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Operational Safety Economics

Book Description

Describes how to make economic decisions regading safety  in the chemical and process industries

  • Covers both technical risk assessment and economic aspects of safety decision-making
  • Suitable for both academic researchers and practitioners in industry
  • Addresses cost-benefit analysis for safety investments

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Preface
  5. Disclaimer
  6. Acknowledgements
  7. List of Acronyms
  8. Chapter 1: Introduction
    1. 1.1 The “Why” of Operational Safety
    2. 1.2 Back to the Future: the Economics of Operational Safety
    3. 1.3 Difficulties in Operational Safety Economics
    4. 1.4 The Field of Operational Safety within the Profitability of an Organization
    5. 1.5 Conclusions
    6. References
  9. Chapter 2: Operational Risk, Operational Safety, and Economics
    1. 2.1 Defining the Concept of Operational Risk
    2. 2.2 Dealing with Operational Risks
    3. 2.3 Types of Operational Risk
    4. 2.4 The Importance of Operational Safety Economics for a Company
    5. 2.5 Balancing between Productivity and Safety
    6. 2.6 The Safety Equilibrium Situation or “HRO Safety”
    7. 2.7 The Egg Aggregated Model (TEAM) of Safety Culture
    8. 2.8 Safety Futures
    9. 2.9 The Controversy of Economic Analyses
    10. 2.10 Scientific Requirements for Adequate Economic Assessment Techniques
    11. 2.11 Four Categories of Data
    12. 2.12 Improving Decision-making Processes for Investing in Safety
    13. 2.13 Conclusions
    14. References
  10. Chapter 3: Economic Foundations
    1. 3.1 Macroeconomics and Microeconomics
    2. 3.2 Safety Demand and Long-term Average Cost of Production
    3. 3.3 Safety Value Function
    4. 3.4 Expected Value Theory, Value at Risk, and Safety Attitude
    5. 3.5 Safety Utilities
    6. 3.6 Measuring Safety Utility Functions
    7. 3.7 Preferences of Safety Management – Safety Indifference Curves
    8. 3.8 Measuring Safety Indifference Curves
    9. 3.9 Budget Constraint and n-Dimensional Maximization Problem Formulation
    10. 3.10 Determining Optimal Safety Management Preferences within the Budget Constraint for a Two-dimensional Problem
    11. 3.11 Conclusions
    12. References
  11. Chapter 4: Operational Safety Decision-making and Economics
    1. 4.1 Economic Theories and Safety Decisions
    2. 4.2 Making Decisions to Deal with Operational Safety
    3. 4.3 Safety Investment Decision-making – a Question of Costs and Benefits
    4. 4.4 The Degree of Safety and the Minimum Overall Cost Point
    5. 4.5 The Type I and Type II Accident Pyramids
    6. 4.6 Quick Calculation of Type I Accident Costs
    7. 4.7 Quick Calculation of Type II Accident Costs
    8. 4.8 Costs and Benefits and the Different Types of Risk
    9. 4.9 Marginal Safety Utility and Decision-making
    10. 4.10 Risk Acceptability, Risk Criteria, and Risk Comparison – Moral Aspects and Value of (Un)safety and Value of Human Life
    11. 4.11 Safety Investment Decision-making for the Different Types of Risk
    12. 4.12 Conclusions
    13. References
  12. Chapter 5: Cost-Benefit Analysis
    1. 5.1 An Introduction to Cost-Benefit Analysis
    2. 5.2 Economic Concepts Related to Cost-Benefit Analyses
    3. 5.3 Calculating Costs
    4. 5.4 Calculating Benefits (Avoided Accident Costs)
    5. 5.5 The Cost of Carrying Out Cost-Benefit Analyses
    6. 5.6 Cost-Benefit Analysis for Type I Safety Investments
    7. 5.7 Cost-Benefit Analysis for Type II Safety Investments
    8. 5.8 Advantages and Disadvantages of Analyses Based on Costs and Benefits
    9. 5.9 Conclusions
    10. References
  13. Chapter 6: Cost-effectiveness Analysis
    1. 6.1 An Introduction to Cost-effectiveness Analysis
    2. 6.2 Cost-effectiveness Ratio
    3. 6.3 Cost-effectiveness Analysis Using Constraints
    4. 6.4 User-friendly Approach for Cost-effectiveness Analysis under Budget Constraint
    5. 6.5 Cost-effectiveness Calculation Often Used in Industry
    6. 6.6 Cost–Utility Analysis
    7. 6.7 Conclusions
    8. References
  14. Chapter 7: Beyond the State-of the Art of Operational Safety Economics: Bayesian Decision Theory
    1. 7.1 Introduction
    2. 7.2 Bayesian Decision Theory
    3. 7.3 The Allais Paradox
    4. 7.4 The Ellsberg Paradox
    5. 7.5 The Difference in Riskiness Between Type I and Type II Events
    6. 7.6 Discussion
    7. 7.7 Conclusions
    8. References
  15. Chapter 8: Making State-of-the-Art Economic Thinking Part of Safety Decision-making
    1. 8.1 The Decision-making Process for an Economic Analysis
    2. 8.2 Application of Cost-Benefit Analysis to Type I Risks
    3. 8.3 Decision Analysis Tree Approach
    4. 8.4 Safety Value Function Approach
    5. 8.5 Multi-attribute Utility Approach
    6. 8.6 The Borda Algorithm Approach
    7. 8.7 Bayesian Networks in Relation to Operational Safety Economics
    8. 8.8 Limited Memory Influence Diagram (LIMID) Approach
    9. 8.9 Monte Carlo Simulation for Operational Safety Economics
    10. 8.10 Multi-criteria Analysis (MCA) in Relation to Operational Safety Economics
    11. 8.11 Game Theory Considerations in Relation to Operational Safety Economics
    12. 8.12 Proving the Usefulness of a Disproportion Factor (DF) for Type II Risks: an Illustrative (Toy) Problem
    13. 8.13 Decision Process for Carrying Out an Economic Analysis with Respect to Operational Safety
    14. 8.14 Conclusions
    15. References
  16. Chapter 9: General Conclusions
  17. Index
  18. End User License Agreement