Search results for: Risk Management Process

Authors: Jawad Makki, Anne-Marie Alquier, Violaine Prince

Abstract:

In this paper we propose an NLP-based method for Ontology Population from texts and apply it to semi automatic instantiate a Generic Knowledge Base (Generic Domain Ontology) in the risk management domain. The approach is semi-automatic and uses a domain expert intervention for validation. The proposed approach relies on a set of Instances Recognition Rules based on syntactic structures, and on the predicative power of verbs in the instantiation process. It is not domain dependent since it heavily relies on linguistic knowledge. A description of an experiment performed on a part of the ontology of the PRIMA1 project (supported by the European community) is given. A first validation of the method is done by populating this ontology with Chemical Fact Sheets from Environmental Protection Agency2. The results of this experiment complete the paper and support the hypothesis that relying on the predicative power of verbs in the instantiation process improves the performance.

Keywords: Information Extraction, Instance Recognition Rules, Ontology Population, Risk Management, Semantic analysis.

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Authors: Berrin Şentürk

Abstract:

In this study, due to the recurrence of bovine tuberculosis, in the same areas, the risk factors for the disease were determined and evaluated at the local level. This study was carried out in 32 farms where the disease was detected in the district and center of Samsun province in 2014. Predetermined risk factors, such as farm, environmental and economic risks, were investigated with the survey method. It was predetermined that risks in the three groups are similar to the risk variables of the disease on the global scale. These risk factors that increase the susceptibility of the infection must be understood by the herd owners. The risk-based contagious disease management system approach should be applied for bovine tuberculosis by farmers, animal health professionals and public and private sector decision makers.

Keywords: Bovine tuberculosis, disease management, control, outbreak, risk analysis.

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Authors: Lamia Hammadi, Abdellah Ait Ouhman, Aomar Ibourk

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It is widely assumed that the case of Customs Supply Chain is classified as a complex system, due to not only the variety and large number of actors, but also their complex structural links, and the interactions between these actors, that’s why this system is subject to various types of Risks. The economic, political and social impacts of those risks are highly detrimental to countries, businesses and the public, for this reason, Risk management in the customs supply chain is becoming a crucial issue to ensure the sustainability, security and safety. The main characteristic of customs risk management approach is determining which goods and means of transport should be examined? To what extend? And where future compliance resources should be directed? The purposes of this article are, firstly to deal with the concept of customs supply chain, secondly present our risk management approach based on Cross Activity Based Costing (ABC) Method as an interactive tool to support decision making in customs risk management. Finally, analysis of case study of Moroccan customs to putting theory into practice and will thus draw together the various elements of a structured and efficient risk management approach.

Keywords: Cross ABC Method, Customs Supply Chain, Risk, Risk Management.

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Authors: Mikhail V. Khachaturyan, Inga A. Koryagina, Maria Nikishova

Abstract:

The study investigates the impact of the ongoing financial crisis, started in the 2^nd half of 2014, on marketing budgets spent by Fast-moving consumer goods companies. In these conditions, special importance is given to efficient possessory risk management systems. The main objective for establishing and developing possessory risk management systems for FMCG companies in a crisis is to analyze the data relating to the external environment and consumer behavior in a crisis. Another important objective for possessory risk management systems of FMCG companies is to develop measures and mechanisms to maintain and stimulate sales. In this regard, analysis of risks and threats which consumers define as the main reasons affecting their level of consumption become important. It is obvious that in crisis conditions the effective risk management systems responsible for development and implementation of strategies for consumer demand stimulation, as well as the identification, analysis, assessment and management of other types of risks of economic security will be the key to sustainability of a company. In terms of financial and economic crisis, the problem of forming and developing possessory risk management systems becomes critical not only in the context of management models of FMCG companies, but for all the companies operating in other sectors of the Russian economy. This study attempts to analyze the specifics of formation and development of company possessory risk management systems. In the modern economy, special importance among all the types of owner’s risks has the risk of reduction in consumer activity. This type of risk is common not only for the consumer goods trade. Study of consumer activity decline is especially important for Russia due to domestic market of consumer goods being still in the development stage, despite its significant growth. In this regard, it is especially important to form and develop possessory risk management systems for FMCG companies. The authors offer their own interpretation of the process of forming and developing possessory risk management systems within owner’s management models of FMCG companies as well as in Russian economy in general. Proposed methods and mechanisms of problem analysis of formation and development of possessory risk management systems in FMCG companies and the results received can be helpful for researchers interested in problems of consumer goods market development in Russia and overseas.

Keywords: FMCG companies, marketing budget, risk management, owner, Russian economy, organization, formation, development, system.

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Authors: Mitsuhiro Taniyama, Yuu Hidaka, Masato Arai, Satoshi Kai, Hiromi Igawa, Hiroshi Yajima, Ryoichi Sasaki

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Along with the progress of our information society, various risks are becoming increasingly common, causing multiple social problems. For this reason, risk communications for establishing consensus among stakeholders who have different priorities have become important. However, it is not always easy for the decision makers to agree on measures to reduce risks based on opposing concepts, such as security, privacy and cost. Therefore, we previously developed and proposed the “Multiple Risk Communicator" (MRC) with the following functions: (1) modeling the support role of the risk specialist, (2) an optimization engine, and (3) displaying the computed results. In this paper, MRC program version 1.0 is applied to the personal information leakage problem. The application process and validation of the results are discussed.

Keywords: Decision Making, Personal Information Leakage Problem, Risk Communication, Risk Management

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Authors: Mohammad Ehson Rangiha, Bill Karakostas

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Social Business Process Management (SBPM) promises to overcome limitations of traditional BPM by allowing flexible process design and enactment through the involvement of users from a social community. This paper proposes a meta-model and architecture for socially driven business process management systems. It discusses the main facets of the architecture such as goalbased role assignment that combines social recommendations with user profile, and process recommendation, through a real example of a charity organization.

Keywords: Business Process Management, Goal-Based Modelling, Process Recommendation Social Collaboration, Social BPM.

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Authors: Mohamed Saad Ahmed Hussien

Abstract:

This paper discusses the risk management in Islamic banks and aims to determine the difference in the practices and methods of risk management in those banks compared to the conventional banks, and to make a case study of the biggest Islamic bank in Egypt (Faisal Islamic Bank of Egypt) to identify the most important financial risks faced and how to manage those risks. It was found that Islamic banks face two types of risks. The first type is similar to the risks in conventional banks; the second type is the additional risks which facing the Islamic banks only as a result of some Islamic modes of financing. With regard to the risk management, Islamic banks such as conventional banks applied the regulatory rules issued by the Central Banks and the Basel Committee; Islamic banks also applied the instructions and procedures issued by the Islamic Financial Services Board (IFSB). Also, Islamic banks are similar to the conventional banks in the practices and methods which they use to manage the risks. And there are some factors that may affect the risk management in Islamic banks, such as the size of the bank and the efficiency of the administration and the staff of the bank.

Keywords: Conventional banks, Faisal Islamic Bank of Egypt, Islamic banks, risk management.

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Authors: Sandija Zeverte-Rivza, Irina Pilvere, Baiba Rivza

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The use of renewable energy sources incl. biogas has become topical in accordance with the increasing demand for energy, decrease of fossil energy resources and the efforts to reduce greenhouse gas emissions as well as to increase energy independence from the territories where fossil energy resources are available.

As the technologies of biogas production from agricultural biomass develop, risk assessment and risk management become necessary for farms producing such a renewable energy. The need for risk assessments has become particularly topical when discussions on changing the biogas policy in the EU take place, which may influence the development of the sector in the future, as well as the operation of existing biogas facilities and their income level.

The current article describes results of the risk assessment for farms producing biomass from agriculture biomass in Latvia, the risk assessment system included 24 risks, that affect the whole biogas production process and the obtained results showed the high significance of political and production risks.

Keywords: Biogas production, risks, risk assessment.

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Authors: M. Balestrieri, C. Pusceddu

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Issues relating to the destructive phenomena that can damage people and goods have returned to the centre of debate in Italy with the increase in catastrophic episodes in recent years in a country which is highly vulnerable to hydrological risk. Environmental factors and geological and geomorphological territorial characteristics play an important role in determining the level of vulnerability and the natural tendency to risk. However, a territory has also been subjected to the requirements of and transformations of society and this brings other relevant factors. The reasons for the increase in destructive phenomena are often to be found in the territorial development models adopted. Stewardship of the landscape and management of risk are related issues. This study aims to summarize the most relevant elements about this connection and at the same time to clarify the role of environmental risk assessment as a tool to aid in the sustainable management of landscape. Finally, the study reflects on how regional and urban planners deal with environmental risk and which aspects should be monitored in order to adopt responsible and useful interventions.

Keywords: Assessment, landscape, risk, planning.

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Authors: Chvalkovska, J., Jansky, P., Mejstrik, M.

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The objective of this article is to discuss the potential of economic analysis as a tool for identification and evaluation of corruption in legislative acts. We propose that corruption be perceived as a risk variable within the legislative process. Therefore we find it appropriate to employ risk analysis methods, used in various fields of economics, for the evaluation of corruption in legislation. Furthermore we propose the incorporation of these methods into the so called corruption impact assessment (CIA), the general framework for detection of corruption in legislative acts. The applications of the risk analysis methods are demonstrated on examples of implementation of proposed CIA in the Czech Republic.

Keywords: corruption; corruption impact assessment (CIA); legislative; legislative process; risk analysis; Czech Republic

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Authors: Ali Serhan Koyuncugil, Nermin Ozgulbas

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In this paper, a data mining model to SMEs for detecting financial and operational risk indicators by data mining is presenting. The identification of the risk factors by clarifying the relationship between the variables defines the discovery of knowledge from the financial and operational variables. Automatic and estimation oriented information discovery process coincides the definition of data mining. During the formation of model; an easy to understand, easy to interpret and easy to apply utilitarian model that is far from the requirement of theoretical background is targeted by the discovery of the implicit relationships between the data and the identification of effect level of every factor. In addition, this paper is based on a project which was funded by The Scientific and Technological Research Council of Turkey (TUBITAK).

Keywords: Risk Management, Financial Risk, Operational Risk, Financial Early Warning System, Data Mining, CHAID Decision Tree Algorithm, SMEs.

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Authors: M. Kargar, R. Mirmiran, F. Fartash, T. Saderi

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In this paper a new method is suggested for risk management by the numerical patterns in data-mining. These patterns are designed using probability rules in decision trees and are cared to be valid, novel, useful and understandable. Considering a set of functions, the system reaches to a good pattern or better objectives. The patterns are analyzed through the produced matrices and some results are pointed out. By using the suggested method the direction of the functionality route in the systems can be controlled and best planning for special objectives be done.

Keywords: Analysis, Data-mining, Pattern, Risk Management.

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Authors: Sungnam Hong, Sun-Kyu Park, Dooyong Cho, Jinwoong Choi

Abstract:

In this paper, a strategy for long-span bridge disaster response was developed, divided into risk analysis, business impact analysis, and emergency response plan. At the risk analysis stage, the critical risk was estimated. The critical risk was “car accident."The critical process by critical-risk classification was assessed at the business impact analysis stage. The critical process was the task related to the road conditions and traffic safety. Based on the results of the precedent analysis, an emergency response plan was established. By making the order of the standard operating procedures clear, an effective plan for dealing with disaster was formulated. Finally, a prototype software was developed based on the research findings. This study laid the foundation of an information-technology-based disaster response guideline and is significant in that it computerized the disaster response plan to improve the plan-s accessibility.

Keywords: Emergency response; Long-span bridge; Disaster management; Standard operating procedure; Ubiquitous.

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Authors: Marcelo Dias Carvalho, Leticia Ishikawa

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Supply Chain Risk Management refers to a set of strategies used by companies to avoid supply chain disruption caused by damage at production facilities, natural disasters, capacity issues, inventory problems, incorrect forecasts, and delays. Many companies use the techniques of the Toyota Production System, which in a way goes against a better management of supply chain risks. This paper studies key events in some multinationals to analyze the trade-off between the best supply chain risk management techniques and management policies designed to create lean enterprises. The result of a good balance of these actions is the reduction of losses, increased customer trust in the company and better preparedness to face the general risks of a supply chain.

Keywords: Supply chain disruptions, supply chain management, supply chain resilience, just-in-time production, lean manufacturing.

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Authors: Dongdong Zhang, Deran Zhang

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In this paper, a Markovian risk model with two-type claims is considered. In such a risk model, the occurrences of the two type claims are described by two point processes {Ni(t), t ¸ 0}, i = 1, 2, where {Ni(t), t ¸ 0} is the number of jumps during the interval (0, t] for the Markov jump process {Xi(t), t ¸ 0} . The ruin probability ª(u) of a company facing such a risk model is mainly discussed. An integral equation satisfied by the ruin probability ª(u) is obtained and the bounds for the convergence rate of the ruin probability ª(u) are given by using key-renewal theorem.

Keywords: Risk model, ruin probability, Markov jump process, integral equation.

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Authors: Pitsanu Tongkhow, Pichet Jiraprasertwong

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This research investigates risk factors for defective products in autoparts factories. Under a Bayesian framework, a generalized linear mixed model (GLMM) in which the dependent variable, the number of defective products, has a Poisson distribution is adopted. Its performance is compared with the Poisson GLM under a Bayesian framework. The factors considered are production process, machines, and workers. The products coded RT50 are observed. The study found that the Poisson GLMM is more appropriate than the Poisson GLM. For the production Process factor, the highest risk of producing defective products is Process 1, for the Machine factor, the highest risk is Machine 5, and for the Worker factor, the highest risk is Worker 6.

Keywords: Defective autoparts products, Bayesian framework, Generalized linear mixed model (GLMM), Risk factors.

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Authors: H. Iranmanesh, S. Nazari Shirkouhi, M. R. Skandari

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Information Technology (IT) projects are always accompanied by various risks and because of high rate of failure in such projects, managing risks in order to neutralize or at least decrease their effects on the success of the project is strongly essential. In this paper, fuzzy analytical hierarchy process (FAHP) is exploited as a means of risk evaluation methodology to prioritize and organize risk factors faced in IT projects. A real case of IT projects, a project of design and implementation of an integrated information system in a vehicle producing company in Iran is studied. Related risk factors are identified and then expert qualitative judgments about these factors are acquired. Translating these judgments to fuzzy numbers and using them as an input to FAHP, risk factors are then ranked and prioritized by FAHP in order to make project managers aware of more important risks and enable them to adopt suitable measures to deal with these highly devastative risks.

Keywords: Information technology projects, Risk evaluation, Analytic hierarchal process, fuzzy logic.

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Authors: Gerard E. Sleefe

Abstract:

There is significant interest in achieving technology innovation through new product development activities. It is recognized, however, that traditional project management practices focused only on performance, cost, and schedule attributes, can often lead to risk mitigation strategies that limit new technology innovation. In this paper, a new approach is proposed for formally managing and quantifying technology innovation. This approach uses a risk-based framework that simultaneously optimizes innovation attributes along with traditional project management and system engineering attributes. To demonstrate the efficacy of the new riskbased approach, a comprehensive product development experiment was conducted. This experiment simultaneously managed the innovation risks and the product delivery risks through the proposed risk-based framework. Quantitative metrics for technology innovation were tracked and the experimental results indicate that the risk-based approach can simultaneously achieve both project deliverable and innovation objectives.

Keywords: innovation, risk assessment, product development, technology management.

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Authors: Chung-Hung Tsai

Abstract:

Global environmental changes lead to increased frequency and scale of natural disaster, Taiwan is under the influence of global warming and extreme weather. Therefore, the vulnerability was increased and variability and complexity of disasters is relatively enhanced. The purpose of this study is to consider the source and magnitude of hazard characteristics on the tourism industry. Using modern risk management concepts, integration of related domestic and international basic research, this goes beyond the Taiwan typhoon disaster risk assessment model and evaluation of loss. This loss evaluation index system considers the impact of extreme weather, in particular heavy rain on the tourism industry in Taiwan. Consider the extreme climate of the compound impact of disaster for the tourism industry; we try to make multi-hazard risk assessment model, strategies and suggestions. Related risk analysis results are expected to provide government department, the tourism industry asset owners, insurance companies and banking include tourist disaster risk necessary information to help its tourism industry for effective natural disaster risk management.

Keywords: Tourism industry, extreme weather, multi-hazard, vulnerability analysis, loss exceeding probability, risk management.

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Authors: Preeda Sansakorn, Min An

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In order to be capable of dealing with uncertainties, subjectivities, including vagueness arising in building construction projects, the application of fuzzy reasoning technique based on fuzzy set theory is proposed. This study contributes significantly to the development of a fuzzy reasoning safety risk assessment model for building construction projects that could be employed to assess the risk magnitude of each hazardous event identified during construction, and a third parameter of probability of consequence is incorporated in the model. By using the proposed safety risk analysis methodology, more reliable and less ambiguities, which provide the safety risk management project team for decision-making purposes.

Keywords: Safety risks assessment, building construction safety, fuzzy reasoning, construction risk assessment model, building construction projects.

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Authors: Narayanan Sambu Potty , Mohammad Kabir B. Mohd Akram

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Structural Integrity Management (SIM) is important for the protection of offshore crew, environment, business assets and company and industry reputation. API RP 2A contained guidelines for assessment of existing platforms mostly for the Gulf of Mexico (GOM). ISO 19902 SIM framework also does not specifically cater for Malaysia. There are about 200 platforms in Malaysia with 90 exceeding their design life. The Petronas Carigali Sdn Bhd (PCSB) uses the Asset Integrity Management System and the very subjective Risk based Inspection Program for these platforms. Petronas currently doesn-t have a standalone Petronas Technical Standard PTS-SIM. This study proposes a recommended practice for the SIM process for offshore structures in Malaysia, including studies by API and ISO and local elements such as the number of platforms, types of facilities, age and risk ranking. Case study on SMG-A platform in Sabah shows missing or scattered platform data and a gap in inspection history. It is to undergo a level 3 underwater inspection in year 2015.

Keywords: platform, assessment, integrity, risk based inspection.

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Authors: Muhammad Jamaluddin Thaheem, Alberto De Marco

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The area of Project Risk Management (PRM) has been extensively researched, and the utilization of various tools and techniques for managing risk in several industries has been sufficiently reported. Formal and systematic PRM practices have been made available for the construction industry. Based on such body of knowledge, this paper tries to find out the global picture of PRM practices and approaches with the help of a survey to look into the usage of PRM techniques and diffusion of software tools, their level of maturity, and their usefulness in the construction sector. Results show that, despite existing techniques and tools, their usage is limited: software tools are used only by a minority of respondents and their cost is one of the largest hurdles in adoption. Finally, the paper provides some important guidelines for future research regarding quantitative risk analysis techniques and suggestions for PRM software tools development and improvement.

Keywords: Construction industry, Project risk management, Software tools, Survey study.

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Authors: Eakarat Boonreang

Abstract:

The past two decades, Thailand faced the natural disasters, for instance, Gay typhoon in 1989, tsunami in 2004, and huge flood in 2011. The disaster management in Thailand was improved both structure and mechanism for cope with the natural disaster since 2007. However, the natural disaster management in Thailand has various problems, for examples, cooperation between related an organizations have not unity, inadequate resources, the natural disaster management of public sectors not proactive, people has not awareness the risk of the natural disaster, and communities did not participate in the natural disaster management. Objective of this study is to find the methods for capacity building in the natural disaster management of Thailand. The concept and information about the capacity building and the natural disaster management of Thailand were reviewed and analyzed by classifying and organizing data. The result found that the methods for capacity building in the natural disaster management of Thailand should be consist of 1) link operation and information in the natural disaster management between nation, province, local and community levels, 2) enhance competency and resources of public sectors which relate to the natural disaster management, 3) establish proactive natural disaster management both planning and implementation, 4) decentralize the natural disaster management to local government organizations, 5) construct public awareness in the natural disaster management to community, 6) support Community Based Disaster Risk Management (CBDRM) seriously, and 7) emphasis on participation in the natural disaster management of all stakeholders.

Keywords: Capacity Building, Community Based Disaster Risk Management, Natural Disaster Management, Thailand.

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Authors: Jolanta Tamošaitienė

Abstract:

The article focuses on a developed comprehensive model to be used in an agile environment for the risk assessment and selection based on multi-attribute methods. The model is based on a multi-attribute evaluation of risk in construction, and the determination of their optimality criterion values are calculated using complex Multiple Criteria Decision-Making methods. The model may be further applied to risk assessment in an agile construction environment. The attributes of risk in a construction project are selected by applying the risk assessment condition to the construction sector, and the construction process efficiency in the construction industry accounts for the agile environment. The paper presents the comprehensive risk assessment model in an agile construction environment. It provides a background and a description of the proposed model and the developed analysis of the comprehensive risk assessment model in an agile construction environment with the criteria.

Keywords: Assessment, environment, agile, model, risk.

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Authors: Shan Gao

Abstract:

In this paper, we consider a risk model involving two independent classes of insurance risks and random premium income. We assume that the premium income process is a Poisson Process, and the claim number processes are independent Poisson and generalized Erlang(n) processes, respectively. Both of the Gerber- Shiu functions with zero initial surplus and the probability generating functions (p.g.f.) of the Gerber-Shiu functions are obtained.

Keywords: Poisson process, generalized Erlang risk process, Gerber-Shiu function, generating function, generalized Lundberg equation.

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Authors: Mikhail V. Khachaturyan

Abstract:

The article analyzes problems of improving the management systems of the ownership risks in the conditions of the transformation of the Russian economy. Among the main sources of threats business owners should highlight is the inefficiency of the implementation of business models and interaction with hired managers. In this context, it is particularly important to analyze the relationship of business models and ownership risks. The analysis of this problem appears to be relevant for a number of reasons: Firstly, the increased risk appetite of the owner directly affects the business model and the composition of his holdings; secondly, owners with significant stakes in the company are factors in the formation of particular types of risks for owners, for which relations have a significant influence on a firm's competitiveness and ultimately determines its survival; and thirdly, inefficient system of management ownership of risk is one of the main causes of mass bankruptcies, which significantly affects the stable operation of the economy as a whole. The separation of the processes of possession, disposal and use in modern organizations is the cause of not only problems in the process of interaction between the owner and managers in managing the organization as a whole, but also the asymmetric information about the kinds and forms of the main risks. Managers tend to avoid risky projects, inhibit the diversification of the organization's assets, while owners can insist on the development of such projects, with the aim not only of creating new values for themselves and consumers, but also increasing the value of the company as a result of increasing capital. In terms of separating ownership and management, evaluation of projects by the ratio of risk-yield requires preservation of the influence of the owner on the process of development and making management decisions. It is obvious that without a clearly structured system of participation of the owner in managing the risks of their business, further development is hopeless. In modern conditions of forming a risk management system, owners are compelled to compromise between the desire to increase the organization's ability to produce new value, and, consequently, increase its cost due to the implementation of risky projects and the need to tolerate the cost of lost opportunities of risk diversification. Improving the effectiveness of the management of ownership risks may also contribute to the revitalization of creditors on implementation claims to inefficient owners, which ultimately will contribute to the efficiency models of ownership control to exclude variants of insolvency. It is obvious that in modern conditions, the success of the model of the ownership of risk management and audit is largely determined by the ability and willingness of the owner to find a compromise between potential opportunities for expanding the firm's ability to create new value through risk and maintaining the current level of new value creation and an acceptable level of risk through the use of models of diversification.

Keywords: Risk management, ownership risks, economic transformation, Russian economy, management systems.

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Authors: F. Gökgöz, M. E. Atmaca

Abstract:

Electricity has an indispensable role in human daily life, technological development and economy. It is a special product or service that should be instantaneously generated and consumed. Sources of the world are limited so that effective and efficient use of them is very important not only for human life and environment but also for technological and economic development. Competitive electricity market is one of the important way that provides suitable platform for effective and efficient use of electricity. Besides benefits, it brings along some risks that should be carefully managed by a market player like Electricity Generation Company. Risk management is an essential part in market players’ decision making. In this paper, risk management through diversification is applied with the help of Value at Risk methods for case studies. Performance of optimal electricity sale solutions are measured and the portfolio performance has been evaluated via Sharpe-Ratio, and compared with conventional approach. Biennial historical electricity price data of Turkish Day Ahead Market are used to demonstrate the approach.

Keywords: Electricity market, portfolio optimization, risk management, Sharpe ratio, value at risk.

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Authors: K. Sekulová, M. Šimon

Abstract:

This article focuses on upper-extremity musculoskeletal disorders risk assessment model at workplace. In this model are used risk factors that are responsible for musculoskeletal system damage. Based on statistic calculations the model is able to define what risk of MSD threatens workers who are under risk factors. The model is also able to say how MSD risk would decrease if these risk factors are eliminated.

 

Keywords: Ergonomics, musculoskeletal disorders, occupational diseases, risk factors.

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Authors: Udeme O. Ini, Edikan E. Akpanibah

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This paper studies the optimal investment strategies for a plan member (PM) in a defined contribution (DC) pension scheme with transaction cost, taxes on invested funds and couple risky assets (stocks) under the Ornstein-Uhlenbeck (O-U) process. The PM’s portfolio is assumed to consist of a risk-free asset and two risky assets where the two risky assets are driven by the O-U process. The Legendre transformation and dual theory is use to transform the resultant optimal control problem which is a nonlinear partial differential equation (PDE) into linear PDE and the resultant linear PDE is then solved for the explicit solutions of the optimal investment strategies for PM exhibiting constant absolute risk aversion (CARA) using change of variable technique. Furthermore, theoretical analysis is used to study the influences of some sensitive parameters on the optimal investment strategies with observations that the optimal investment strategies for the two risky assets increase with increase in the dividend and decreases with increase in tax on the invested funds, risk averse coefficient, initial fund size and the transaction cost.

Keywords: Ornstein-Uhlenbeck process, portfolio management, Legendre transforms, CARA utility.

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Authors: Yousef S. Al-Othman

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The growth and expansion of the industrial facilities comes proportional to the market increasing demand of products and services. Furthermore, raw material producers such as oil companies usually undergo massive revamping projects to maintain a synchronized supply. These revamping projects are usually delivered through challenging construction projects held and associated with daily site risks related to the construction process. Henceforth, a case study related to these risks and corresponding on-spot corrective measurements has been made on a certain number of construction project contractors at Kuwait Oil Company (KOC) to derive the benefits and overall effectiveness of the on-spot corrective measurements during the construction phase of a project, and how would the same help in avoiding major incidents, ensuring a smooth, cost effective and on time delivery of the project. Findings of this case study shall have an added value to the overall risk management process by minimizing the daily site risks that may affect the project lead time, resulting in an undisturbed on-site construction process.

Keywords: Oil and gas, risk management, construction projects, project lead time.

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