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Shipping Forecast: DNV GL Determines Risk Mitigation Strategies for the Shipping Industry with Palisade’s Decision Support Software
DNV GL uses Palisade’s PrecisionTree and @RISK

13 November 2014 - DNV GL uses Palisade’s PrecisionTree and @RISK decision support software to determine the risk of an incident occurring to a ship or its systems and the consequences should one occur. The software tools enable the world’s largest classification society to undertake cost-benefit analysis so that informed decisions can be made about the best strategies to mitigate on-board risks.

A key activity for DNV GL’s Safety Research unit on national, international and internal projects is risk assessment for ships and ship systems The aim is to identify risk reduction measures, and deploy cost-benefit analysis to determine their economic feasibility. For instance, navigational aids will reduce the probability of collision and grounding accidents, while damage-stability measures will limit the consequences of such an event, should it occur.

DNV GL’s Safety Research unit uses Palisade’s decision tree software, PrecisionTree, to develop the risk models that apply to: (1) crew; (2) environment; and (3) property. (Risk to persons is usually quantified in terms of ‘potential loss of life’ or individual risk to crew or passengers. Risk to the environment refers to potential damage by events such as oil spills or release of dangerous cargo. Risk to property relates to the loss of, or damage to, the ship.)

The sequences in DNV GL’s PrecisionTree event trees are populated with occurrence probabilities (e.g. the dependent probability that a ship in a collision is struck) that are derived from analysing casualty reports. Data comes from ship accident investigation reports from commercial and public databases. Alternatively, casualty estimates can be developed using numerical models.

Although databases provide key input for the development of quantitative risk models, information - such as accident causes, boundary conditions, and the consequences of an accident - is often vague or missing, leading to increased uncertainty in the quantitative risk models.

To account for uncertainty and make it visible in risk evaluation and cost-benefit assessments, DNV GL’s Safety Research unit uses @RISK to perform Monte Carlo simulation. This factors in the uncertainty of input parameters for the risk models, and illustrates the impact on the estimates provided for the assessment of a current level of risk, as well as the cost-efficiency of risk-mitigating measures.

“PrecisionTree makes it straightforward to quickly develop event trees. These are essential to our analysis when looking at how to reduce both the number of shipping incidents and the consequences should they occur,” explains Dr Rainer Hamann, Topic Manager Risk Assessment, Safety Research at DNV GL SE. “At the same time we have to be realistic about the accuracy of our data inputs and, by means of distributions and Monte Carlo simulation, @RISK enables us to be clear about the level of uncertainty contained in each model. Embedded in the Microsoft environment, it also allows us to incorporate standard Excel features, making it easy to use.”

DNV GL’s core purpose is to safeguard life, property and the environment by enabling its customers to improve the safety and sustainability of their businesses. DNV GL plays a significant role in undertaking major research and development projects with its partners in the shipping industry. A key element is DNV GL’s focus on the pro-active use of risk assessment and cost-benefit techniques to enhance safety and security in the maritime world.

About Palisade
Palisade Corporation is a software developer and solution provider that produces decision support tools for professionals in many industry sectors. The company was founded in 1984, and at present more than 400,000 people use Palisade’s software in fields that range from finance to oil and mineral exploration, real estate to heavy manufacturing and pharmaceuticals to aerospace. Its software is used by more than 90 percent of Fortune Global 500 companies. Sample clients include Royal Dutch Shell, Petrobras, Procter & Gamble, PEMEX, China Minmetals, Mitsubishi, Merck, Unilever, Allianz, Total, Raytheon and BHP Billiton, as well as top business schools around the world.

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