Owners and managers of constructed facilities need help in optimizing protection against low-probability, extreme events, such as natural hazards and terrorist acts. Economic theory helps decision makers choose among engineering alternatives, management practices, and financial mechanisms that reduce the risk of damages and injury from hazards. This paper describes applied economic methods for making those choices and a user-friendly, decision-support software tool that implements a structured economic analysis based on those methods. The underlying analysis is based on ASTM standard economic methods. The software guides users in data entry and calculated economic measures of merit for alternative protection strategies. The software is general enough to treat both natural hazards and man-made hazards, including terrorism, sabotage, and industrial accidents. Monte Carlo simulations generated by the software help users evaluate uncertainty and graph risk profiles for alternative protection strategies.
Proceedings Title: Proceedings of the 48th Annual Meeting of AACE
Conference Dates: June 13-16, 2004
Conference Title: AACE International Transactions
Pub Type: Conferences
building economics, economic analysis software, hazard mitigation, life-cycle costing, risk analysis, terrorism