An Approach for Optimal Allocation of Safety Resources: Using the Knapsack Problem to Take Aggregated Cost‐Efficient Preventive Measures

Genserik L. L. Reniers and Kenneth Sörensen

Risk Analysis, 2013, vol. 33, issue 11, 2056-2067

Abstract: On the basis of the combination of the well‐known knapsack problem and a widely used risk management technique in organizations (that is, the risk matrix), an approach was developed to carry out a cost‐benefits analysis to efficiently take prevention investment decisions. Using the knapsack problem as a model and combining it with a well‐known technique to solve this problem, bundles of prevention measures are prioritized based on their costs and benefits within a predefined prevention budget. Those bundles showing the highest efficiencies, and within a given budget, are identified from a wide variety of possible alternatives. Hence, the approach allows for an optimal allocation of safety resources, does not require any highly specialized information, and can therefore easily be applied by any organization using the risk matrix as a risk ranking tool.

Date: 2013
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https://doi.org/10.1111/risa.12036

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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:33:y:2013:i:11:p:2056-2067

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