Transcription of RISK ANALYSIS AND MANAGEMENT. BASIC CONCEPTS …
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RISK ANALYSIS AND MANAGEMENT. BASIC CONCEPTS …
Terje Aven RISK ANALYSIS AND management . BASIC CONCEPTS AND principles R&RATA # 1 (12) ( ) 2009, March - 57 - RISK ANALYSIS AND management . BASIC CONCEPTS AND principles T. Aven University of Stavanger, Norway e-mail: ABSTRACT This paper reviews and discusses some key concept and principles of risk ANALYSIS and risk management , based on a set of statements, formulated as myths about risk. Examples of such myths are: risk is equal to the expected value, risk equals uncertainty, risk can be expressed by probabilities, risk is equal to an event, risk acceptance criteria contribute to obtaining a high safety standard, and ALARP can be verified by cost-benefit analyses. It is concluded that risk needs to address both the consequences and the uncertainties about the consequences, and that it is necessary to see beyond expected values and probabilities.
Terje Aven – RISK ANALYSIS AND MANAGEMENT. BASIC CONCEPTS AND PRINCIPLES R&RATA # 1 (12) (Vol.2) 2009, March - 59 - Yes, it is likely that if C is the sum of a number of projects, or some average number, our
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