Shipping Industry Relies on PrecisionTree, @RISK, to Manage Risks to Crew, Environment, and Property

DNV GL SEShipping Industry Relies on PrecisionTree, @RISK, to Manage Risks to Crew, Environment, and Property, an international organization for ship classification, safety and quality control, uses PrecisionTree and @RISK software (part of the DecisionTools Suite, Palisade’s complete toolkit of risk and decision analysis tools) to determine the risk of an incident occurring to a ship or its systems and the consequences should one occur. This enables cost-benefit analysis so that informed decisions can be made about the best strategies to mitigate risk events.

DNV GL is the world’s largest ship and offshore classification organization, and in this context, DNV GL is a key player in major research and development projects for the shipping industry. A core element of their focus is enhancing safety and security in shipping by pro-active use of risk assessment and cost-benefit techniques.

Part of their risk assessment method involves Palisade’s decision tree software, PrecisionTree, to develop the risk models that apply to: (1) crew; (2) environment; and (3) property.

They then use @RISK to perform Monte Carlo simulation, which factors in the uncertainty of input parameters for the risk models, and illustrates the impact on the estimates provided for the assessment of a current level of risk, as well as the cost-efficiency of risk-mitigating measures.

“PrecisionTree makes it straightforward to quickly develop event trees. These are essential to our analysis when looking at how to reduce the both the number of shipping incidents and the consequences should they occur,” explains Dr. Rainer Hamann, Topic Manager Risk Assessment, Safety Research at DNV GL SE. “At the same time we have to be realistic about the accuracy of our data inputs and, by means of distributions and Monte Carlo simulation, @RISK enables us to be clear about the level of uncertainty contained in each model. Embedded in the Microsoft environment, it also allows us to incorporate standard Excel features, making it easy to use.”

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@RISK at the Core of DNV GL’s Risk Management Services to Account for Uncertainty

@RISK Drives DNV GL's Risk Management Practice

DNV GL’s energy division consists of 3000 energy experts that deliver world-renowned testing and expertise for the energy value chain, including renewables and energy efficiency.

One of DNV GL’s customer’s, ROAF (Romerike avfallsforedling), an inter-municipal waste management company, wanted to invest in a new waste management system in order to meet EU targets of 50% minimum recycling of domestic waste by 2020. It had several recommendations delivered by a supplier, but needed to ensure that the final decision fell on the most cost-effective and sustainable system – and guarantee that all risks had been considered along the way, as well as an independent quality assessment of recommendations.

DNV GL worked with the customer to create a solid foundation for decision making by using @RISK to first understand and simplify assessment criteria, and then evaluate and report risks against these same criteria. “The main reason we chose @RISK is that it adds that critical uncertainty that is present in all investments and decisions into the model,” says  Nicolaj Tidemand, Principal Specialist at DNV GL. “This gives invaluable information to decision makers, with the integration into Microsoft Excel making the tool very flexible.”

He continues, “Risk management offers the customer more control over the risks related to the business and what actions can be taken to ensure a successful business outcome. Quantitative investment risk analysis gives the customer more information about the risks related to their investment decision, the flexibility of Palisade’s @RISK supports simple cost risk models and complex quantitative risk analyses that could be tailored to the customer’s needs.”

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