Optimal budget allocation for risk mitigation strategy in trucking industry: An integrated approach

Trucking industry plays a major role in the transportation of goods across different geographical locations. The operational complexities of the trucking industry lead to various risks. This study focuses on effective design and implementation of risk-mitigation strategies for the trucking industry with consideration for budget restrictions. In this paper, both subjective and objective attributes are considered in the mathematical modeling and thereby tries to capture realism in the strategic decision-making process. The results of the study provide novel insights that relate the impact of risk on the cost of mitigation. Further, the effect of three characteristics, targeted risk level (TRL), implementation cost (IC) of strategy, and the probability of risk occurrence (PO) is shown in designing and developing risk-mitigation strategies. The experimental analysis not only augments theoretical knowledge related to risk management decision-making processes but also contributes to designing and developing a risk-mitigation strategy under economic constraints. From the managerial perspective, the study demonstrates how decision-makers can benefit from an integrated approach to develop a more holistic understanding of risk-management processes. This study also provides guidelines in policy selection considering higher return on investment (ROI). The paper concludes by highlighting the key findings and discussing opportunities for future research.