Inderscience Publishers

Potential benefit, potential loss and potential gain from competing opportunity and failure events

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A quantitative framework is presented dealing with competing opportunity and failure events in a finite time interval. The framework is based on the new fundamental concepts potential benefit, potential loss and potential gain, for which closed-form expressions regarding their distributions are derived and verified by a simulation. It is demonstrated that a decision strategy based on multiple event occurrences yields a very different gain compared with a decision strategy based on the next event occurrence. The results are illustrated by examples supporting decision making.

Keywords: production availability, failure, opportunity, potential benefit, potential gain, potential loss, reward, risk assessment, risk management, simulation, decision making

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