMIS brings an answer is explained in this paper

Analysis of FDS’s Risk Assessment Methodology at Pharmaceutical Manufacturing Site

This research describes how the FDA has incorporated risk analysis methodology into its inspection of pharmaceutical manufacturers in the time period between 2004-2008. It analyzes the violations specified in FDA warning letters that are issued after site inspections of pharmaceutical facilities. The outcome of this analysis is to evaluate the FDA’s performance to determine whether it has improved the overall inspection process and increased its quality assuranc

An Uprateability Risk Assessment Methodology

Uprating is a process to assess the ability of a part to meet the functionality and performance requirements of the applications in which the part is used outside the manufacturers' specification range. However, uprating can be an expensive and time consuming process. There is also no guarantee that all parts can be successfully uprated. In 2002, some electronic part manufacturers began releasing a category of parts considered to be "closer" to military-grade parts, called "Enhanced Plastic (EP)". Since some of the EP parts offer a wider operating temperature range compared with the commercial parts, they are promoted by the EP part manufacturers as an alternative to uprating. This thesis evaluates the EP parts and finds that when EP parts are available in wider temperature range, they can be beneficial to the electronic system manufacturers as they do not require uprating. However, the availability of EP parts in wide operating temperature range is limited, and the cost is much higher. The thesis then provides a priori methodology to evaluate the uprateability of an electronic part, and in particular, eliminate parts that are unlikely to be successful in uprating. Four uprateability risk levels are defined which can be determined from the available part and system information during the part selection process. The method of analyzing the information to assign the risk levels is developed for both active and passive parts. Three case studies of uprateability risk assessment are then presented in the thesis - one for an operational amplifier and two for polymer film capacitors. Complete analysis beginning from manufacturer and part assessment through electrical test results analysis is performed to show the uprateability risk assessment process

A new integrated collision risk assessment methodology for autonomous vehicles

Real-time risk assessment of autonomous driving at tactical and operational levels is extremely challenging since both contextual and circumferential factors should concurrently be considered. Recent methods have started to simultaneously treat the context of the traffic environment along with vehicle dynamics. In particular, interaction-aware motion models that take inter-vehicle dependencies into account by utilizing the Bayesian interference are employed to mutually control multiple factors. However, communications between vehicles are often assumed and the developed models are required many parameters to be tuned. Consequently, they are computationally very demanding. Even in the cases where these desiderata are fulfilled, current approaches cannot cope with a large volume of sequential data from organically changing traffic scenarios, especially in highly complex operational environments such as dense urban areas with heterogeneous road users. To overcome these limitations, this paper develops a new risk assessment methodology that integrates a network-level collision estimate with a vehicle-based risk estimate in real-time under the joint framework of interaction-aware motion models and Dynamic Bayesian Networks (DBN). Following the formulation and explanation of the required functions, machine learning classifiers were utilized for the real-time network-level collision prediction and the results were then incorporated into the integrated DBN model for predicting collision probabilities in real-time. Results indicated an enhancement of the interaction-aware model by up to 10%, when traffic conditions are deemed as collision-prone. Hence, it was concluded that a well-calibrated collision prediction classifier provides a crucial hint for better risk perception by autonomous vehicles