Customer Reviews

Risk Analysis of Complex and Uncertain Systems (International Series in Operations Research & Management Science)

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This is an excellent, approachable read for any risk manager; understanding its examples requires only elementary probability, statistics and calculus, though the foundations are much deeper. The author uses direct language, and does not hesitate to declare a fashionable risk analysis technique "worse than useless." The author shows how not to do risk analysis, using simple but devastating examples to illustrate the weaknesses of prioritized investments, subject matter expert opinion, risk matrices and qualitative risk assessments, and the independence assumption. Then, case studies present constructive examples of good practice. Refreshingly, this text clearly distinguishes between threats from Mother Nature, and those posed by an intelligent adversary. There is unevenness, because this is an edited ensemble of papers originally published in a variety of technical journals; however, this is also a strength, because the appeal and scholarship underlying biological, engineering, and social science examples is broad. This is not a how-to guide, and won't help fill in a blank page risk analysis; however, this is an excellent source for the skeptical consumer of contemporary risk management advice and products, and hopefully will have some influence with policy makers who are the source of simplistic and dangerous guidance.

Gerald G. Brown
Distinguished Professor of Operations Research
Naval Postgraduate School
National Academy of Engineering
INFORMS Fellow

I have used Cox's research in my own recent book, . He is a colleague who has written numerous articles on this topic and has combined those along with his practical experience to write this critical book. It touches on every major issue in the area of risk assessment - which includes many issues that other risk assessment authors either dare not touch or are simply unaware of.

The most impressive feature of this book is the litany of examples in literally every chapter. He draws on a wide spectrum of different fields including public health, airline safety, engineering risks and terrorism. It is an extremely comprehensive treatment of quantitative risk assessment methods and each method is backed up with practical applications.

For me, the most important part of this book is the large section Cox dedicates to "Avoiding Bad Risk Analysis". He systematically debunks what I think are the most popular methods in business today. I even used his phase "Worse than Useless" to describe such methods in my book (properly attributed, of course) because nothing else says it better.

But Cox doesn't just endorse every method used in quantitative risk assessment. He is careful to point out the potential flaws and proposes specific solution. Debunking these popular methods is the first step. The second step is adopting an improved quantitative approach to risk assessment. This book covers all of it.

Highly recommended.