Optimizing maritime security decisions : integrating regret theory, expected value, and Bayesian probability for risk assessment

Abstract

PURPOSE: Maritime freight transport operates in a multidimensional environment characterized by risks and/or threats that affect the entire supply chain, but also all components that make up the shipping industry (ports, floating platforms, etc.). For these reasons, optimization in decision-making in the process of implementing strategic and operational procedures for maritime security, is imperative to achieve high standards of it. The paper aims to approach this issue by applying quantitative methods of decision analysis, tools that can provide added value in the production/provision of maritime safety services.

DESIGN/METHODOLOGY/APPROACH: The quantitative methods used under conditions of risk and uncertainty refer to: a) the theory of Regret Theory, which essentially highlights the opportunity cost in choosing a decision under conditions of threats and risks faced by international maritime transportation , b) the Expected Value Theory and c) using Bayes' theorem, a revision of the initial probabilities to a posteriori probabilities is made regarding the occurrence of maritime risks and threats.

FINDINGS: The analysis on the one hand highlights the best decision chosen to deal with threats and risks such as piracy at sea, terrorist attack, armed robbery and crew kidnapping and on the other hand highlights the value of perfect information in order for decision-makers to subsequently develop the appropriate strategy for dealing with risks and or threats affecting maritime security, so that then, at operational and tactical level, the best possible results can be obtained.

PRACTICAL IMPLEMENTATION: This work contributes to the international scientific literature in the application of quantitative methods in decision making, in the formulation of strategies and implementation of operations ensuring safe maritime transport conditions.

ORIGINALITY/VALUE: This work is an original approach to decision-making in the process of strategic and operational tactics by competent bodies in order to achieve the best possible results in dealing with threats and risks at sea, with given resources and other constraints.