Risk Management for Analytic Hierarchy Process

Describe about the Risk Management for Analytic Hierarchy Process.

Introduction

Airports are vital national resources that play huge role in the transportation of goods and people and contribute to national, regional and international commerce. A nation’s aviation network connects with other modes of transportation resulting in the economic development of the state. Research is necessary for solving operating issues and problems, ranging from adopting new technologies, innovation into the airport industry. Airport operators deal with risks of varied magnitude on a daily basis. The risk is sometimes within their control while in some case it escalates to a level that is insurmountable. Various guidelines and regulations have been formulated and developed to manage risks associated with airport operations. The following segments explains various risk assessment models like PAVE (Personal, Aircraft, Environment and External pressures), Rotating propellers or jet blasting and hazardous materials like oil spillage, fuel, etc. With the traffic growth, it is likely that the accidents would likely to increase if the safety measures remain constant. Safety risk management is a key component in case of airport operation, which looks into the future rather than only reacting to past events as a mechanism for enhancement of safety. The following discussion analyses the total risk of the selected entity Rajiv Gandhi International Airport and implementation of some of the risk negating techniques made into the project.

Literature Review

According to Liu et al., (2013), various risks and accidents are associated with the pilots and other professionals who are present in the flight. It is stated that majority of the flight accidents have occurred due to the errors caused by the pilot of the flight. The error gives birth to a series of events that are responsible for the accidents of flights. However, risks of accidents can be reduced if different tools of risk management are successfully implemented during travel or by pilots. Pilots of are trained with various measures of safety while facing any misbalance in the flight operations. In the training schedule, pilots are taught various aspects of risk management including SRM (single pilot resource management). TAA (Technologically Advanced Aircraft) are increasing in number that changes the flight training standards.

Criteria and areas of Risks that PAVE considers

Apart from various measures of risk management PAVE is specialized for pilots (Liu et al., 2013). As stated by Halford, (2016), PAVE is a checklist that is the acronym of Pilot Aircraft Environment and External pressures. The first alphabet of ‘PAVE’ i.e. P refers to the safety of the pilot of the aircraft. It includes many security aspects regarding the readiness of pilot to fly the particular aircraft. The second alphabet i.e. A referring to aircraft.

In this section, the equipment of aircraft is checked whether the pilot is comfortable in handling the flight operations or not. The third part of the checklist i.e. V refers to the environment. It includes the forecast of weather along with the ability of the pilot in flying the aircraft in that particular weather conditions. Last part of the checklist i.e. E denotes external pressure. Usually, pilots are known for their firm goals. External pressures affect the trip of a pilot. It is related to the psychological perspective of pilots.  Different airlines provided these safety related training to the pilots flying their aircraft (Halford, 2016).

Different type of risk and hazard

Before delving into how risk can be managed, it is imperative to understand what risk is all about and how it has relation with hazards. Some hazards are obvious in the form of fire. In the airport, an aircraft while driving may cause loss owing to a braking capability that would result in an accident. Some hazards are indescribable, to say the least. Rotating propellers or jet blasting and hazardous materials like oil spillage, fuel, and others are general when it comes to risk in the airport. The equipment and materials that are common to the airport industry are not hazardous by themselves. However, when they become a part of dangerous condition they are considered as hazards. The Rajiv Gandhi International airport would also have to encounter unique hazards based on their processes and configurations. The SRM process as elucidated below would be a catalyst in managing such hazards. On the other hand, the airport should be wary of relying on a PHL. Although PHL technique is effective in the proper identification of hazards yet, it may come with a shortcoming (Wilke et al., 2014). 

Barring those, the airport has encountered strategic risk. Based on the industry forecasts, air traffic is expected to reach to around 93 million passengers, 8 million cargos by the end of 2030. Operational risks may be identified as potential degradation of service delivery centers, challenges of aging facilities, and unforeseen disruptions to flow management. The activities of Rajiv Gandhi International Airport are exposed to a wide range of financial risks. Interest rate risk, liquidity risk, and credit risks create an impediment to the operation of the airport. Aviation and Airport are fundamental to the operation of Rajiv Gandhi International Airport (RGI). Safety is measured by the by the rate of passenger injuries and airport staffs which form a key element in the corporate goals of the organization (Ruskin, 2013).

The effectiveness of IT systems is helpful to facilitate the safe operational procedure of Rajiv Gandhi International Airport. Any interruption of the IT services may result in a disorder of airport operation. Risks and threats may be in a radar system, ATF and usage of obsolete information technology equipment form a significant threat to the functioning of the entity. Violation of aviation law, non-compliance with desired conduct may invite legal repercussions on the airport. Some risks may be standalone while others entail over political, regulatory and financial affairs. Public sentiment and diverse socio-economic dynamics pose a severe threat to the entire operation of Rajiv Gandhi International Airport. Here, continuous engagement with the stakeholders is performed to enhance about the organization’s long-term and immediate developments. The airport expansion has been initiated to meet the long-term goal of the airport. Resources having considerable airport experience and would be in huge demand to manage the impending development project of Rajiv Gandhi International Airport (Aminbakhsh et al., 2013).

Case Project risk identification and assessment

4.1. Business needs and requirements, stakeholders, managerial challenges, constraints and expectations, project objectives and business case: The risk identification and mitigation process must include stakeholders of Rajiv Gandhi International Airport for identification of different challenges that may arise in the process of the risk assessment in the future. Apart from that, managerial challenges are a vital aspect of consideration that may hinder the process. The project managers are required to make a thorough assessment of the business needs, resources and resources that would be required in order to complete the project. In this regard, the project managers are required make a comprehensive budget and forecasts estimates to understand the expenses that would be required to execute the project and how these activities would lead to completion of the project (Kendrick, 2015).

4.2. Goals for managing case project over its life: For running any project, a stipulated goal is set. The goal for the risk management plan is to save Rajiv Gandhi airport from the operational hazards as well as other hazards in near future. PAVE models as well as other models are used as risk mitigation tool (Wilke et al., 2014). Therefore, it is important to determine apparent and future risks involved with the project that may affect the project successful execution. Moreover, the project managers are required to develop and frequently update the risk register in order to take most appropriate risk management strategy (i.e. avoidance, transfer and mitigation).

4.3. Identification of risks, uncertainties, opportunities, constraints, complexities: However, the mitigation plan contains many opportunities, risks, complexities, constraints and uncertainties that may emerge in near future. Various mitigations and actions are to be implemented in the plan so that opportunities are utilized and risks, uncertainties are to be avoided.

4.4. Qualitative Risk evaluation: Qualitative risk evaluation for the airport is required for analysis of possible risks in the risk mitigation process. If risks are identified and evaluated in a proper way then the solutions are formulated in a proper manner. For this evaluation, project managers are required to undertake brainstorming session with all the stakeholders to determine the risks involved. In addition, SWOT analysis can also employed assess the risks, once the various risks are identified, managers should rank them on the basis of perceived cost to the project and develop appropriate strategies to minimize the impact of them on the project.

4.5. Quantitative Risk Analysis and classification: Quantitative risk analysis is generally followed by qualitative risk analysis and aims to numerically analyze the probability of individual risks and its impact on the overall project objectives. In order to undertake quantitative risk evaluation Monte Carlo simulation model are employed (Fang & Marle, 2012). Quantitative aspects are equally important like that of the qualitative aspects of the risk mitigation plan. The project manager who is assigned to the project of the Rajiv Gandhi airport must consider the hazards and risks along with its possible aspects in terms of qualitative and quantitative aspects (Liu et al., 2013).

4.6. Discussion of their risks and their potential impacts vs. project plan: The project manager must discuss about the possible risks of the risk mitigation plan with the stakeholders and other senior management of the Rajiv Gandhi airport for proper implementation of it within stipulated time. The main objective of the plan is to save the airport and people from various hazards. The hazards are discussed in the risk assessment table.

Case project risk analysis

In order to successfully implement the project plan, it is important to undertake an extensive risk analysis of the complete project to identify possible risks. Moreover, it helps the project manager to develop appropriate strategy to minimize the risk impact and to achieve objectives of the project in efficient and effective manner. The steps involve in the project risk analysis is discussed as under –

5.1. Risk response plan for major risks: Risk response planning refers to the process of formulating alternatives and developing plan of action to enhance opportunities and minimize the threats present in the external environment. Besides, responsibility for the executing agreed risk response is also assigned in this process. There are three different types of risks that are identified by the authority of the airport. They are major risk, moderate risk and minor risk. However, the various types of risks are identified in the report for which risk mitigation plan is mitigated. The major risks can severely affect the project; therefore the appropriate risk response strategy can be avoidance or transference. The major risks that can arise for the airport project can be shortage of supply materials or increase in the cost of raw materials. Therefore, through avoidance risk response the supply of raw materials can be outsourced. Similarly, for the transference risk response strategy risk of possible increase of the raw materials can be transferred to third party through exclusive contract with suppliers. Moreover, the impact of major risks can be minimized through insurance of the key risk factors or functions (Brinkhoff et al., 2015). The plan is formulated to save Rajiv Gandhi airport and human kind.

5.2. Risk response plan for moderate: The plan will be effective if the mitigation plan will act first in case of major risks in the airport. After that, moderate risks come under the priority list. Risk assessment plan for the moderate risks should come next to the mitigation plan of the major risks. Once the appropriate strategies for the major risks are developed, the moderate risks identified become the priority. The moderate risks can also significantly affect the project execution and if left unattended can lead to project failure. Moderate risks can arise due to time, money, performance, and quality aspects of the project execution. In the project planning possible moderate can be accessed through focused group interviews and survey methods and appropriate risk response is developed at the same time, however some risks can arise during the project execution stage and need to be taken care of (McNeil et al., 2015). In this airport project, moderate risks can include lack of skilled labor force, late delivery of material or loss of key employees. Therefore, appropriate strategies to minimize the impact of such risk situations are to be developed. The possible risk mitigation strategy for such situations can be making contract agreements with more than one supplier of materials and labors. Moreover, to mitigate the risk of loss of key employees; it is advisable to keep a back up employees in key function areas that can affect the project implementation (Wang, 2013).

5.3. Risk response of minor risks: Minor risks are expected in all the projects as it cannot be completely avoided in a project and generally occur due to human error in planning stage of the project or may also arise as the project is executed. Minor risks are difficult to manage in large projects as there can be plenty of conditions that present minor risks. Therefore, it is important to focus on major and moderate risks, before planning to remove the minor risks.  However, management of the minor risks is not an area to be neglected in the mitigated plan. Sometimes the minor risks are the causes of major risks in the airport. The responsibility for mitigating the minor risk such as absenteeism of labor, misplacing of tools and equipment, delays in project runs can be assigned to the respective supervisors. The supervisors have vast knowledge and experience in their respective fields and therefore, they can take appropriate actions to mitigate the impact of minor risks on their own without involving the top management.   Therefore, management is required to be attentive of the minor risks and take appropriate actions to mitigate the risks as soon as it comes into notice (Serpella et al., 2014).

5.4. Continuous risk and uncertainty management: Risk assessment planning is a continuous process and project managers are required to undertake periodic risk assessments. As the project is carried out, it may be possible that the external environment presents a situation that has not been accounted for and that can seriously affect the project objectives. Therefore, risk managers or project managers in the Rajiv Gandhi Airport project take continuous risk and uncertainty management assessment to be prepared for any unfavorable risk situation. Besides, a project execution takes place in a dynamic environment where the key variables keep on changing, therefore, it is advisable to run the risk assessment planning after the completion of each milestone activity in order to make risk assessment plan more accurate and adaptive to changing requirements of the project. The plan should be formulated in a way so that continuous improvement is added when required. Risks and dangers can come in any point of time. It can come in aircrafts, airport operations, manual errors, etc. Rajiv Gandhi airport must assure the people associated with it for their safety. Further, continuous risk management is also necessary because it is nearly impossible to identify all possible risk factors and their respective risk response strategy in the project planning stage. Besides, the project plan is influenced or interdependent on the external environment factors over which the firm has no control; and the changes in the external environment presents both the opportunities and threats. Therefore, project mangers undertake continuous risk assessments to identify new risks and to assess the result of risk response undertaken for previous risks (Walker, 2015).  

5.5. Evaluation and final adjustment of risk response plan against business needs and requirements, objectives and business case: Uncertainty, complexities are to be solved in an immediate basis so that hazards can create less harm to humankind and other infrastructures of airport. Approaches and systems are to be upgraded so that the hazards cannot take their full form while harming the people present in the airport. As discussed, the risk assessment planning is a continuous process as risks can arise at any point during the project execution, especially for the large projects; therefore periodic assessments of the risks are made by the project managers. Further, based on the findings of the periodic risk assessment and profiling, risks are categorized into major, moderate and minor risks and appropriate risk response strategy is developed corresponding to the risk severity. The resources of the organization are also reallocated to the changing risk profile depending on the severity and urgency of the risk response. Moreover, the risk facilitator or the project managers are also required to constantly update the risk register when the previous identified risks are taken care of and also as the new threats are identified, in order to present an accurate description of the risk factors involved in the project (Taroun, 2014).

5.6. Format and presentation of the team report: The risk assessment objective is to help the risk facilitators or the project managers to comprehensively identify the risks and developing strategies to eliminate them. The project managers present their risk planning report to the management for their approval. Finally, the team report is presented to the senior management of the airport authority. Team report is necessary as it contains various types of feedbacks that are responsible for making any changes in the risk management plan of the company. The final plan of the airport should accomplish the goals and objectives of the organization as a whole along with the goals of the risk management plan. The report finding and the underlying risk planning strategy is discussed among the key decision maker and project stakeholders and some necessary modifications are made to the risk planning report that has been omitted to make it more effective for meeting project objectives (Cheng & Le Ping, 2016).

Hazard Risk Assessment Table

Risk Issue

Level of Risk

Mitigation Measures

Actions

Aircraft Crash

Reasonably practicable

Emergency Plans

Review and update Airport

emergency plans for parallel

runway operation.

Bird Strike

Reasonably practicable

Animal Hazard Strategy of RGIV

Review and update of bird management strategy.

Bird management strategy for construction activities.

Hazards owing to infrastructure

Reasonably practicable

Emergency Plans

Review and update Airport

emergency plans for parallel

runway operation.

General and operational hazards.

Broadly acceptable

Diligent implementation of the normal level of risk management principles expected of modern construction and industrial activities.

Environment Management Framework for the construction phase. Review and update RGIV emergency plans for parallel runway construction phase, including traffic access issues for emergency services.


Risk mitigation

Risk mitigation encompasses wide-ranging processes and ploys. Amongst various methods, SMS and SRM methods deserve special mention. The SRM model would enable the airport in consideration to anticipate and manage safety risks before any systems failure. It would also investigate ways of improving safety post incidents and accidents. Airports all across the globe have been practicing these techniques and Rajiv Gandhi International Airport is no exception. With SMS technology, the airport may transit from isolated safety measures to a holistic, systematic process wherein the entire airport would operate in a more effective and coordinated manner.

SRM Model

The success of the airport would hinge upon identification of potential hazards and also make decisions in promptness to negate the imminent threat. On the other hand, SRM includes monitoring of mitigation methods to explore their effectiveness thereby commencing future mitigation plans. It is important to note that SRM is embedded within an SMS. Even with the importance of SRM, its efficacy is not competent to improve safety performance on its own.

An effective SRM application operates in collaboration with important components of SMS namely; Safety Assurance, Safety Promotion, and Safety Policy. The different SMS components work in continuously. The factual reality is none of these are standalone constituents, and each element offers support and inputs to the others. Rajiv Gandhi International Airport may use SRM function to manage risks at the airport on a daily basis. For SRM to operate for the benefit of the airport in consideration the resources that are at the helm of flight operations, ground handling, emergency responses should be wary of conditions that may disrupt airport operations and the flow of cargo and people or for that matter asset required to promote air transportation (Jia et al., 2013). The risk mitigation actions arising from SRM processes may call for new equipment and tools, improved awareness and more training. The bottom-line remains barring safety promotions and commitment of the management of the airport neither SMS effectiveness nor SRM outcome is possible.

5M Model

On the other hand, to manage risks, the personnel designated at various departments of Rajiv Gandhi International Airport must decipher the system under review. The system entails over components, parts, functions, and resources interacting to produce the desired outcome. It may be a smaller part or subsystem of the airport like runaway lighting system, the system to move people through the terminal of Rajiv Gandhi International airport or a hazardous zone, for instance, and aircraft parking area. Rajiv Gandhi International Airport may use 5M model to describe the system (Liu et al., 2013).

The model breaks into five interacting components namely, Mission, Man (huMan aspect), Media, Management, and Machine. The airport management may mull over 5M Model which would result in the incorporation of all the elements in the system that is involved. However, issues may crop up during the application of SMS approach by the Rajiv Gandhi International airport authorities. In this case, the airport should take into consideration the worst case scenario like, bird strike which would have a severe effect on flight operations leading to emergency landing and other implications. In such cases, ARMS technology is an effective mechanism which provides guidance for correct analysis of the incident and undertakes appropriate actions to resolve such crisis.

PAVE risk assessment of Rajiv Gandhi International Airport

PAVE or PAVE risk assessment is a checklist which addresses pilot safety standards and not covers the entire airport. Since the given proposition is based on aviation PAVE technique assumes high importance in the same regard. Here, P stands for Pilot, A means Aircraft, V is deemed as Vironment or environment to be precise, E means external pressures. The P would signify the shape of the pilot and his fly worthiness. Questions like proficiency and legal facets of the pilot would be included in the checklist.

The Rajiv Gandhi International Airport authorities should ensure if the respective authorities are using right aircraft for the trip and whether the carriers are good enough to fly at 10,000 to 15,000 feet. The assessment entails over environment forecast. The management needs to weigh the speed of the aircraft against crosswinds. For instance, if the runaway is wet, and the flight is at night, what measures have been taken to ensure internal and exterior lighting before the departure. Lastly, E means external pressure (Cheng & Le Ping, 2016). The external pressures may exert huge influence to make the trip. The pilots should plan ahead and take fitting measures intended to negate the looming incident in the course of flight operation.

Conclusion

The above holistic risk analysis puts forth the diverse range of risks associated with Rajiv Gandhi International Airport as the case study. The discussion as mentioned earlier underscores types and magnitude of the risks and threats and offers prospective solutions to deal with the shortcomings in operation. Various risk assessment techniques like PAVE and others have been mentioned in the report which explicates the need for implementation of such models to negate any threat in Rajiv Gandhi International Airport. In fine, it may be said that going forward; the unit aims to expand its operations in keeping with risk mitigation methods and assume to be a force to reckon with.

Reference list

Aminbakhsh, S., Gunduz, M., & Sonmez, R. (2013). Safety risk assessment using analytic hierarchy process (AHP) during planning and budgeting of construction projects. Journal of safety research, 46, 99-105.

Brinkhoff, P., Norin, M., Norrman, J., Rosén, L., & Ek, K. (2015). Economic Project Risk Assessment in Remediation Projects Prior to Construction: Methodology Development and Case Study Application. Remediation Journal, 25(2), 117-138.

Cheng, M., & Le Ping, Y. (2016, April). Designed and developed a civil airport safety management system. In 2016 Annual IEEE Systems Conference (SysCon) (pp. 1-5). IEEE.

Fang, C., & Marle, F. (2012). A simulation-based risk network model for decision support in project risk management. Decision Support Systems,52(3), 635-644.

Gopalakrishnan, P., & Haleem, A. (2015). Handbook of materials management. PHI Learning Pvt. Ltd..

Halford, C. D. (2016). Implementing Safety Management Systems in Aviation. Routledge.

Jia, G., Ni, X., Chen, Z., Hong, B., Chen, Y., Yang, F., & Lin, C. (2013). Measuring the maturity of risk management in large-scale construction projects. Automation in Construction, 34, 56-66.

Karwowski, M. (2016). The risk in using financial reports in the study of airline business models. Journal of Air Transport Management, 55, 185-192.

Kendrick, T. (2015). Identifying and managing project risk: essential tools for failure-proofing your project. AMACOM Div American Mgmt Assn.

Liu, D., Reynolds, C., Vincenzi, D., & Doherty, S. (2013). Effect of pilot and air traffic control experiences and automation management strategies on unmanned aircraft systems mission task performance. Human Factors and Ergonomics in Manufacturing & Service Industries, 23(5), 424-435.

McNeil, A. J., Frey, R., & Embrechts, P. (2015). Quantitative risk management: Concepts, techniques and tools. Princeton university press.

Ruskin, K. J. (2013). Safety and Human Factors in the Operating Room. ASA Refresher Courses in Anesthesiology, 41(1), 103-108.

Serpella, A. F., Ferrada, X., Howard, R., & Rubio, L. (2014). Risk management in construction projects: a knowledge-based approach. Procedia-Social and Behavioral Sciences, 119, 653-662.

Taroun, A. (2014). Towards a better modelling and assessment of construction risk: Insights from a literature review. International Journal of Project Management, 32(1), 101-115.

Walker, A. (2015). Project management in construction. John Wiley & Sons.

Wang, Y. (2013). Construction Project Risk Assessment. In Proceedings of the Sixth International Conference on Management Science and Engineering Management (pp. 839-844). Springer London.

Wilke, S., Majumdar, A., & Ochieng, W. Y. (2014). Airport surface operations: A holistic framework for operations modeling and risk management. Safety Science, 63, 18-33.

Zhang, R., Peng, P., Xu, Z., Li, J., & Niu, S. (2013). A risk assessment modeling technique based on knowledge extraction and information diffusion with support specification. International Journal of General Systems, 42(8), 807-819.

 

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