Cumulative Impact of Inhomogeneous Channels on Risk
Ling Wang, Pramode Verma, Sudarshan Dhall, S. Laksmivarahan
This paper considers flows of containerized traffic in a cascade
of channels with diverse risk characteristics. Each channel is
characterized by a probability distribution function relating the
probability of loss being less than a given value to the
magnitude of the loss. The cumulative impact of cascading
channels is then evaluated as a closed form solution in terms of
the characteristics of the constituent channels with dissimilar
risk characteristics. The results presented in this analysis can be
used to shape the risk characteristics of individual channels
through, for example, additional investment in order to
maximize the impact of such investments. Full Text
|