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Author:Porthin, Markus
Title:Advanced Case Studies in Risk Management
Avancerade fallstudier i riskhantering
Publication type:Master's thesis
Publication year:2004
Pages:vi + 57      Language:   eng
Department/School:Teknillisen fysiikan ja matematiikan osasto
Main subject:Sovellettu matematiikka   (Mat-2)
Supervisor:Salo, Ahti
Instructor:
OEVS:
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Location:P1 Ark TF80     | Archive
Keywords:risk management
case study
risk measures
comparative analysis
risk management process
riskhantering
fallstudie
riskmått
jämförande analys
riskhanteringsprocess
Abstract (eng): The word risk is used to describe a situation that involves a possibility of something undesired to happen.
The systematic process of identifying, evaluating and reducing risks is usually referred to as risk management (RM).
The forerunner applications of modern RM emerge from the military, nuclear power production and finance from where the methods have subsequently spread to every field where significant unwanted uncertainties exist.
Although risk is pervasive, the methods and their usage depend on the context.
Therefore, the case method is a powerful tool in teaching RM.

This thesis presents four educational RM case studies compiled by the author.
The studies are aimed to show graduate students how some centrallUv1 methods may be used in practice and give insight in the general principles of RM.
The whole process from risk identification to evaluation of implemented solutions is described.
To give a multifaceted view, the cases include risk situations from different fields: poultry production, electricity retailing, mining and pension insurance business.
Also a comparative analysis of the cases is conducted, where causal relationships between different properties are identified.
Using the insight learnt from the cases, general guidelines and structural outlines concerning risk management are suggested.

A comparative analysis of the cases highlight that the RM method selection does not only depend on the modelling properties of the phenomena and the type of loss, but also on the traditions in each field.
Seemingly different fields dealing with mathematically similar phenomena could gain from interaction and exchanging of methods.
Based on the type of available information, rough guidelines for when to use frequentist, Bayesian or expert elicitation methods in probability assessments is drawn.
The precautionary principle should be practised in cases with significant incertitude, where a formal risk assessment cannot be conducted.
The comparative analysis supports also the intuitive assumption that the extent of governmental RM through regulations depends on the ubiquity and influence of the risk.
The case studies can be found at http://www.sal.hut.fi/Web-Activities/RM/.
ED:2004-11-26
INSSI record number: 26521
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