Question 4 (12 x marks)

Sinking Oceanos

Risk-based decisions are dependent on accurate risk information. Key risk indicators are used in operational risk management to generate risk information. With reference to the case study, the height of the swells can be regarded as risk information that the captain could have used to decide whether the ship should leave the harbour or not. Explain the concept of a leading or predictive indicator and provide a graph using the information in table 1 to illustrate the height of the swells on 3 August 1991. Clearly indicate the threshold and state whether you agree with the captains decision to set sail at 17:00.