Title
Risk-informed decision making of safety investments by using the disproportion factorRisk-informed decision making of safety investments by using the disproportion factor
Author
Faculty/Department
Faculty of Applied Economics
Research group
Engineering Management
Publication type
article
Publication
Rugby,
Subject
Economics
Source (journal)
Process safety and environmental protection / Institution of Chemical Engineers [London] - Rugby
Volume/pages
100(2016), p. 117-130
ISSN
0957-5820
ISI
000373538700011
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
To improve risk informed decision making, a systematic approach is developed. The goal is to analyze and to evaluate safety investments aimed at mitigating and preventing major accidents involving e.g. hazardous materials that might trigger significant financial losses and fatalities. A formulation, explicitly using a disproportion factor, is proposed as a simulation exercise approach to this end. The disproportion factor can be used by any private and public investor to bias decision-makers toward safety. This is especially interesting for deciding about the prevention of high impact low probability (HILP) accidents. Furthermore experimental simulations have been performed on realistic data to test the proposed decision model and to provide general recommendations. Several types of accidents were considered and the impacts of technical and financial parameters on the disproportion factor, possibly making a safety investment profitable from an economic perspective, are also investigated and discussed in this paper.
E-info
https://repository.uantwerpen.be/docman/iruaauth/69c143/131213.pdf
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