Don’t Forget to Pick-Up Your Daughter: A Risk Management Plan Optimized by using Probabilistic Risk Assessment, Decision Trees, and Monte Carlo Simulations

摘要

This paper uses a simple everyday risk toillustrate a risk assessment and control processthat would be equally applicable to any safetyissue. The process uses scenario development,decision trees, Monte Carlo simulation, andsensitivity analysis. The risk example selected ishaving to pay a cash penalty and facing possibleservice termination should you arrive late topick-up your child from daycare. The initiallevel of risk is quantified. Competitive riskreduction strategies are developed. The optimalstrategy is selected and incorporated into a riskmanagement plan.