Abstract
Abstract Safety management is usually conducted by selecting among a vast array of different safety measures to reduce the frequency or to mitigate the consequences of undesired events, or both. it is impossible to take all of possible safety measures in a large chemical industrial area since protection resources and safety budgets are always limited. As a result, financial and economic issues related to risk play an indispensable role in the decision-making process with respect to safety management. This chapter firstly introduces the risk-based decision-making on safety measures in the process industry. Second, the costs related to safety measures and the costs associated with major accidents are summarized and the decision-making based on the total costs related to safety is developed. Then, cost-benefit analysis (CBA) based on net present value (NPV) and cost-effectiveness analysis (CEA) are illustrated to support decision-making on protection strategies. Finally, economic optimization models based on CBA and CEA as well as a relative optimization algorithm are presented to obtain the most profitable and cost-effective protection strategy.
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