Reference no: EM132294129

Risk Perception and Analysis Assignment - Perceptions of Risk

Part A - Risk Perception

Consider this case study, which you have seen before:

Unusually cold weather resulted in large snowfalls in Northern Europe.  There were major transport delays, particularly at major airports, such as London's Heathrow due to closed runways.  It took several days for snow to be cleared to the point where airports could operate at normal capacity.  Delays resulted in cancelled flights and passengers sleeping in terminals. Airlines suffered large losses as a result of this.

Consider the argument that more equipment should be owned by an airport owner to substantially speed up snow clearing.  This would result in much shorter delays and less losses for the airlines, but would have to be paid for by the airport owner.

In this case, the groups with views on this would be Group A: Passengers, Group B: Airlines' owners, Group C: Airports' owners.

Now, this case study is purely to illustrate the nature of such a risk.  In thinking about the answers to the questions below I don't want you to think about that particular group of affected passengers, airport or airlines etc. on that day, but to think about this risk as a general notion and the ideas for reducing it in a general sense. Clearly this sort of thing can happen in Northern Europe even though it is less frequent than in North America or Russia, for example.

1. (a) Complete a table (eg. Slide 17 in the slide set C5b Risk Perception Part B slides) that summarises the likely ways in which people in these different groups would react to such a proposal being made by a risk manager before such a dramatic event had happened. Clearly you have to ignore the case study and its influence on your thinking in order to do this. (b) Write a few words on what could be done, if you were the risk manager in question, to influence the perceptions of the group that would have to authorise the expenditure needed to improve snow clearing capability, explaining (in the context of the subject matter of this topic) why those actions would change the dynamics of the propensity to make a decision to authorise the money.

2. Secondly, do the same thing as in 1 above but in the immediate aftermath of the situation described in the case study.

3. Slide 21 in this slide set summarises the various influences that can affect people's perceptions of risk. List each of these ten influences and explain briefly and accurately in the context of the subject matter of this topic how each of those influences will affect the thinking of Group A: Passengers who actually experienced the delays.

Part B - Risk Assessment

1. In your own words explain the situations in which the proposal to increase snow clearing capability (the case study in Part B) could be seen as a 'Must do', a 'Should do' or a 'Could do' proposal. Which one of these is likely to be the case at an airport such as London Heathrow, in your view? Say why you have this view.

2. The increase in snow clearing capability at the airfield will require capital expenditure on equipment and will also incur annual operational costs (fuel, maintenance, training etc.). Describe succinctly for me, how you see these facts being used in a cost benefit analysis if an estimate of the risk associated with heavy snow falls has been made. A cost benefit analysis, as the name indicates, looks at how much it will cost (both capital and recurrent expenditure) to achieve a benefit (which is capable of being described in financial terms). The benefit is usually expressed in a $ per year figure and it may be due to increased income or reduced operating costs. Hence a payback period can be estimated - eg. $100,000 capital now will reduce annual operating costs by say, $50,000per annum. So the capital will be paid back in 2 years.

3. Would consideration of the best practical technology or best available technology requirements apply to such a decision? Explain your thoughts. Even if you didn't think that such consideration did apply, let's say for the sake of the exercise that it did, tell me which of the two you think would be applicable to the decision making process and why.

Attachment:- Assignment File.rar