Diversification Modeling for Risk Management of Safety and Security Programs

摘要

In financial risk management it is well known that diversification can be effective to reduce non-systematic risk. Indeed, diversification has been described as the free lunch of investors. In this paper we import the concept of diversification to manage risk in safety and security programs. We describe several principles of diversification. We diagram a process for the selection of diversification units, impacts, and metrics. We compare several metrics of diversification. We characterize the features of safety and security programs that involve the distribution of resources across diversification units. Such units include geography, personnel, goals, time periods, and others. We describe examples including transportation lighting and guardrails, automatic external defibrillators, fire suppression devices, telephone call boxes, and safety or security sensors. We describe models of diversification and program-wide risk in which there are impacts to the risk of extremes. We describe the potential for emergent risks that have not been considered in the original requirements of the program. We describe the general implications of diversification and diversification models to risk management. Finally, we suggest the opportunities to incorporate diversification modeling to some common software for multicriteria decision making and risk management.