The Asset Reinvestment Logic Diagram End of Asset Life Reinvestment Decision Support Tool

Adding risk mitigation to the risk worksheet As noted in text associated with Box 9, risk mitigation can be viewed as a set of factors that reduce the core risk score. The set of mitigation solutions relevant to each asset or class of assets is determined by staff. A score for each mitigation solution is awarded a score equal to the expected level of reduction in risk the solution is thought to provide. This assignment of a factor value is entirely judgmental but should be carefully reviewed for consistency. Mathematically, since the score is a percentage value less than one, the impact is to reduce the core risk score. Like all such judgmental scores, the values can be gamed; it is important, therefore, that the scores be reviewed by a team of knowledgeable managers who, as part of the overall review process, probe for gaming in the scoring. The illustration used in this slide comes from WERF’s Business Risk Exposure Tool. End of Asset Life Reinvestment Decision Support Tool

Adding risk mitigation to the risk worksheet Mini-Exercise The final step is to link the selected strategies to relevant line items in the emerging operating and capital budgets so that the link between plan and action in the appropriate year is better assured. End of Asset Life Reinvestment Decision Support Tool