Principles of Risk Analysis: Decision Making Under Uncertainty

848 Pages·2019·9.539 MB·English

by  Charles Yoe

Principles of Risk Analysis
Decision Making Under Uncertainty
Second Edition

Principles of Risk Analysis
Decision Making Under Uncertainty
Second Edition
Charles Yoe
CRC Press
Taylor & Francis Group
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Boca Raton, FL 33487-2742
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Library of Congress Cataloging-in-Publication Data
Names: Yoe, Charles E., author.
Title: Principles of risk analysis : decision making under uncertainty / Charles Yoe.
Description: Second edition. | Boca Raton : Taylor and Francis, CRC Press, 2019. |
Includes bibliographical references.
Identifiers: LCCN 2018044466| ISBN 9781138478206 (hardback : alk. paper) |
ISBN 9780429667619 (PDF) | ISBN 9780429664892 (ePub) | ISBN 9780429662171
(Mobi/Kindle)
Subjects: LCSH: Decision making. | Risk assessment.
Classification: LCC T57.95 .Y63 2019 | DDC 658.15/5--dc23
LC record available at https://lccn.loc.gov/2018044466
Visit the Taylor & Francis Web site at
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and the CRC Press Web site at
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In loving memory of Jason Charles Yoe

Contents
Preface...................................................................................................................xxix
About the Author ..................................................................................................xxxi
Chapter 1 The Basics ............................................................................................1
1.1 What is Risk? .............................................................................1
1.2 How Do We Identify a Risk? .....................................................4
1.2.1 Trigger ........................................................................4
1.2.2 Hazard or Opportunity ...............................................5
1.2.3 Consequence ...............................................................5
1.2.4 Sequence of Events .....................................................6
1.2.5 Uncertainty .................................................................6
1.3 What is Risk Analysis? ..............................................................6
1.3.1 Risk Management .......................................................9
1.3.2 Risk Assessment .......................................................10
1.3.3 Risk Communication ................................................10
1.3.4 Risk Semantics .........................................................11
1.4 Why Do Risk Analysis? ..........................................................11
1.5 Who Does Risk Analysis? .......................................................12
1.5.1 A Brief Historical Perspective on Risk Analysis .....12
1.5.2 Government Agencies ..............................................17
1.5.3 Private Sector ...........................................................19
1.6 When Should We Do Risk Analysis? ......................................20
1.7 Organization of Book ..............................................................22
1.8 Summary and Look Forward ..................................................25
References ..........................................................................................26
Chapter 2 Uncertainty .........................................................................................27
2.1 Introduction .............................................................................27
2.2 Uncertainty from 75,000 Feet .................................................29
2.3 The Uncertainty on Your Desk ................................................32
2.3.1 Knowledge Uncertainty or Natural Variability? ......33
2.3.2 Types of Uncertainty ................................................35
2.3.3 Quantity Uncertainty ................................................36
2.3.3.1 Empirical Quantities ...............................38
2.3.3.2 Defined Constants ...................................38
2.3.3.3 Decision Variables ..................................39
2.3.3.4 Value Parameters ....................................39
2.3.3.5 Index Variables........................................39
2.3.3.6 Model Domain Parameters .....................40
2.3.3.7 Outcome Criteria .....................................40
vii
viii Contents
2.3.4 Sources of Uncertainty in Empirical Quantities ......40
2.3.4.1 Random Error and Statistical
Variation ..................................................40
2.3.4.2 Systematic Error and Subjective
Judgment .................................................41
2.3.4.3 Linguistic Imprecision ............................41
2.3.4.4 Natural Variability ..................................42
2.3.4.5 Randomness and Unpredictability ..........42
2.3.4.6 Disagreement ..........................................42
2.3.4.7 Approximation ........................................42
2.4 Being Intentional about Uncertainty .......................................43
2.5 Summary and Look Forward ..................................................46
References ..........................................................................................46
Chapter 3 Risk Management ...............................................................................47
3.1 Introduction .............................................................................47
3.2 Identifying Risks .....................................................................49
3.2.1 Problem Recognition ................................................50
3.2.2 Problem Acceptance .................................................51
3.2.3 Problem Definition ...................................................52
3.2.4 From Problems and Opportunities to Risks .............53
3.3 Risk Estimation .......................................................................53
3.3.1 Establish a Risk Analysis Process ............................55
3.3.2 Individual Risk Management Activities ...................56
3.3.2.1 Develop a Risk Profile .............................56
3.3.2.2 Establish Risk Management Objectives ....58
3.3.2.3 Decide the Need for a Risk Assessment.....61
3.3.2.4 Request Information Needed ..................62
3.3.2.5 Initiate the Risk Assessment ...................66
3.3.2.6 Consider the Results of the Risk
Assessment ..............................................67
3.4 Risk Evaluation ........................................................................68
3.4.1 Principles for Establishing Acceptable and
Tolerable Levels of Risk ...........................................70
3.4.1.1 Policy .......................................................71
3.4.1.2 Zero Risk .................................................71
3.4.1.3 Weight of Evidence .................................72
3.4.1.4 Precautionary Principle ...........................72
3.4.1.5 ALARA Principle ...................................73
3.4.1.6 Appropriate Level of Protection..............73
3.4.1.7 Reasonable Relationship .........................74
3.4.1.8 Safety and Balancing Standards .............74
3.4.2 The Decision ............................................................75
3.5 Risk Control.............................................................................76
3.5.1 Formulating Risk Management Options ..................76
Contents ix
3.5.2 Evaluating Risk Management Options .....................79
3.5.2.1 Comparison Methods ..............................81
3.5.3 Comparing Risk Management Options ....................82
3.5.3.1 Multicriteria Decision Analysis ..............83
3.5.4 Making a Decision ...................................................85
3.5.5 Identifying Decision Outcomes ................................87
3.5.6 Implementing the Decision ......................................88
3.6 Risk Monitoring ......................................................................89
3.6.1 Monitoring ................................................................89
3.6.2 Evaluation and Iteration ...........................................91
3.7 Risk Communication ...............................................................92
3.8 Risk Management Models .......................................................92
3.9 Summary and Look Forward ..................................................97
References ..........................................................................................97
Chapter 4 Risk Assessment .................................................................................99
4.1 Introduction .............................................................................99
4.2 What Makes a Good Risk Assessment? ................................100
4.3 Risk Assessment Defined ......................................................104
4.4 Risk Assessment Activities....................................................107
4.4.1 Understand the Questions.......................................109
4.4.2 Identify the Source of the Risk ..............................111
4.4.3 Consequence Assessment .......................................112
4.4.3.1 Dose-Response Relationships ...............113
4.4.4 Likelihood Assessment ..........................................114
4.4.4.1 Exposure Assessment ............................115
4.4.5 Risk Characterization .............................................119
4.4.6 Assess Effectiveness of Risk Management Options ...119
4.4.7 Communicate Uncertainty .....................................121
4.4.8 Document the Process ............................................123
4.5 Risk Assessment Models .......................................................124
4.6 Risk Assessment Methods .....................................................129
4.6.1 Qualitative Risk Assessment ..................................130
4.6.2 Quantitative Risk Assessment ................................130
4.7 Summary and Look Forward ................................................131
References ........................................................................................131
Chapter 5 Risk Communication ........................................................................133
5.1 Introduction ...........................................................................133
5.2 Definitions .............................................................................137
5.3 Internal Risk Communication ...............................................138
5.3.1 Coordination between Assessors and Managers ....138
5.3.2 Risk Communication Process ................................140
5.3.3 Documenting the Process .......................................140