Logic Engineering & Real Options Analysis

Logic Engineering covers all aspects of Probabilistic Operational Risk Assessment from Process Mapping, Risk Identification and Quantification and Risk Mitigation through to Post Loss Event Analysis. Logic Engineering delivers significant results through the use of ALARP (As Low As Reasonably Practicable concept) and Real Options Analysis. Our service is based on tried and tested methods used in mission critical industries over the past 30 years and is used to provide Risk Assessments within the power generation, transportation and oil & gas industries where success is measured in lives saved rather than costs.

• ALARP - As Low As Reasonably Practicable. A concept for assessing necessary risk control measures taking into account the practicalities and costs of the task in hand.

• Real Options - If we begin down the path from point A what options will open for us and what will we gain by having those options?

• Investment Governance - Ungoverned investment in internal processes and their associated supporting functions lead to financial haemorrhage.

• Probabilistic Risk Assessment - A systematic approach for transforming failures into risk profiles and providing the resultant probabilities for each risk.

When it comes to decision making, Real Options Analysis is the single most important tool available by focusing on the temporal aspects of risk and attempting to accurately capture the potential for future value in the decisions made today. Real Options Analysis is based on Black Scholes financial options theory: "If we begin down the path from point A, what options will open for us and what will we gain by having those options?"

• The 'real' power behind Real Options Analysis is the journey taken to identify the options in the first place:

  • An option is the opportunity to make a decision after you see how events unfold

  • Option valuations are aligned with financial market valuations

  • Option thinking can be used to design and manage strategic investments proactively

  • Reduces the significance of the estimated contingencies factored in to the project

     

• Capital investment decisions are made following:  

  • A disciplined thought process

  • A traceable process

  • Analysis of uncertainties inherent in the decision

  • Understanding and value of managerial flexibility.