Investment appraisal using quantitative risk analysis.
Investment appraisal concerned with investments in fire safety systems is discussed. Particular attention is directed at evaluating, in terms of the Bayesian decision theory, the risk reduction that investment in a fire safety system involves. It is shown how the monetary value of the change from a building design without any specific fire protection system to one including such a system can be estimated by use of quantitative risk analysis, the results of which are expressed in terms of a Risk-adjusted net present value. This represents the intrinsic monetary value of investing in the fire safety system. The method suggested is exemplified by a case study performed in an Avesta Sheffield factory.
Johansson
Henrik
H
Department of Fire Safety Engineering, Lund University, P.O. Box 118, SE-22100 Lund, Sweden. henrik.johansson@brand.lth.se
D000056:Accident Prevention; D001499:Bayes Theorem; D003365:Costs and Cost Analysis; D003657:Decision Making; D005390:Fires; D007449:Investments; D018570:Risk Assessment; D012449:Safety / Q000191:economics*