Quantitative risk analysis benefits

Covernment and regulatoi y decisions. Sometimes these decisions are based on some type of quantitative risk analysis, and they provide some guidance on society s expectations with regard to risk management. In some cases these decisions will also include some kind of cost-benefit analysis. The current political climate in the United States may encourage more extensive use of risk analysis in the establishment of future regulations. 

Qualitative answers to one or more of these questions are often sufficient for making good decisions about the allocation of resources for safety improvements. But, as managers seek quantitative cost/benefit information upon which to base their decisions, they increasingly turn their attention to the use of quantitative risk analysis (QRA). 

One of the major benefits of a semi-quantitative risk analysis is that the technique can be applied and results understood by a wide range of stakeholders in the transportation field. Unlike full quantitative approaches, these types of risk analyses do not require specialized risk management experts. Even with the ease of application, however, personnel involved in these activities need to be knowledgeable in the operations under evaluation and the use of semi-quantitative... 

Figure 7.3 shows another example that compares a base case level of operational risk with two risk reduction options using quantitative risk analysis techniques. This F-N curve from Chapter 5 illustrates that both options reduce the likelihood and the potential maximum consequence(s). However, Option 2 results in the greatest risk reduction benefits of lower maximum impacts and lower frequencies. Since both options result in risk reduction, as compared to the baseline, an additional cost-benefit analysis would be required to determine which (if either) of these two options should be considered for implementation. 

In addition to the risk reduction benefits, the costs of risk mitigation options need to be evaluated. Due to the uncertainties associated with semi-quantitative and quantitative risk analysis results, a relative risk comparison, as compared to absolute measures of risk and benefits, is recommended. To conduct this type of relative comparison, incremental risk analysis can be used to evaluate the cost effectiveness of risk mitigation options, or determine the optimal combination of risk mitigation options. Figure 7.4 illustrates example results of this type of analysis, and uses the options from the F-N curve in Figure 7.3 as the basis for comparison. 

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 paper will summarize briefly some work my colleagues and I at Decision Focus Incorporated have carried out for EPA to show how decision analysis might be used to assist decision making under TSCA ( 5). I will first briefly review the concepts of quantitative risk assessment and cost-benefit analysis to show how decision analysis fits with these concepts and provides a natural way of extending them. Then I will illustrate the approach using a case study on a specific chemical, perchloroethylene. 

Once a set of recommendations has been developed, the options must be analyzed to determine the benefits, or essentially the level of risk reduction. The risk analysis method utilized to assess the baseline operational risks should be the same method used to analyze each of the potential risk mitigation options. Therefore, if a semi-quantitative technique was used to assess the baseline risk, then the same assumptions, techniques, and risk evaluation criteria (risk matrix, risk index, etc.) should be used to evaluate the effectiveness of the risk reduction options. 

Holden WL, Juhaeri J, Dai W. Benefit-risk analysis A proposal using quantitative methods. Pharmacoepidemiology and Drug Safety October 2003 12(7) 611-616. 

Mussen F, Salek S, Walker S. A quantitative approach to benefit-risk assessment of medicines— Part 1 The development of a new model using multidecision analysis. Pharmacoepidemiology and Drug Safety July 2007 16 (Suppl. 1) S2-S15. 

Cohen JT, Bellinger DC, Connor WE, Kris-Etherton PM, Lawrence RS, Savitz DA (2005) A quantitative risk-benefit analysis of change in population fish consumption. Am J Prev Med 29 325-334... 

Although intrinsically contained, the complexity could lead to operator error and automation of the valve sequencing could be beneficial. Jefferis and Schlager applied a quantitative risk assessment technique based on a fault tree analysis to a similar bioreactor sampling valve assembly. Their analysis illustrated the benefits of automation. 

ALARP concept basically comes from the British health and safety system (Act 1974)- It is not in true sense a quantitative method, although cost—benefit analysis is often used to get ALARP. It is a challenging subjective method, as it requires duty holders and others to exercise their judgment very carefully. In risk analysis, three factors play important role, viz. trouble, time, and cost. The breakeven point in... 

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. 

Approval of a system is usually based on safety first principle, i.e., a quantitative risk assessment (QRA) and also the cost effectiveness (cost-benefit analysis)... 

Where a major decision regarding cost or safety implication has to be made, it has become increasingly difficult to defend the traditional qualitative process called engineering judgement . Thus, there has been a steady trend towards quantifying risks and/or costs, in particular the techniques of HAZard IDentification (HAZID), Quantitative Risk Assessment (QRA) and Cost-Benefit Analysis (CBA), have come very much to the fore. 

Process Hazards Analysis. Analysis of processes for unrecogni2ed or inadequately controUed ha2ards (see Hazard analysis and risk assessment) is required by OSHA (36). The principal methods of analysis, in an approximate ascending order of intensity, are what-if checklist failure modes and effects ha2ard and operabiHty (HAZOP) and fault-tree analysis. Other complementary methods include human error prediction and cost/benefit analysis. The HAZOP method is the most popular as of 1995 because it can be used to identify ha2ards, pinpoint their causes and consequences, and disclose the need for protective systems. Fault-tree analysis is the method to be used if a quantitative evaluation of operational safety is needed to justify the implementation of process improvements. 

Qualitative findings of ecosystem risk assessments are of low utility for risk management. They cannot be compared with quantitative estimates of other risks this compromises the ability of risk ranking to provide insights to setting priorities. It is particularly difficult to convert them into a format applicable for cost-benefit analysis, which is a key tool that any proponent uses in decision-making on a proposed project. 

Both qualitative and quantitative evaluation techniques may be used to consider the risk associated with a facility. The level and magnitude of these reviews should be commensurate with the risk that the facility represents. High value, critical facilities or employee vulnerability may warrant high review levels. While unmanned "off-the-shelf, low hazard facilities may suffice with only a checklist review. Specialized studies are performed when in-depth analysis is needed to determine the cost benefit of a safety feature or to fully demonstrate the intended safety feature has the capability to fully meet prescribed safety requirements. 

Usually, the main purpose of meta-analysis is quantitative. The goal is to develop better overall estimates of the degree of benefit achieved by specific exposure and dosing techniques, based on the combining (pooling) of estimates found in the existing studies of the interventions. This type of meta-analysis is sometimes called a pooled analysis (Gerbarg and Horwitz, 1988) because the analysts pool the observations of many studies and then calculate parameters such as risk ratios or odds ratios from the pooled data. 

The extent of accommodation and characterization of uncertainty in exposure assessment must necessarily be balanced against similar considerations with respect to hazard, since the outcome of any risk assessment is a function of comparison of the two. If, for example, there is limited information to inform quantitatively on hazard and, as a result, a need to rely on defaults, there is limited benefit to be gained in developing the exposure analysis such that any increase in certainty is cancelled by uncertainties of greater magnitude associated with quantification of critical hazard, as a basis for a complete risk assessment. 

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