• Journal of Korean Institute of Industrial Engineers
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• v.21 no.3
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• pp.299-311
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• 1995

Conventional discounted cash flow techniques fail to capture the risk associated with investments. This paper proposes an annual cash flow model that considers risk, cost structure and inventory liquidation in the evaluation of investment alternatives. The risk differential of investments is included using the capital asset pricing model while the stochastic version of the cost-volume-profit approach is used to consider inventory liquidation and cost structure. Tradeoffs between fixed and variable costs have been investigated, and portrayed using iso-cash flow curves. The proposed cash flow model has been developed, in particular, to enable an accurate evaluation of advanced manufacturing systems.

• Journal of Korean Society for Quality Management
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• v.50 no.1
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• pp.125-138
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• 2022

Purpose: Failure Mode and Effect Analysis (FMEA) is a widely utilized technique to measure product reliability by identifying potential failure modes. Even though FMEA techniques have been studied, the form of Risk Priority Number (RPN) used to evaluate risk priority in FMEA is still questionable because of its shortcomings. In this study, we suggest common RPN(cRPN) to resolve shortcomings of the traditional RPN and show the extensibility of cRPN. Methods: We suggest cRPN which is based on Cobb-Douglas production function, and represent the various application on weighting risk factors, weighted RPN in a mathematical way, and show the possibility of statistical approach. We also conduct numerical study to examine the difference of the traditional RPN and cRPN as well as the potential application from the analysis on marginal effects of each risk factor. Results: cRPN successfully integrates previously suggested approaches especially on the relative importance of risk factors and weighting RPN. Moreover, we analyze the effect of corrective actions in terms of econometric analysis using cRPN. Since cRPN is rely on the reliable mathematical model, there would be numerous applications using cRPN such as smart factory based on A.I. techniques. Conclusion: We propose a reliable mathematical model of RPN based on Cobb-Douglas production function. Our suggested model, cRPN, resolves various shortcomings such as consideration of the relative importance, the effect of combinations among risk factors. In addition, by adopting a reliable mathematical model, quantitative approaches are expected to be applied using cRPN. We find that cRPN can be utilized to the field of industry because it is able to be applied without modifying the entire systems or the conventional actions.

• Proceedings of the Korean Society for Noise and Vibration Engineering Conference
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• 2014.10a
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• pp.347-349
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• 2014

Model verification and validation (V&V) is a current research topic to build computational models with high predictive capability by addressing the general concepts, processes and statistical techniques. The hypothesis test for validity check is one of the model validation techniques and gives a guideline to evaluate the validity of a computational model when limited experimental data only exist due to restricted test resources (e.g., time and budget). The hypothesis test for validity check mainly employ Type I error, the risk of rejecting the valid computational model, for the validity evaluation since quantification of Type II error is not feasible for model validation. However, Type II error, the risk of accepting invalid computational model, should be importantly considered for an engineered products having high risk on predicted results. This paper proposes a technique named as the response-adaptive experimental design to reduce Type II error by adaptively designing experimental conditions for the validation experiment. A tire tread block problem and a numerical example are employed to show the effectiveness of the response-adaptive experimental design for the validity evaluation.

• International conference on construction engineering and project management
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• 2013.01a
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• pp.602-607
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• 2013

Financial risks associated with capital investments are often measured with different feasibility indicators such as the net present value (NPV), the internal rate of return (IRR), the payback period (PBP), and the benefit-cost ratio (BCR). This paper aims at demonstrating practical applications of probabilistic feasibility analysis techniques for an integrated feasibility evaluation of the IRR and PBP. The IRR and PBP are concurrently analyzed in order to measure the profitability and liquidity, respectively, of a cash flow. The cash flow data of a real wind turbine project is used in the study. The presented approach consists of two phases. First, two newly reported analysis techniques are used to carry out a series of what-if analyses for the IRR and PBP. Second, the relationship between the IRR and PBP is identified using Monte Carlo simulation. The results demonstrate that the integrated feasibility evaluation of stochastic cash flows becomes a more viable option with the aide of newly developed probabilistic analysis techniques. It is also shown that the relationship between the IRR and PBP for the wind turbine project can be used as a predictive model for the actual IRR at the end of the service life based on the actual PBP of the project early in the service life.

• Journal of the Korean Society of Marine Environment & Safety
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• v.23 no.3
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• pp.273-278
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• 2017

This paper is to study a technique to detect the real-time route aberrance on the passage route using bumper area of the ship domain theory. In order to evaluate the risk of route aberrance, a quarter line was created between the center line and the outer line, and a passage route with the image line outside the outer line was designed. It calculated the real-time route aberrance with the vessel bumper area to measure the risk level on the passage route. The route aberrance using overlap bumper area was simulated through three kinds of scenario vessel at the designed passage route. In this paper, we proposed Ratio to Aberrance Risk as one of the evaluation parameter to detect the route aberrance risk at each sector in the passage route and to give the evaluation criteria of 5 levels for seafarer's navigation safety. The purpose of this work is to provide the information of the route aberrance to seafarer automatically, to make it possible to prevent the human errors of seafarer on the high risk aberrance route. As the real-time risk of route aberrance on the passage route is automatically evaluated, it was well thought that seafarer can have only a little workload in order to know the risk of route aberrance at early-time. Following the further development of this work, the techniques for detecting the real-time route aberrance will be able to use the unmanned vessel.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.22 no.51
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• pp.151-161
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• 1999

For many decades, Deterministic DCF approach has been widely used to evaluate investment opportunities. Under new manufacturing conditions involving uncertainty and risk, the DCF approach is not appropriate. In DCF, Risk is incorporated in two ways: certainty equivalent method, risk adjusted discount rate. This paper proposes a determination method of the Risk Adjusted Discount Rate for economically decision making advanced manufacturing technologies. Conventional DCF techniques typically use discount rate which do not consider the difference in risk of differential investment options and periods. Due to their relative efficiency, advanced manufacturing technologies have different degree of risk. The risk differential of investments is included using $\beta$ coefficient of capital asset pricing model. The comparison between existing and proposed method investigated. The DCF model using proposed risk adjusted discount rate enable more reasonable evaluation of advanced manufacturing technologies.

• Journal of the Korean Society of Safety
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• v.36 no.4
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• pp.80-87
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• 2021

Risk assessment techniques are processes used to evaluate hazardous risk factors in construction sites, facilities, raw materials, machinery, and equipment, and to estimate the size of risk that could lead to injury or disease, and establish countermeasures. The most important thing in assessing risk is calculating the size of the risk. If the size of the risk cannot be calculated objectively and quantitatively, all members who participated in the evaluation would passively engage in establishing and implementing appropriate measures. Therefore, this study focused on predicting accidents that are expected to occur in the future based on past occupational accident statistics, and quantifying the size of the risk in an overview. The technique employed in this study differs from other risk assessment techniques in that the subjective elements of evaluators were excluded as much as possible by utilizing past occupational accident statistics. This study aims to calculate the size of the risk, regardless of evaluators, such as a manager, supervisor, safety manager, or employee. The size of the risk is the combination of the likelihood and severity of an accident. In this study, the likelihood of an accident was evaluated using the theory of Bud Accident Chainability, and the severity of an accident was calculated using the occupational accident statistics over the past five years according to the accident classification by the International Labor Organization.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2008.11a
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• pp.517-520
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• 2008

The city refreshing development projects in the domestic recently have been performed under leading of public institution laying stress on new city and existing urban district. These development projects are still staying in safety control level despite risk factor management at preliminary estimation stage has been more important factor to success and add value creation. Understanding inaccurately about various risk analysis techniques that can analyze risk factors and the insufficient application of step that can analysis technique s could make projects more difficult. Therefore, this research suggests the more effective methods for risk analysis that can control the risks in the pre-project evaluation stage.

• Journal of the Korean Professional Engineers Association
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• v.34 no.5
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• pp.77-81
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• 2001

The industrial accident in subway of late is increasingly coming to the front as a serious problem of society because a scale of industrial accident is a large size, and powerfulness, while the percent of accident is decreasing as a result of industrial facilities with the largeness of equipment, automation, and high horse-powering. In this paper, a study on the estimation of accident loss prevention cost and risk analysis in subway construction is proposed as an alternative to the techniques currently used in the general construction projects safety. Then the concept of risk evaluation using a risk assessment model is presented to drive value of risk and numerical example for risk analysis. A means for this does grasp the importance of educational factor by way of analyzing the causes of accident through statistical data of labor department, emphasizing the necessity and the importance of safety education, being helpful to act safety by decreasing insecure activity which ranks the majority of accident causes with putting the education program, form, method into practice that are suitable for a place of business.

• Journal of the Korea institute for structural maintenance and inspection
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• v.3 no.2
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• pp.233-240
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• 1999

Even though the recent construction safety disasters not only result in the loss inside construction sites but also become to a large public disasters, safety activities are managed in an irrational way and safety rules are ignored in the construction sites which leads to occur same type of disasters repeatedly. In this paper, a fuzzy set theoretic approach to risk analysis is proposed as an alternative to the techniques currently used in the general construction projects safety. Then the concept of risk evaluation using linguistic representation of the likelihood, exposure and consequences is introduced. A risk assessment model using approximate reasoning technique base on fuzzy logic is presented to drive fuzzy values of risk and numerical example for risk analysis is also presented to illustrate the results.