On the use of expected values in safety management
In this paper we discuss the use of statistical expected values in safety management. We show that an essential concept when dealing with safety management is uncertainty about the consequences and phenomena, how uncertainty is described, perceived, communicated and managed. As uncertainty cannot be fully described and calculated by statistical expected values, there is a need for a broad perspective on uncertainty and risk. A risk picture has to be established showing different dimensions and aspects of the risks, and this picture has to be seen in relation to the limitations of the analysis. Our starting point is the offshore oil and gas industry, but our discussion is to large extent general and could also be applied in other areas.
KeywordsCash Flow Risk Aversion Systematic Risk Safety Management Portfolio Theory
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