Risk Analysis: Assessing Uncertainties Beyond Expected Values and Probabilities Book

Preface ix

Part I Theory and methods 1

1 What is a risk analysis? 3

1.1 Why risk analysis? 5

1.2 Risk management 6

1.2.1 Decision-making under uncertainty 8

1.3 Examples: decision situations 13

1.3.1 Risk analysis for a tunnel 13

1.3.2 Risk analysis for an offshore installation 14

1.3.3 Risk analysis related to a cash depot 14

2 What is risk? 17

2.1 Vulnerability 21

2.2 How to describe risk quantitatively 22

2.2.1 Description of risk in a financial context 24

2.2.2 Description of risk in a safety context 25

3 The risk analysis process: planning 29

3.1 Problem definition 29

3.2 Selection of analysis method 34

3.2.1 Checklist-based approach 35

3.2.2 Risk-based approach 36

4 The risk analysis process: risk assessment 39

4.1 Identification of initiating events 39

4.2 Cause analysis 40

4.3 Consequence analysis 41

4.4 Probabilities and uncertainties 43

4.5 Risk picture: Risk presentation 44

4.5.1 Sensitivity and robustness analyses 48

4.5.2 Risk evaluation 49

5 The risk analysis process: risk treatment 51

5.1 Comparisons of alternatives 51

5.1.1 How to assess measures? 53

5.2 Management review and judgement 55

6 Risk analysis methods 57

6.1 Coarse risk analysis 57

6.2 Job safety analysis 62

6.3 Failure modes and effects analysis 64

6.3.1 Strengths and weaknesses of an FMEA 69

6.4 Hazard and operability studies 70

6.5 SWIFT 71

6.6 Fault tree analysis 72

6.6.1 Qualitative analysis 74

6.6.2 Quantitative analysis 76

6.7 Event tree analysis 78

6.7.1 Barrier block diagrams 80

6.8 Bayesian networks 80

6.9 Monte Carlo simulation 83

Part II Examples of applications 85

7 Safety measures for aroad tunnel 87

7.1 Planning 87

7.1.1 Problem definition 87

7.1.2 Selection of analysis method 88

7.2 Risk assessment 88

7.2.1 Identification of initiating events 88

7.2.2 Cause analysis 90

7.2.3 Consequence analysis 90

7.2.4 Risk picture 94

7.3 Risk treatment 95

7.3.1 Comparison of alternatives 95

7.3.2 Management review and decision 95

8 Risk analysis process for an offshore installation 97

8.1 Planning 97

8.1.1 Problem definition 97

8.1.2 Selection of analysis method 98

8.2 Risk analysis 98

8.2.1 Hazard identification 98

8.2.2 Cause analysis 98

8.2.3 Consequence analysis 100

8.3 Risk picture and comparison of alternatives 103

8.4 Management review and judgement 104

9 Production assurance 105

9.1 Planning 105

9.2 Risk analysis 105

9.2.1 Identification of failures 105

9.2.2 Cause analysis 106

9.2.3 Consequence analysis 106

9.3 Risk picture and comparison of alternatives 108

9.4 Management review and judgement Decision 109

10 Risk analysis process for a cash depot 111

10.1 Planning 111

10.1.1 Problem definition 111

10.1.2 Selection of analysis method 112

10.2 Risk analysis 113

10.2.1 Identification of hazards and threats 113

10.2.2 Cause analysis 113

10.2.3 Consequence analysis 116

10.3 Risk picture 118

10.4 Risk-reducing measures 120

10.4.1 Relocation of the NOKAS facility 120

10.4.2 Erection of a wall 121

10.5 Management review and judgment Decision 121

10.6 Discussion 122

11 Risk analysis process for municipalities 123

11.1 Planning 123

11.1.1 Problem definition 123

11.1.2 Selection of analysis method 124

11.2 Risk assessment 124

11.2.1 Hazard and threat identification 124

11.2.2 Cause and consequence analysis Risk picture 125

11.3 Risk treatment 128

12 Risk analysis process for the entire enterprise 131

12.1 Planning 131

12.1.1 Problem definition 131

12.1.2 Selection of analysis method 132

12.2 Risk analysis 132

12.2.1 Price risk 132

12.2.2 Operational risk 135

12.2.3 Health, Environment and Safety (HES) 137

12.2.4 Reputation risk 138

12.3 Overall risk picture 140

12.4 Risk treatment 141

13 Discussion 143

13.1 Risk analysis as a decision support tool 143

13.2 Risk is more than the calculated probabilities and expected values 144

13.3 Risk analysis has both strengths and weaknesses 145

13.3.1 Precision of a risk analysis: uncertainty and sensitivity analysis 145

13.3.2 Tenninology 147

13.3.3 Risk acceptance criteria (tolerability limits) 149

13.4 Reflection on approaches, methods and results 152

13.5 Limitations of the causal chain approach 152

13.6 Risk perspectives 154

13.7 Scientific basis 157

13.8 The implications of the limitations of risk assessment 159

13.9 Critical systems and activities 161

13.10 Conclusions 166

A Probability calculus and statistics 167

A.1 The meaning of a probability 167

A.2 Probability calculus 168

A.3 Probability distributions: expected value 170

A.3.1 Binomial distribution 171

A.4 Statistics (Bayesian statistics) 172

B Introduction to reliability analysis 173

B.1 Reliability of systems composed of components 173

B.2 Production system 175

B.3 Safety system 175

C Approach for selecting risk analysis methods 177

C.1 Expected consequences 177

C.2 Uncertainty factors 179

C.3 Frame conditions 179

C.4 Selection of a specific method 180

D Terminology 183

D.1 Risk management: relationships between key terms 186

Bibliography 187

Index 193