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Risk Management, Risk Assessment, and Decision Making 3-Day Course

Course Description

The 3-day course includes an Introduction and basic definitions of risk; Elements of risk analysis; Risk management processes; Probabilistic risk assessment; Decision making techniques for multiple criteria problems; Decision making techniques for problems with uncertainty; Decision making techniques for problems with multiple actors; Uncertainty propagation; Decision making processes; Estimating the value of information.

Who Should Take the Course

This course is designed for practitioners of risk analysis and presents an engineering approach to risk management, risk assessment, and decision making. The target audience should have basic understanding of probability, statistics and engineering at senior undergraduate level. The course assumes no knowledge of risk analysis and provides necessary engineering foundation.

What the Student Will Learn

In this course the student will learn about risk management: identifying risks, assessing risks, and deciding how to mitigate risks. The course provides methods for assessing risks and formal decision making techniques for risk management. Topics are further clarified using practical examples of engineering systems.

Included Materials

Attendees will receive course handouts.

Required Materials

Attendees should bring a scientific calculator. Recommended: “Risk Analysis in Engineering, Techniques, Tools and Trends,” by Mohammad Modarres, CRC Press.

Dr. Jeffrey W. Herrmann

Picture of Dr. Jeffrey W. Herrmann

Dr. Jeffrey W. Herrmann is an associate professor at the University of Maryland, where he holds a joint appointment with the Department of Mechanical Engineering and the Institute for Systems Research. Dr. Herrmann earned his B.S. in applied mathematics from Georgia Institute of Technology and received his Ph.D. in industrial and systems engineering from the University of Florida. His publications cover topics in process planning, production scheduling, design for manufacturing, and reliability estimation. His current research interests include engineering decision-making and operations research for homeland security.

Course Outline

Day One
  1. Introduction and Basic Definitions
    • Risk
    • Risk Analysis
    • Risk Management
    • Risk Assessment
  2. The Process of Risk Management
    • Risk Management Standards
    • Formal Risk Management Approaches
    • Practical Risk Management
  3. Risk Assessment
    • Qualitative Risk Assessment
    • Probabilistic Risk Assessment (PRA)
    • Fault Trees
    • Event Trees
Day Two
  1. Decision Making in Risk Management
    • Perspectives on Decision Making
    • Rationality in Decision Making
    • Risk Acceptance
  2. Multiple Criteria Decision Making
    • Decision Formulation
    • Choice Strategies
    • The Analytic Hierarchy Process (AHP)
    • Multiattribute Utility Theory (MAUT)
  3. Decision Making Under Uncertainty
    • Decision Trees
    • Modeling Risk Aversion
    • Robustness
    • Uncertainty Importance Measures
  4. Decision Making with Multiple Actors
    • Group Decision Making
    • Game Theory
Day Three
  1. The Decision Making Process
    • Types of Processes
    • Decomposition and Separation
    • Search
    • The Analytic-Deliberative Process
    • Risk-Informed Decision Making
  2. Uncertainty Propagation
    • Analytical Techniques
    • Monte Carlo Simulation
  3. Information and Decision Making
    • Decision Making with Very Little Information
    • Value of Information
  4. Decision Making in an Organization
    • Communication
    • The Risk of Bad Decisions
  5. Risk Management as a Decision Making System
    • Precursors
    • Alarms