Multiobjective Risk‐Impact Analysis Method

Abstract

This paper integrates two methodologies of risk and impact analysis—the partitioned multiobjective risk method (PMRM) and the multiobjective, multistage impact analysis method (MMIAM). The PMRM, in an effort to overcome the difficulties created by commensurating extreme events that have catastrophic impacts with those that have more frequent but less harmful consequences, introduces the use of conditional expectations for different regimes of probabilities and damages. The MMIAM is a multiobjective decisionmaking method for impact analysis which explicitly develops trade‐offs among different objectives at different stages or periods. Decision makers who must act under conditions of extreme risk and uncertainty often find that they are more interested in knowing “what not to do” than they are in optimizing their current objectives (the more traditional aim of decision‐making methodologies). This paper focuses on a way to answer their needs, in which major elements of both the PMRM and the MMIAM are combined in a new, integrated methodology, termed here the multiobjective risk‐impact analysis method (MRIAM). The new methodology incorporates risk and impact analysis within a dynamic multiobjective decision‐making framework. To demonstrate the usefulness of the integrated methodology, an example problem concerning the environmental effects of pollutant emissions over a number of years is formulated, solved, and analyzed.