Development of a justification process for selecting alternative risk reduction measures

Pavlo Saik¹Vitalii Tsopa²Olena Yavorska³Serhii Cheberiachko³Mariia Brezitskа³Andrii Yavorskyi³Vasyl Lozynskyi^1,3*

• ¹Belt and Road Initiative Center for Chinese-European Studies (BRICCES), Guangdong University of Petrochemical Technology, Maoming, China
• ²International Management Institute (MIM-Kyiv), Kyiv, Ukraine
• ³Dnipro University of Technology, Dnipro, Ukraine

The aim of this study is to develop a process for determining a set of alternative preventive measures to reduce risk levels, using the example of reducing the incidence of occupational pneumoconiosis in miners under conditions of financial cost minimization. The research was conducted using a system analysis to identify priority directions for risk reduction under limited financial resources, based on the relationship between the measures and their risk reduction efficiency. As a result, a methodology was developed to justify the selection of risk reduction measures from a set of alternatives, based on the calculation of an efficiency factor grounded in financial losses. An eleven-step risk management process was designed to determine alternative preventive measures, characterized by feedback loops that enable the selection of optimal risk reduction strategies. The study presents algorithms for solving three types of decision-making problems regarding the selection of combinations of preventive measures from a defined set of alternatives. These algorithms consider the priority of measures and allow for a comparison between the effectiveness of several measures versus a single one that can also reduce the risk to an acceptable level. An example of calculating the efficiency of preventive measures to reduce the risk of pneumoconiosis among miners is provided. A key feature of the study is the improvement of the risk management process by integrating the efficiency factor of risk reduction under financial constraints.