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The two elements of risk-informed budgeting
Industry guidelines view risk as a function of both the consequence and likelihood of asset failure. Authority employees identified components of failure, assigned weights to each, and then, using a 10-point scale, categorized how the contribution to failure should be scored for each asset or asset group. Though they consider physical condition the most important factor in determining the probability of an asset failing, their framework takes performance and repair history into account as well.
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Asset inventory profile
Data collected on almost 2,000 assets — everything from pumps to HVAC equipment — reveals the overall condition n of the authority authority's s assets.
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Determining the overall risk score
The authority's key asset groups are ranked in order of descending risk.
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Cumulative construction costs of addressing risk
Graphs and tables helped managers schedule projects with risk reduction in mind. The “Risk rank” chart below orders projects starting with the highest risk score.