TABLE OF CONTENTS "One factor that makes risk probabilities potentially complicated is that experts often cannot provide absolute probabilities of risk factors. Instead, they commonly offer only relative risk levels. In other words, while experts can often offer insights into how to reduce certain risks, it is seldom that they can tell anyone what a given risk really is."
Norman Schulz
Intractable conflict knowledge base project University of Colorado, 2003
In engineering design we are used to applying standard formulae, codes and standards, and arrive at an engineering solution, e.g. sizing of equipment. The information on which decisions are made is essentially deterministic, the uncertainty being confined to the range of accuracy of the design formulae used. The decision to construct is then straightforward, with some safety factor added to the design to cover uncertainty, e.g. an increase of 10 15% of the area of a heat exchanger.
When the consequence of a hazardous event is known, but the likelihood is known only as a probability, decision making has to be done under a cloud of uncertainty. The number of variables involved is large, and there are complex interactions. Therefore the decision makers need to be aware of a number of issues and seek additional information in order to make a balanced decision.
The decision making is not always on the part of a corporation only, which is mainly a commercial decision. There are also issues related to decision making in the public sector. This often involves approvals for commercial projects, build operate...
