Acceptable risk cost-benefit analysis

The Safety Goal Policy Statement was published to define acceptable radiological risk IVom nuclear power plant operation, and by implication provide a de minimus risk to be assured without cost considerations. Safety beyond the minimum requires cost-benefit analysis. Since being promulgated, bulletins and generic letters have been imposed to enhance safety, under the provisions of 10 CFR 50.109, the Backfit Rule. 

Tang Tomlin (2008) sum up previous research on why risk reduction efforts are not widespread, although there is a wide acceptance of the existence of supply chain risk 1) Firms do not know how to manage supply chain risks, and 2) Firms lack credible estimates of the cost of a disruption, obstructing a formal cost/benefit analysis to justify risk reduction benefits (Rice Jr Caniato 2003 Zsidisin et al. 2004). These are questions which our assessment will be helping to... 

The consequences and frequency of a hazard or loss that is considered to be as low as reasonably practical or tolerable by an individuak organization, society, or authorities in view of the social and political implications, scientific and technical review, and economic cost-benefit analysis. It may also be called Acceptable Risk. 

Use of PSA. The results of an adequate PSA that is acceptable to the regulatory body may be used as a measure of the risk posed by any of the unresolved shortcomings. Information from a PSA is clearly helpful, but the uncertainties in data and techniques do not allow decisions on continued operation or plant shutdown to be made on the basis of PSA results alone. However, PSA results may provide an acceptable basis for determining, in the framework of a cost-benefit analysis, whether a corrective action is a mandatory prerequisite for continued operation. 

Cost benefit analysis This is a numerical exercise done to assess the cost of implementing a particular modification and/or design change and comparing the same against the benefit (risk reduction) achieved out of it. It is one of the tools, but cannot be the sole tool to judge whether risk reduction means is acceptable or not. 

LOPA allows determination of IPL effectiveness, and often identifies acceptable alternatives to the SIS, with the help of other IPLs such as mechanical/physical IPL (e.g., relief devices). It allows cost/benefit analysis, for selecting alternatives for risk reduction. 

Acceptable Risk An acceptable level of risk for regulations and special permits is established by consideration of risk, cost/benefit and public comments. Relative or comparative risk analysis is most often used where quantitative risk analysis is not practical or justified. Public participation is important in a risk analysis process, not only for enhancing the public s understanding of the risks associated with hazardous materials transportation, but also for insuring that the point of view of all major segments of the population-at-risk is included in the analyses process. 

This chapter deals with flood risk analysis and assessment. The conceptual model source pathway receptor consequence for flood risk analysis is presented and its components are analyzed. The methodology to extract the predicted probability of coastal flooding from risk sources and pathways, as well as the expected damages from risk receptors axe introduced and examined. Reliability analysis of a coastal system is also briefly discussed. Quantitative methods to define acceptable flooding probabilities on the level of the protected area are presented. Tools such as cost-benefit analysis, utihty models, and the life quality index are introduced to define the tolerable risk of flooding. 

Three criteria were developed to define acceptable risk the personal acceptance of risks, the social acceptance, and the economic criterion. Maximum allowable probabilities of exceedance for all possible consequences and all risk categories are given in the literature. Three commonly used quantitative methods to define acceptable flooding probabilities on the level of the protected area are cost-benefit analysis, utility analysis, and life quality analysis. 

To support the argument that the safety risk emerging from the system is ALARP, it is also necessary to demonstrate the practicability argument by carrying out a cost-benefit analysis to assess and compare the costs of any proposed changes to the system against the reduction in risk levels inclusive of the acceptance/rejection criteria. 

Tolerable. The exploitation of water source is heavily limited. If water source is to be used for the emergency supply of population, it is necessary to implement countermeasures in order to reduce the risk on the acceptable level. The costs of reducing the risk have to be adequate for the value of protected source element and the social benefit. In this case it is recommended to apply the Cost-Benefit Analysis method, possibly a multi-criteria assessment, which will enable us to assess the effectiveness of particular countermeasures being taken. 

The risk of a critical event is thus Risk Class B, which is considered as being undesirable , and shall only be accepted when risk reduction is impracticable. A cost-benefit analysis may just result in no further action being taken to mitigate this hazard. 

Note that even risks which are considered to be low and might otherwise be taken as acceptable by default still require mitigation if this is at all possible. The seemingly bottomless pit of risk mitigation can be qualified by a risk benefit analysis, i.e. the ability to justify the risk against the product s benefits rather than the cost or effort of further risk reduction. The risk benefit analysis also needs to include the benefits of using an alternative product. 

This strategy has the advantage that it leads to direct risk reduction at comparatively low cost—even if the risk is possibly already below an admissible boundary value. The problem, however, of defining the benefits and costs entered into the analysis cannot be solved without arbitrariness. On the other hand, the attempt which may be necessary under certain circumstances to express the loss due to fatal accident in terms of money [9-29], [9-30], with its uninhibited calculating character ( Dollar per fatality ) may not be a means toward stimulation of public acceptance. 

The next step in the risk analysis is responding to the risk. Result of the risk assessment process is used to make a decision on acceptance, minimization, avoidance or reducing risk. On this basis cost and benefits analyzes and strategies as well as responding to the risk plans are created. 

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