Catastrophic Risk Analysis
Course Number: 45966
Catastrophic risk can end corporate life. Catastrophic risks are unanticipated losses or damage that cripple an organization and often lead to a survival mode. The following questions are examples of corporate survival situations that are the results of catastrophic risks. BP systematically underestimated physical risks, costing the company $20 billion and the CEO his job. Risk management failures forced the Johns-Manville company into Chapter 11 bankruptcy for 5 years. We will answer these and other real-world questions with tools of risk assessment and management. You will learn the good and bad points of using fault and event trees, statistical problem formulation, probabilistic risk analysis, human health risk tools, and risk communication as inputs for corporate strategy and resource allocation. We will discuss how to quantify, analyze, and manage physical risks that may be essential to your business. We will learn how companies deal with (or deny) the inevitable risks that accompany any business. The course contains four modules: 1) Definition of catastrophic risk; 2) Examples of company-threatening risks; 3) Decision models for physical risk management; and 4) Case studies. You will come out of this course with the skills to understand and manage catastrophic physical risks - skills that are increasingly valuable to companies worldwide.
Some of the questions we will examine in cases include the following. Did Toyota's secretive culture lead them to ignore risks that lit up the blogosphere and caused a 7 million vehicle recall? Was a billion dollar explosion a software failure, or a systems engineering failure? Should Saccharin have been removed from the market after tests showed it causes bladder cancer? How did Union Carbide kill 14,000 people, and nearly repeat the disaster half a world away? How did a cost-benefit analysis lead to "the most reprehensible decision in the history of American engineering" and an indictment for reckless homicide? How did China turn around its dismal airline safety record? (1/12)
Concentration: Operations Management
Academic Year: 2019-2020
Semester(s): Mini 4