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Multipurpose Aggregation in Risk Assessment

Author

Listed:
  • Zoltán Kovács

    (Department of Supply Chain Management, Institute of Management, Faculty of Business Administration and Economics, University of Pannonia, 8200 Veszprem, Hungary)

  • Tibor Csizmadia

    (Department of Management, Institute of Management, Faculty of Business Administration and Economics, University of Pannonia, 8200 Veszprem, Hungary)

  • István Mihálcz

    (Department of Quantitative Methods, Institute of Management, Faculty of Business Administration and Economics, University of Pannonia, 8200 Veszprem, Hungary
    Siix Hungary, 2750 Nagykorös, Hungary)

  • Zsolt T. Kosztyán

    (Department of Quantitative Methods, Institute of Management, Faculty of Business Administration and Economics, University of Pannonia, 8200 Veszprem, Hungary)

Abstract

Risk-mitigation decisions in risk-management systems are usually based on complex risk indicators. Therefore, aggregation is an important step during risk assessment. Aggregation is important when determining the risk of components or the overall risk of different areas or organizational levels. In this article, the authors identify different aggregation scenarios. They summarize the requirements of aggregation functions and characterize different aggregations according to these requirements. They critique the multiplication-based risk priority number (RPN) used in existing applications and propose the use of other functions in different aggregation scenarios. The behavior of certain aggregation functions in warning systems is also examined. The authors find that, depending on the aggregation location within the organization and the purpose of the aggregation, considerably more functions can be used to develop complex risk indicators. The authors use different aggregations and seriation and biclustering to develop a method for generating corrective and preventive actions. The paper provides contributions for individuals, organizations, and or policy makers to assess and mitigate the risks at all levels of the enterprise.

Suggested Citation

  • Zoltán Kovács & Tibor Csizmadia & István Mihálcz & Zsolt T. Kosztyán, 2022. "Multipurpose Aggregation in Risk Assessment," Mathematics, MDPI, vol. 10(17), pages 1-20, September.
    • Handle: RePEc:gam:jmathe:v:10:y:2022:i:17:p:3166-:d:905547
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    References listed on IDEAS

    as
    1. Tatiana Pedraza & Jesús Rodríguez-López, 2020. "Aggregation of L -Probabilistic Quasi-Uniformities," Mathematics, MDPI, vol. 8(11), pages 1-21, November.
    2. Bjørnsen, Kjartan & Aven, Terje, 2019. "Risk aggregation: What does it really mean?," Reliability Engineering and System Safety, Elsevier, vol. 191(C).
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    Cited by:

    1. Zsolt Tibor Kosztyán & Zoltán Kovács, 2023. "Preface to the Special Issue on “Mathematical Methods and Operation Research in Logistics, Project Planning, and Scheduling”," Mathematics, MDPI, vol. 11(1), pages 1-3, January.

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