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How to Design Rating Schemes of Risk Matrices: A Sequential Updating Approach

Published on Jan 1, 2018in Risk Analysis 2.56
· DOI :10.1111/risa.12810
Jianping LiXiaolei19
Estimated H-index: 19
(CAS: Chinese Academy of Sciences),
Chunbing Bao3
Estimated H-index: 3
(CAS: Chinese Academy of Sciences),
Dengsheng Wu10
Estimated H-index: 10
(CAS: Chinese Academy of Sciences)
Cite
Abstract
Risk matrices have been widely used as a risk evaluation tool in many fields due to their simplicity and intuitive nature. Designing a rating scheme, i.e., determining the number of ratings used in a risk matrix and assigning different ratings to different cells, is an essential part of risk matrix construction. However, most of the related literature has focused on applying a risk matrix to various fields, instead of researching how to design risk matrices. Based on the analysis of several current rules, we propose a new approach, namely, the sequential updating approach (SUA), to design the rating scheme of a risk matrix in a reliable way. In this article, we propose three principles and a rating algorithm based on these principles. The three principles, namely, adjusted weak consistency, consistent internality, and continuous screening, characterize a good rating scheme. The resulting rating scheme has been proven to be unique. A global rating algorithm is then proposed to create the design that satisfies the three principles. We then explore the performance of the SUA. An illustrative application is first given to explain the feasibility of our approach. The sensitivity analysis shows that our method captures a resolution†reliability tradeoff for decisionmakers in choosing an appropriate rating scheme for a risk matrix. Finally, we compare the designs based on the SUA and Cox's axioms, highlighting the advantages of the SUA.
  • References (26)
  • Citations (7)
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References26
Newest
Published on May 4, 2018in Journal of Risk Research 1.70
Chunbing Bao3
Estimated H-index: 3
(CAS: Chinese Academy of Sciences),
Jianping LiXiaolei19
Estimated H-index: 19
(CAS: Chinese Academy of Sciences),
Dengsheng Wu10
Estimated H-index: 10
(CAS: Chinese Academy of Sciences)
Extant research has focused upon assessing individual risks with the aid of risk matrices. Although risk aggregation is an important issue in risk management, aggregation of risks measured by risk matrices remains unresolved despite the wide usage of risk matrices. This paper proposes a framework to resolve the problem. We start from modifying the two notions of non-aggregatability of risk matrices, namely, qualitative description of inputs and non-comparability of different types of consequence...
Wen-Kai Hsu8
Estimated H-index: 8
(NKMU: National Kaohsiung Marine University),
Show-Hui S. Huang4
Estimated H-index: 4
,
Wen-Jui Tseng2
Estimated H-index: 2
(NKMU: National Kaohsiung Marine University)
Abstract The purpose of this study is to assess the risk of operational safety for dangerous goods in airfreights. Based on the relevant literature, the risk factors (RFs) of operational safety were first investigated. A revised risk matrix based on fuzzy AHP (Analytic Hierarchy Process) was then proposed to assess the risks of those RFs’ in operational safety. Finally, to validate the model, the airfreight operations of dangerous goods in Taiwan were empirically investigated. The results indica...
Published on Apr 1, 2016in Safety Science 3.62
Floris Goerlandt22
Estimated H-index: 22
(Aalto University),
Genserik Reniers23
Estimated H-index: 23
(TU Delft: Delft University of Technology)
Abstract Risk matrices and risk diagrams are widely used tools for analyzing, assessing and visualizing risk in many industries, and are used extensively for risk management purposes. Despite their popularity and wide application, they have recently become the object of discussion and research in scientific environments, which can be seen as part of a wider focus on foundational issues in the risk analysis discipline. Identifying several serious limitations and problems with the risk matrix appr...
Mónica Duarte Oliveira14
Estimated H-index: 14
(IST: Instituto Superior Técnico),
Carlos A. Bana e Costa27
Estimated H-index: 27
(IST: Instituto Superior Técnico),
Diana F. Lopes3
Estimated H-index: 3
(IST: Instituto Superior Técnico)
Risk matrices are adopted and recommended by many organizations, but the way they are usually constructed violates some basic theoretical principles, giving rise to inconsistent risk ratings. This paper studies ways in which multiple criteria and portfolio decision analyses can improve the design and deployment of risk matrices, using MACBETH (the "Measuring Attractiveness by a Categorical Based Evaluation TecHnique"). Firstly, it introduces 'value risk-matrices', built with MACBETH in the follo...
Published on Aug 1, 2015in Risk Analysis 2.56
Xin Ruan6
Estimated H-index: 6
(Tongji University),
Zhiyi Yin1
Estimated H-index: 1
(Tongji University),
Dan M. Frangopol52
Estimated H-index: 52
(Lehigh University)
Recent studies indicate that absence of the consideration of risk attitudes of decisionmakers in the risk matrix establishment process has become a major limitation. In order to evaluate risk in a more comprehensive manner, an approach to establish risk matrices that integrates risk attitudes based on utility theory is proposed. There are three main steps within this approach: (1) describing risk attitudes of decisionmakers by utility functions, (2) bridging the gap between utility functions and...
Published on Jul 1, 2015in Safety Science 3.62
Nijs Jan10
Estimated H-index: 10
(DTU: Technical University of Denmark)
Risk matrices are widely used in risk management. They are a regular feature in various risk management standards and guidelines and are also used as formal corporate risk acceptance criteria. It is only recently, however, that scientific publications have appeared that discuss the weaknesses of the risk matrix. The objective of this paper is to explore these weaknesses, and provide recommendations for the use and design of risk matrices. The paper reviews the few relevant publications and adds ...
Published on Jul 1, 2015in Risk Analysis 2.56
Gilberto Montibeller13
Estimated H-index: 13
(Lboro: Loughborough University),
Detlof von Winterfeldt32
Estimated H-index: 32
(SC: University of Southern California)
Behavioral decision research has demonstrated that judgments and decisions of ordinary people and experts are subject to numerous biases. Decision and risk analysis were designed to improve judgments and decisions and to overcome many of these biases. However, when eliciting model components and parameters from decisionmakers or experts, analysts often face the very biases they are trying to help overcome. When these inputs are biased they can seriously reduce the quality of the model and result...
Published on Feb 1, 2015in Safety Science 3.62
Ben Ale20
Estimated H-index: 20
(TU Delft: Delft University of Technology),
Peter Burnap17
Estimated H-index: 17
(Cardiff University),
David Slater1
Estimated H-index: 1
(Cardiff University)
The development of parallel ISO "risk" standards series - ISO 31,000 and 27,000 and now Security Risk (28,001) versions, underlines the divergences in requirements from the different currently practising risk management communities. This is highlighted in the content of the series of ongoing web based discussions (Linked in) (Institute of Risk management, 2011). The contributions have been thoughtful, authoritative and illuminating and it is reassuring that even after (or perhaps because of) rec...
Published on Dec 1, 2014in Risk Analysis 2.56
Cameron A. MacKenzie9
Estimated H-index: 9
Our society is fascinated with risk in many different areas and disciplines. One of the main ways to describe and communicate the level of risk is through risk indices, which summarize risk using numbers or categories such as words, letters, or colors. These indices are used to communicate risks to the public, understand how risk is changing over time, compare among different risks, and support decision making. Given the different methods to construct risk indices, including flawed methods such ...
Published on Jan 1, 2014in Risk Analysis 2.56
J. Holt17
Estimated H-index: 17
(Imperial College London),
A. W. Leach10
Estimated H-index: 10
(Imperial College London)
+ 5 AuthorsJohn D. Mumford22
Estimated H-index: 22
(Imperial College London)
Utility functions in the form of tables or matrices have often been used to combine discretely rated decision-making criteria. Matrix elements are usually specified individually, so no one rule or principle can be easily stated for the utility function as a whole. A series of five matrices are presented that aggregate criteria two at a time using simple rules that express a varying degree of constraint of the lower rating over the higher. A further nine possible matrices were obtained by using a...
Cited By7
Newest
Published on Sep 1, 2019in Journal of Environmental Management 4.87
Olusegun O. Osunkoya , Jens Froese (CSIRO: Commonwealth Scientific and Industrial Research Organisation), Sam Nicol13
Estimated H-index: 13
(CSIRO: Commonwealth Scientific and Industrial Research Organisation)
Managing and monitoring invasive alien species (IAS) is costly, and because resources are limited, prioritization decisions are required for planning and management. We present findings on plant pest prioritization for 63 established invader species of natural and grazing ecosystems of Queensland, Australia. We used an expert elicitation approach to assess risk (species occurrence, spread, and impact) and feasibility of control for each IAS. We elicit semi-quantitative responses from diverse exp...
Published on May 1, 2019in IEEE Transactions on Fuzzy Systems 8.76
Chunbing Bao3
Estimated H-index: 3
(CAS: Chinese Academy of Sciences),
Dengsheng Wu10
Estimated H-index: 10
(CAS: Chinese Academy of Sciences),
Jianping LiXiaolei19
Estimated H-index: 19
(CAS: Chinese Academy of Sciences)
Risk measures play significant roles in determining the magnitude of risks. The traditional risk measures consider only the consequence (C)and the probability (P)and ignore the support of the knowledge behind to estimate Cand P. Several researchers have suggested adding knowledge as a third dimension in the risk measures. However, the issues of how to embed the dimension of knowledge in the risk measures to output an explicit expression of the risk measure and how to measure the stre...
Published on Mar 31, 2019in Journal of Risk Research 1.70
Chunbing Bao3
Estimated H-index: 3
,
Jie Wan1
Estimated H-index: 1
+ 1 AuthorsJianping LiXiaolei19
Estimated H-index: 19
AbstractRisk matrices have been proven as useful risk management tools, especially in the cases where data are not sufficient. Current usage of risk matrices in both literature and practice is related to single risk assessment. However, sometimes the decision makers care more about the overall risk consisting of several of single risks, which is in the scope of the aggregation of single risks measured by risk matrices. Unfortunately, two notions, namely, incomparability of different qualitative ...
Published on Jan 17, 2019in Transportation Research Record 0.75
Andrew Nelson (University of California, Berkeley), Sarah Lindbergh (University of California, Berkeley)+ 4 AuthorsMarta C. González34
Estimated H-index: 34
(University of California, Berkeley)
Many of the world’s most disaster-prone cities are also the most difficult to model and plan. Their high vulnerability to natural hazards is often defined by low levels of economic resources, data scarcity, and limited professional expertise. As the frequency and severity of natural disasters threaten to increase with climate change, and as cities sprawl and densify in hazardous areas, better decision-making tools are needed to mitigate the effects of near- and long-term extreme events. We use m...
Published on Jan 2, 2019in Mathematical Problems in Engineering 1.18
Bo Luo (Xi'an University of Science and Technology), Jinsuo Zhang , Zhenyu Li (Xi'an University of Science and Technology)
While specialized services continue to be developed in the mining industry, there has been a lack of corresponding risk management research in China. This study develops a risk assessment index framework of general contract for mine production and operational specialized service. From previous research, the risk factors for specialized mine production and operation services are identified and the index framework is set up. An index weight is established using Delphi and set-valued statistics-tri...
Dengsheng Wu10
Estimated H-index: 10
(CAS: Chinese Academy of Sciences),
Xiaoqian Zhu7
Estimated H-index: 7
(CAS: Chinese Academy of Sciences)
+ 2 AuthorsJianping LiXiaolei19
Estimated H-index: 19
(CAS: Chinese Academy of Sciences)
Studies on software risk response theories and methods play an important role in improving the success rate of software project. With the requirement of software risk management, the existing single-objective risk response strategies section model is difficult to manage software risks effectively. This paper regards software risk response cost and software risk exposure as optimization objectives and proposes a multiobjective risk response strategies optimization model for software project. Furt...
Published on Oct 1, 2018in Information Sciences 5.52
Dengsheng Wu10
Estimated H-index: 10
(CAS: Chinese Academy of Sciences),
Jianping LiXiaolei19
Estimated H-index: 19
(CAS: Chinese Academy of Sciences)
+ 3 AuthorsQianzhi Dai1
Estimated H-index: 1
(Hefei University of Technology)
Abstract Project risk response planning is an important component of project risk management to help ensure project success. However, thus far, the relevant research has ignored the correlations between risk factors during different project development subprocesses. This study proposes a novel risk response method by opening the black box of the project process and considering the risk correlations among different subprocesses to help practitioners create a practical risk response plan. In our m...
Published on Jul 1, 2018in Sports Medicine 7.58
Colin W Fuller36
Estimated H-index: 36
The aim of this review was to provide insights into and a critical assessment of injury burden, risk matrices and risk contours in the context of team sports. Injury burden is the product of injury incidence and mean severity, and is normally reported as days’ absence/1000 player-hours. An important feature of injury burden is that equal values can reflect quite different numerical combinations of injury incidence and severity. The timeframe over which injury burden affects a team depends on the...
Published on Jan 1, 2017in Procedia Computer Science
Chunbing Bao3
Estimated H-index: 3
(CAS: Chinese Academy of Sciences),
Dengsheng Wu10
Estimated H-index: 10
(CAS: Chinese Academy of Sciences)
+ 2 AuthorsJianming Chen6
Estimated H-index: 6
(CAS: Chinese Academy of Sciences)
Abstract The design of risk matrices is a topic that has not reached a consensus, although risk matrices are widely used in practice. Several methods have been proposed to help design risk matrices. However, all the methods seem to have their own advantages, and it is difficult for the decision makers to choose one. In this paper, we compare two different risk matrix design methods from the perspective of applicability. Specifically, we give three detailed scenarios where different settings of t...