Cost-risk-benefit approach

Regarding risk-based safety criteria, the philosophical basis of safety and risk in hazardous civilian industries is well understood and numerically defined. Perhaps, for combat aircraft, there should also be a flrst-principles-based set of risk criteria, particular to combat aircraft and equipment, using a cost-risk-benefit approach, which addresses both initial design and subsequent modification work in the context of combat risk. Existing defence safety standards, such as the UK s Def Stan 00-56, rely heavily on civilian safety standards. This seems unrealistic. (At time of writing, Def Stan 00-56 is under review.)... 

J.1 Commonly Adopted Approaches That Have Been Tried [4] 30J.1.1 Cost-risk-benefit Analysis... 

For food safety purposes the overriding aim is that food contamination should be reduced to the lowest practicable level, bearing in mind the potential costs and benefits involved. Since it is difficult to establish cause and effect relationships following long-term (chronic) exposure at low concentrations, it may be necessary to base action on prudence rather than on proven harm to health. However, if this approach is to maintain the confidence of both consumers and producers of food, a rational evaluation of all relevant information is required so that the balance between the risks and benefits of veterinary drugs can be assessed. Information on the incidence of potentially harmful drug residues is fundamental to this cost-benefit analysis so too is the consumption of the commodities involved (particularly for susceptible consumers or those consumers who eat more). Account must also be taken of the potential fall in food production if a drug is controlled or prohibited, and also the animal health and welfare implications that may result from the restriction of an animal medicine for which there may be no effective alternative. 

A definition of unreasonable risk was deliberately omitted from H.R. 15003, the bill passed by the House, and this omission was carried forward into the final version of the Act by the Conference Committee. The House s reasons for omitting a definition of unreasonable risk, however, do not reflect a rejection of the Senate s cost-benefit approach. As the House Committee on Interstate and Foreign Commerce explained ... 

In order to evaluate the possible benefits due to the implementation of LPG tankers protections, besides safety and risk issues, it is important to consider also the economic aspects. Hence, in the followings an approach to identify and compare coating costs and benefits is described. These were assessed in the form of monetary quantities (by a common currency and on the base of a common temporal period) in order to determine if the LPG tanker coating involves an higher amount of costs or benefits by the comparison. 

In addition to the development of CIBOCOF, an approach known as value driven maintenance policy (VDMP) was established in order to show the hidden values of maintenance and how organisadmis can benefit from these values [23]. In terms of VDMP, value is defined as the delivery of maximum availability at minimum cost [28]. The approach was developed using principles and concepts from TPM, RCM and risk-based inspection (RBI), and it requires an organisation to concentrate on the dynamic prospects for value creation using appropriate steps/ techniques instead of using a one method fits all approach [29]. The steps used to implement VDMP include [30] ... 

Emmett,E. andElicklmg, C. (1995). Integrating Management Systems and Risk Management Approaches. Journal of Occupational Health and Safety - Aust. NZ, 11(6), 617-24. Everley, M. (1995). The Price of Cost Benefit. Health and Safety at Work, 17(9), 13-15. Eladdock, C. (2003). Managing Risks in Outdoor Activities. 2nd edn. Wellington NZ Mountain Safety Council Inc. 

The method adopted in many industries is to use a Value of Preventing a Fatality (VPF). The VPF is the amount that an organisation will spend to reduce risk by a single fatality, and is used in cost benefit analysis (CBA) to assess reasonable practicability. The costs and benefits of a potential risk control are evaluated, and if the cost per life saved is less than or roughly equal to the VPF, the risk control is regarded as reasonably practicable and must therefore be implemented. The quantitative approach was formalised by the Health and Safety Executive (HSE) in its 1988 paper (updated in 1992) The Tolerability of Risk from Nuclear Power Stations and its 1989 paper Quantified Risk Assessment its Input to Decision Making Whilst the 1988 paper was developed for the nuclear industry, its principles have been applied widely. 

In addition to the multi-criteria representation of the problem, relationships between projects, companies, and products should be taken into account. In such assessments, premium cost and maximal insured value can be found using Multi-Objective Decision-Making (MODM) methods and solving as a multi-criteria optimization problem (Figure 5.2) the same criteria can be reused for insurance portfolio optimization, and in the case of discrete alternatives (premium cost or insured value), the Multi-Attribute Decision-Making (MADM) approach can be used. Different risk assessment approaches can be adapted for MCDM for example, product lifecycle can be presented in detail and/or insured accidents can be presented implicitly along with business opportunities and other benefits. 

The benefit of a risk-based approach, compared to the other approaches to design or decision making, is that it deals with outcomes. A risk-based approach enables informed choices to be made based on comparison of the expected outcomes and costs of alternative courses of action. This is distinct from, for example, a standards-based approach that focuses on the severity of the load that a particular flood defence is expected to withstand. Using a risk-based approach, risk assessment often involves more complete representation of the flood/erosion system. This more holistic approach will be able to account for (a) complex physical mechanisms, spatial, and temporal variations in natural hazards (e.g., natural variability in wind, wave, rainfall, and water level conditions) (b) descriptions based on sparse/incomplete data and (c) multiple stakeholders with differing, often conflicting, values and objectives. ... 

In this study assessments of individual road bridges exposed to accidental situations are discussed from a general point of view. Stewart (2010) recommended cost-benefit and other risk-based approaches particularly for low probability-high consequence events where public safety is a key criterion for decision making. That is why methodology of the risk optimisation based on Bayesian networks is developed here. It is noted that the terminology accepted in Eurocodes (EN 1990 2002 for the basis of structural design and EN 1991-1-7 2006 for accidental actions) and other European documents DIRECTIVE 2008 114 EC and Communication COM(2006) 786) is adopted. 

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