Profitability Analysis for Assessing the Optimal Seismic Retrofit Strategy of Industrial Productive Processes with Business-Interruption Consequences
Publication: Journal of Structural Engineering
Volume 144, Issue 2
Abstract
Seismic damage affecting industrial-process components can cause severe disruption, leading to not-negligible profit reduction associated with business interruption. Hence, the implementation of a proper seismic risk mitigation strategy is often required, accounting for financial issues as well. This study presents a novel probabilistic seismic risk assessment framework able to quantify business-interruption losses on the basis of a company’s balance-sheet data. The framework contains a financial module that uses a profitability index (PI) for identifying the most profitable seismic retrofit strategy to be implemented, given a reference time window and available budget. Application of the framework to a typical Italian cheese factory is also illustrated. Results show how business-interruption losses are comparable with direct costs for the rehabilitation of seismically damaged components. Additionally, it is demonstrated that PI can be considered a suitable financial indicator, and evaluating the contemporary benefit has a primary importance when a retrofit strategy is applied to more components.
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Published In
Journal of Structural Engineering
Volume 144 • Issue 2 • February 2018
Copyright
©2017 American Society of Civil Engineers.
History
Received: Jan 18, 2017
Accepted: Jul 14, 2017
Published online: Dec 4, 2017
Published in print: Feb 1, 2018
Discussion open until: May 4, 2018
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