Expected losses, insurability, and benefits from reducing vulnerability to attacks.

A model of malicious attacks against an infrastructure system is developed that uses a network representation of the system structure together with a Hidden Markov Model of an attack at a node of that system and a Markov Decision Process model of attacker strategy across the system as a whole. We use information systems as an illustration, but the analytic structure developed can also apply to attacks against physical facilities or other systems that provide services to customers. This structure provides an explicit mechanism to evaluate expected losses from malicious attacks, and to evaluate changes in those losses that would result from system hardening. Thus, we provide a basis for evaluating the benefits of system hardening. The model also allows investigation of the potential for the purchase of an insurance contract to cover the potential losses when safeguards are breached and the system fails

Optimal recovery sequencing for critical infrastructure resilience assessment.

Critical infrastructure resilience has become a national priority for the U. S. Department of Homeland Security. System resilience has been studied for several decades in many different disciplines, but no standards or unifying methods exist for critical infrastructure resilience analysis. This report documents the results of a late-start Laboratory Directed Research and Development (LDRD) project that investigated the identification of optimal recovery strategies that maximize resilience. To this goal, we formulate a bi-level optimization problem for infrastructure network models. In the 'inner' problem, we solve for network flows, and we use the 'outer' problem to identify the optimal recovery modes and sequences. We draw from the literature of multi-mode project scheduling problems to create an effective solution strategy for the resilience optimization model. We demonstrate the application of this approach to a set of network models, including a national railroad model and a supply chain for Army munitions production