Properties and applications in risk frequency reduction operations of an integral part model

The contribution of stochastic models to the development of risk management as an organizational discipline has been proved to be very important. Risk management literature in the past appears to have concentrated on developing stochastic models for measurement of risk. Recently, the risk management community has responded actively and creatively to the risks that result from scientific research and engineering inventions, notably the risks of space exploration and of computers. Empirical studies, concerning the risk management practices of modern complex organizations, have shown that risk managers have begun to treat these risks by making risk frequency reduction operations the most important part of their organizationsʹ risk control programs. The results of these studies have made it quite clear that stochastic modelling of risk frequency reduction operations is of great importance in assessing, selecting, and applying such operations. The main purpose of the present paper is to establish properties, and extends the applicability in risk frequency reduction operations of a stochastic integral part model, based on the product of a discrete random variable with a continuous uniformly distributed random variable.