Risk management cost-benefit analysis

Elements of Risk Management Cost/Benefit Analysis... 

The systematic application of policies, practices, and resources to the assessment and control of risk affecting human health and safety and the environment, which is also combined with economic, political, legal, and ethical considerations to make decisions. Hazard, risk, and cost-benefit analysis are used to support development of risk reduction options, program objectives, and prioritization of issues and resources. Risk Management Plan (RMP)... 

Political risks are usually difficult to forecast and can hardly be managed. Cost-benefit analysis... 

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 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. 

This long-term view of the costs and benefits of TSCA, why these cannot be quantified and how they may be managed better, characterizes the chapter by the Conservation Foundation s J.C. Davies. His critique of cost-benefit analysis contrasts that of D.W. North. Regardless, he lists separately some benefits and costs of TSCA. As to new chemicals, there is very limited evidence that unreasonable risks may have been averted from a few new chemicals. In general, aside from systems for defining new chemicals and monitoring these, if needed, he finds no significant benefits in this area of TSCA. 

A requirement to provide a Substitution Plan with all applications for an authorisation will prevent unnecessary requests for authorisation and focus attention on safer chemicals. If substitution is not currently feasible for a particular use, the use of an authorised chemical would be allowed under a strict risk management regime, providing social need could be demonstrated and a positive cost/benefit analysis provided. The authorisation would be time-limited to allow the development of safer substitutes, and manufacturers and/or users would be required to produce a substitution development plan to enable substitution to take place before the authorisation expires. 

In the fire risk assessment, it is important to reevaluate the risk once options for mitigation are determined. The amount of risk reduction should be calculated for each option or combination of options. Often, the results indicate that some options do not provide much, if any, risk reduction. The use of cost benefit analysis can help management in deciding which option to select. Facilities that depend exclusively on the local fire department for fire protection should complete a fire hazard analysis to determine the appropriate fire protection. 

Risk management is the decision-making process that follows the completion of a risk assessment. The risk assessment provides important information that supports decision-making and is integrated with other factors, including economic, feasibility, and cost-benefit analysis, in the risk management process. 

Cost/Benefit Analysis Since any change or modification in the process requires additional capital, operation, and maintenance cost, a cost analysis must be included to help management make informed decisions. These factors may include cost avoidance, enhanced productivity, and decreased liability risks from the pollution prevention effort. Federal and state agencies have provided matching grants to small industries to implement source reduction programs. 

Although the cost-benefit analysis of nutrition intervention is weak, the issue that seems clear is that malnutrition is associated with significant morbidity and mortality in numerous disease states and clinical settings. Furthermore, it is likely that improved patient outcomes can be achieved by a systematic approach to identify the presence of risk factors for malnutrition, quantitate the degree of malnutrition, and initiate nutrition management. The clinician s responsibilities in the management of nutrition disease include the following ... 

It is probably safe to say that the more people or interior area a building protection system saves from exposure to a release, the better the system is. It is not plausible to say unequivocally that the cheaper the system, the more desirable it is, or vice versa. For cost to be used as a criterion for evaluation, it has to be considered in terms of benefits received. This is known as cost-benefit analysis and is used frequently in the decision-making process by federal agencies (White House, 1992). A detailed discussion of cost and its role in risk assessment, risk management, and decision making can be found in Chapter 6. 

Action— Risk is reduced by concrete actions specific to your hazardous materials transport operations. Actions are based on risks, costs, and benefits, factoring in such realistic considerations as technical feasibility, ease of implementation, budgets, competition, regulatory burden, and legal constraints. Action is the heart of effective risk management. Planning and analysis, while necessary, do not reduce risk. Actions do. Adopt a bias for action. 

Cost-Benefit Analysis Part of the management decision-making process in which the costs and benefits of each risk reduction option are compared and the most appropriate alternative is selected. 

CBA, cost-benefit analysis DMC, direct material consumption DMI. direct material input EF. ecological footprint EIA, environmental impact assessment EMS, environmental management system En. energy analysis lOA, input-output analysis LCA, lifecycle assessment LCC. life cycle costing MFA, material flow accounting MIPS material intensity per unit service RA, risk assessment SEA. strategic environmental assessment SEEA system of economic and environmental accounts SFA, substance flow analysis TMR. total material requirement. 

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... 

Cost benefit analysis techniques have been developed in recent years, as decisions concerning risk management have been made on a cost versus risk basis - i.e. so far as is reasonably practicable. 

Flood risk management includes the analysis and assessment of risks and the formulation and implementation of risk reduction options. Risk analysis includes hazard as well as vulnerability determination and estimates the integral risk. Risk assessment deals with the evaluation and weighing of costs and benefits to derive a tolerable level of risk, taking risk perception into accoimt. Risk reduction deals with planned and realized measures and instruments supposed to decrease risks before (pre-flood), during the event and after an event (post-flood). Figure 38.1 shows the three tasks included in flood risk management. 

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