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Severity of risks threatening a class of systems

Severity of risks threatening a class of systems Stochastic models are generally recognised as extremely powerful analytical tools for investigating fundamental concepts and operations of the risk management process. The present paper aims to consider stochastic modelling efforts related to effective reduction of the severity of risks causing multiple damages to a class of systems. A new stochastic model is formulated which is shown to be a classical problem of risk measurement operations. The investigation of such a model is based on classical methods of probability distributions theory. A stochastic model having the form of a random sum of non-negative random variables is formulated. Sufficient conditions for evaluating the characteristic function of the proposed random sum are established. Moreover, applications of this random sum in evaluating the severity of a risk threatening a class of systems are provided. The difficulty of establishing properties which extend the practical applicability of the proposed random sum still remains. The formulated stochastic model provides a new original way to measure catastrophic risks and overcome the existing classical risk measurement stochastic models. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Applied Systemic Studies Inderscience Publishers

Severity of risks threatening a class of systems

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1751-0589
eISSN
1751-0597
DOI
10.1504/IJASS.2014.064062
Publisher site
See Article on Publisher Site

Abstract

Stochastic models are generally recognised as extremely powerful analytical tools for investigating fundamental concepts and operations of the risk management process. The present paper aims to consider stochastic modelling efforts related to effective reduction of the severity of risks causing multiple damages to a class of systems. A new stochastic model is formulated which is shown to be a classical problem of risk measurement operations. The investigation of such a model is based on classical methods of probability distributions theory. A stochastic model having the form of a random sum of non-negative random variables is formulated. Sufficient conditions for evaluating the characteristic function of the proposed random sum are established. Moreover, applications of this random sum in evaluating the severity of a risk threatening a class of systems are provided. The difficulty of establishing properties which extend the practical applicability of the proposed random sum still remains. The formulated stochastic model provides a new original way to measure catastrophic risks and overcome the existing classical risk measurement stochastic models.

Journal

International Journal of Applied Systemic StudiesInderscience Publishers

Published: Jan 1, 2014

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