Marine transportation application of risk-based decision making
Decision making frequently involves determining parameters that are imbued with uncertainty. This sometimes involves the use of subjective, qualitative methods, such as a risk ranking matrix, in which consideration is given both to the probability of occurrence and the expected consequences of an ev...
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ftunivtasecite:oai:ecite.utas.edu.au:120725 2023-05-15T17:43:51+02:00 Marine transportation application of risk-based decision making Way, B Khan, FI Veitch, B 2014 application/pdf http://iamu-demo.annex.jp/ http://ecite.utas.edu.au/120725 en eng Australian Maritime College http://ecite.utas.edu.au/120725/1/120725 - Marine Transportation Application of Risk-Based Decision Making.pdf Way, B and Khan, FI and Veitch, B, Marine transportation application of risk-based decision making, Proceedings of the 15th Annual General Assembly of the International Association of Maritime Universities, IAMU AGA 2014, 27-30 October 2014, Launceston, Australia, pp. 224-232. ISBN 9780980639148 (2014) [Refereed Conference Paper] http://ecite.utas.edu.au/120725 Engineering Interdisciplinary Engineering Risk Engineering (excl. Earthquake Engineering) Refereed Conference Paper PeerReviewed 2014 ftunivtasecite 2019-12-13T22:19:47Z Decision making frequently involves determining parameters that are imbued with uncertainty. This sometimes involves the use of subjective, qualitative methods, such as a risk ranking matrix, in which consideration is given both to the probability of occurrence and the expected consequences of an event. These are found on the horizontal and vertical axes of the matrix; inside the matrix are blocks denoting the expected severity of the situation, with each block denoting risk levels, such as acceptable, moderate, serious, and critical. The decision maker makes a qualitative determination of both input parameters, and where the two intersect on the matrix determines the severity of the situation, which informs the action to be taken. The inputs (probability of loss and resulting damage) are typically imprecise. Recent research has criticized methods such as the risk ranking matrix as being ineffective and for giving users a false sense of security, which can have serious consequences at sea. One alternative is the use of Monte Carlo (MC) simulations. MC simulation is a quantitative risk analysis technique where the inputs, such as the probability of a loss event, are modelled as statistical probability density functions (PDFs) rather than given imprecise labels, such as low, medium, or high. Once the inputs have been characterized as PDFs, a MC simulation program can determine the expected outcome thousands of times using random numbers along with the PDFs to determine the actual values of each input parameter for each particular instance the simulation is run. This will result in thousands of outcomes being generated. The aggregation of these outcomes allows the decision maker to determine the outcomes for the worst case scenario, the best case scenario, and the most likely scenario, along with the statistical probability of each scenario. Such a tool is more powerful and informative than a risk ranking matrix. The paper begins with an overview of risk ranking matrices and associated problems. Next, we provide an overview of Monte Carlo simulation and explain its use in marine risk management situations. We then present a hypothetical case in which a Monte Carlo simulation is used to advise the course of action for a shipping company considering using the Northern Sea Route instead of the Suez Canal for shipping between Rotterdam and Yokohama. We conclude that the use of Monte Carlo simulation is a promising option for risk-based decision making at sea, that significant work is required in the area of characterizing input parameters as PDFs, and that training in the areas of probability and statistics should be an important part of the curriculum at MET institutions. Conference Object Northern Sea Route eCite UTAS (University of Tasmania) |
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eCite UTAS (University of Tasmania) |
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ftunivtasecite |
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English |
topic |
Engineering Interdisciplinary Engineering Risk Engineering (excl. Earthquake Engineering) |
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Engineering Interdisciplinary Engineering Risk Engineering (excl. Earthquake Engineering) Way, B Khan, FI Veitch, B Marine transportation application of risk-based decision making |
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Engineering Interdisciplinary Engineering Risk Engineering (excl. Earthquake Engineering) |
description |
Decision making frequently involves determining parameters that are imbued with uncertainty. This sometimes involves the use of subjective, qualitative methods, such as a risk ranking matrix, in which consideration is given both to the probability of occurrence and the expected consequences of an event. These are found on the horizontal and vertical axes of the matrix; inside the matrix are blocks denoting the expected severity of the situation, with each block denoting risk levels, such as acceptable, moderate, serious, and critical. The decision maker makes a qualitative determination of both input parameters, and where the two intersect on the matrix determines the severity of the situation, which informs the action to be taken. The inputs (probability of loss and resulting damage) are typically imprecise. Recent research has criticized methods such as the risk ranking matrix as being ineffective and for giving users a false sense of security, which can have serious consequences at sea. One alternative is the use of Monte Carlo (MC) simulations. MC simulation is a quantitative risk analysis technique where the inputs, such as the probability of a loss event, are modelled as statistical probability density functions (PDFs) rather than given imprecise labels, such as low, medium, or high. Once the inputs have been characterized as PDFs, a MC simulation program can determine the expected outcome thousands of times using random numbers along with the PDFs to determine the actual values of each input parameter for each particular instance the simulation is run. This will result in thousands of outcomes being generated. The aggregation of these outcomes allows the decision maker to determine the outcomes for the worst case scenario, the best case scenario, and the most likely scenario, along with the statistical probability of each scenario. Such a tool is more powerful and informative than a risk ranking matrix. The paper begins with an overview of risk ranking matrices and associated problems. Next, we provide an overview of Monte Carlo simulation and explain its use in marine risk management situations. We then present a hypothetical case in which a Monte Carlo simulation is used to advise the course of action for a shipping company considering using the Northern Sea Route instead of the Suez Canal for shipping between Rotterdam and Yokohama. We conclude that the use of Monte Carlo simulation is a promising option for risk-based decision making at sea, that significant work is required in the area of characterizing input parameters as PDFs, and that training in the areas of probability and statistics should be an important part of the curriculum at MET institutions. |
format |
Conference Object |
author |
Way, B Khan, FI Veitch, B |
author_facet |
Way, B Khan, FI Veitch, B |
author_sort |
Way, B |
title |
Marine transportation application of risk-based decision making |
title_short |
Marine transportation application of risk-based decision making |
title_full |
Marine transportation application of risk-based decision making |
title_fullStr |
Marine transportation application of risk-based decision making |
title_full_unstemmed |
Marine transportation application of risk-based decision making |
title_sort |
marine transportation application of risk-based decision making |
publisher |
Australian Maritime College |
publishDate |
2014 |
url |
http://iamu-demo.annex.jp/ http://ecite.utas.edu.au/120725 |
genre |
Northern Sea Route |
genre_facet |
Northern Sea Route |
op_relation |
http://ecite.utas.edu.au/120725/1/120725 - Marine Transportation Application of Risk-Based Decision Making.pdf Way, B and Khan, FI and Veitch, B, Marine transportation application of risk-based decision making, Proceedings of the 15th Annual General Assembly of the International Association of Maritime Universities, IAMU AGA 2014, 27-30 October 2014, Launceston, Australia, pp. 224-232. ISBN 9780980639148 (2014) [Refereed Conference Paper] http://ecite.utas.edu.au/120725 |
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1766146009222610944 |