Abstract
This paper describes how risk-based risk control allocation model works. We begin by discussing the economic rational for allocating risk control in a diversified organization like enterprises. The direct and indirect losses caused by the simulated disasters can be estimated using the engineering and financial analysis model. Basing on the model, we can generate exceeding probability (EP) curve and then calculate how much loss will be ceased or transferred to other entities, if somehow spending budgets on risk control actions. Results from the proposed formulations are compared in case studies. The model attempts to apply risk based budget guidelines to risk reduction measurement with a portfolio-based risk framework.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Du, X., Chen, W.: An Integrated Methodology for Uncertainty Propagation and Management in Simulation-Based Systems Design. American Institute of Aeronautics and Astronautics Journal 38(8), 1471–1478 (2000)
Melchers, R.E.: Structural Reliability Analysis and Prediction. John Wiley and Sons, Chichester, England (1999)
Dimitris, P.: Estimation of downtime related revenue losses in seaports following scenario earthquakes. Stanford, CA. Ph.D. Dissertation, Department of Civil and Environmental Engineering, Stanford University (2004)
Werner, S., Dikenson, S., Taylor, C.: Seismic risk reduction at ports. Journal of Waterway, Port, Coastal and Ocean Engineering 123, 337–346 (1997)
Mong, S.: Estimating Aggregate Loss Probability and Increased Limit Factor. Pricing Property and Casualty Insurance Products, Casualty Actuarial Society 1980 Discussion Paper Program, 358 (1980)
Sommer, D.W.: The Impact of Firm Risk on Property-Liability Insurance Prices. Journal of Risk and Insurance 63, 501–514 (1996)
James, C., RAROC,: Based Capital Budgeting and Performance Evaluation: A Case Study of Bank Capital Allocation. Wharton Working Paper, 96-40 (1996)
Wu,Y.T., Shin,Y., Sues, R., Cesare, M.: Safety-Factor based Approach for Probabilistic- based Design optimization. In: 42nd AIAA /ASME /ASCE /AHS /ASC Structures, Structural Dynamics and Materials Conference and Exhibit, Seattle Washington (2001)
Birge, J.R., Louveaux, F.: Introduction to Stochastic Programming. Springer, Heidelberg (1997)
Author information
Authors and Affiliations
Editor information
Rights and permissions
Copyright information
© 2007 Springer Berlin Heidelberg
About this paper
Cite this paper
Tseng, CP., Chen, CW., Yeh, K., Chiang, WL. (2007). Intelligent Financial Decision Model of Natural Disasters Risk Control. In: Huang, DS., Heutte, L., Loog, M. (eds) Advanced Intelligent Computing Theories and Applications. With Aspects of Theoretical and Methodological Issues. ICIC 2007. Lecture Notes in Computer Science, vol 4681. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-74171-8_6
Download citation
DOI: https://doi.org/10.1007/978-3-540-74171-8_6
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-74170-1
Online ISBN: 978-3-540-74171-8
eBook Packages: Computer ScienceComputer Science (R0)