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ICM · Research & Decision Studio · risk-observatory · Model 1.1.0 · Illustrative inputs

Risk and assurance

Risk observatory

Connect event mechanisms to control reliability and challenge expected-loss resilience.

Model 1.1.0 · Illustrative inputs

Method and assumptions
Risk / controlsIllustrative composition
An illustrative cause, event and consequence structure. The arrangement does not quantify loss, probability or control effectiveness.

The interactive model requires JavaScript. This saved default illustration remains readable if the runtime is unavailable. Values are computed from the canonical model at build time; they describe fictional inputs, with full calculation precision.

ICM · Risk observatory · Model 1.1.0 · Default illustrative record

Default illustrative result

The supplied controls reduce annual expected loss from 2,436 to 1,338.76 USDk, at a cost of 450 USDk/year. Net control value is 647.24 USDk/year. The stressed control system produces 3,643.08 USDk/year of expected loss. These sums describe expectations, not a maximum loss or tail confidence level.

Default result metrics
MetricValueUnitCalculation boundary
Gross annual expected loss2436USDk/year
Residual annual expected loss1338.7584USDk/year
Stressed annual expected loss3643.078656USDk/year
Net annual control value647.2416USDk/yearAvoided expected loss less annual control cost.
Risk and control expected-loss ledger
RiskGross annual probability%Gross event severityUSDkGross expected lossUSDk/yearResidual event probabilityEvent-conditional severityUSDkResidual expected lossUSDk/yearAnnual control costUSDkNet control valueUSDk/yearBreak-even shared availability%
Demand erosion1270008400.09485914.556962025316560.7130149.332.581453634085214
Execution slippage3028008400.212260474.6180185.436.94581280788177
Supply interruption1842007560.098823070.8196721311474303.4584140312.541625.36783358701167
Shared control availability mixture
RiskShared control stateState weightEvent probability in stateSeverity in stateUSDkExpected-loss contributionUSDk/year
Demand erosionControls unavailable0.30.127000252
Demand erosionControls available0.70.0845250308.7
Execution slippageControls unavailable0.250.32800210
Execution slippageControls available0.750.181960264.6
Supply interruptionControls unavailable0.180.184200136.08
Supply interruptionControls available0.820.0812520167.3784
Stress mechanism ledger
RiskStressed gross probabilityStressed shared availability%Residual event probabilityEvent-conditional severityUSDkExpected lossUSDk/year
Demand erosion0.192500.16328791.1764705882361434.72
Execution slippage0.48550.37443422.46153846153861281.3696
Supply interruption0.288620.1897924884.236722306525926.989056
Uniform shared-availability sensitivity
Shared availability for every risk%Residual expected lossUSDk/yearLoss plus control costUSDk/year
024362886
102292.1922742.192
202148.3842598.384
302004.5762454.576
401860.7682310.768
501716.962166.96
601573.1522023.152
701429.3441879.344
801285.5361735.536
901141.7281591.728
100997.921447.92

Inputs behind this result

Current general assumptions
Assumption and unitExact supplied value
Stress probability multiplier (×)1.6
Stress impact multiplier (×)1.4
Stress reliability reduction (percentage points)20
Risk register · descriptions
RiskCauseTop eventConsequence
Supply interruptionSingle source exposureInput supply stopsLost production
Execution slippageLate critical equipmentMilestone is missedDelay and standby cost
Demand erosionCustomer concentrationMajor customer exitsLost contribution
Risk register · numerical assumptions
RiskAnnual event probability%Loss per eventUSDkPrevention effectiveness%Mitigation effectiveness%Shared control availability%Annual control costUSDk
Supply interruption184200554082140
Execution slippage302800403075180
Demand erosion127000302570130
Download exact default inputs and output

Transparent method

  1. Gross expected loss = probability × event impact.
  2. Controls share one Bernoulli availability state. Residual expected loss = gross expected loss × [(1 − reliability) + reliability × (1 − prevention) × (1 − mitigation)].
  3. Expected avoided loss = gross expected loss × shared availability × (prevention + mitigation − prevention × mitigation). Net control value = avoided expected loss − annual control cost.
  4. Stress changes gross probability and impact and reduces control reliability; probabilities cap at one with an explicit warning.
  5. Residual event probability is a marginal; severity is conditional on an event. Break-even availability = annual control cost / [gross expected loss × (prevention + mitigation − prevention × mitigation)], if attainable.
  6. Event-conditional severity is unavailable when the marginal event probability is zero. A zero monetary severity remains meaningful when the event population exists.
  7. Complements, stress clipping, control-value sums and break-even comparisons use exact rational arithmetic for canonical decimal input numbers. JSON exports retain numerator, denominator and a forty-significant-digit decimal; metrics and charts use numeric approximations.
  8. Equal exact residual losses use literal name order independent of browser language for consistent display; this name order is not a causal risk distinction.

Limits

  • One annual event per risk model, additive expected losses and one shared Bernoulli availability state for prevention and mitigation.
  • No tail distribution, correlation, causal estimation, insurance recovery or regulatory adequacy is inferred.
  • Effectiveness and reliability can double count uncertainty unless users define them separately.
  • Numerical input precision: use zero or absolute values of at least 0.000000001. Smaller nonzero inputs are rejected explicitly.
  • Canonical decimal evaluation begins after JSON numbers have been parsed. Digits already lost during parsing cannot be recovered. Equal rounded gross and residual means do not establish zero avoided loss; retain the direct avoided-loss and net-value outputs.

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