Seismic damage affecting industrial-process components can cause severe disruption, leading to not-negligible profit reduction associated with business interruption. Hence, the implementation of a proper seismic risk mitigation strategy is often required, accounting for financial issues as well. This study presents a novel probabilistic seismic risk assessment framework able to quantify business-interruption losses on the basis of a company’s balance-sheet data. The framework contains a financial module that uses a profitability index (PI) for identifying the most profitable seismic retrofit strategy to be implemented, given a reference time window and available budget. Application of the framework to a typical Italian cheese factory is also illustrated. Results show how business-interruption losses are comparable with direct costs for the rehabilitation of seismically damaged components. Additionally, it is demonstrated that PI can be considered a suitable financial indicator, and evaluating the contemporary benefit has a primary importance when a retrofit strategy is applied to more components.

Profitability Analysis for Assessing the Optimal Seismic Retrofit Strategy of Industrial Productive Processes with Business-Interruption Consequences

Hofer, Lorenzo;Zanini, Mariano Angelo
;
Faleschini, Flora;Pellegrino, Carlo
2018

Abstract

Seismic damage affecting industrial-process components can cause severe disruption, leading to not-negligible profit reduction associated with business interruption. Hence, the implementation of a proper seismic risk mitigation strategy is often required, accounting for financial issues as well. This study presents a novel probabilistic seismic risk assessment framework able to quantify business-interruption losses on the basis of a company’s balance-sheet data. The framework contains a financial module that uses a profitability index (PI) for identifying the most profitable seismic retrofit strategy to be implemented, given a reference time window and available budget. Application of the framework to a typical Italian cheese factory is also illustrated. Results show how business-interruption losses are comparable with direct costs for the rehabilitation of seismically damaged components. Additionally, it is demonstrated that PI can be considered a suitable financial indicator, and evaluating the contemporary benefit has a primary importance when a retrofit strategy is applied to more components.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11577/3254236
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