5. LP-Analysis of Risk and Efficiency in Systems

We are tied to the chariot of complexity and have lost all abilities to see the obvious.

Thomas J. Peters

We describe logic and probabilistic (LP) analysis of risk and efficiency in classes: LP-modeling, LP-classification, LP-efficiency and LP-forecasting. LP-risk models make the analysis of risk and efficiency in systems by simple and correct methods. This is their advantage compared to scoring models, neural networks models, etc.

In risk analysis a special place is occupied of ideas of LP-calculation concerning the determination of Boolean differences, weights and contributions of initiating events. The technique is analogously to the calculation of derivatives for functions in mathematical analysis. Significations and contributions of initiating events are easily calculated by algorithmically, using P-risk function and software. The differences in the risk of the final event are determined by excluding the event-parameter from the P-risk functions, as well as frequency and probabilistic contributions of event-gradations for the interval of the efficiency parameter distribution. In practical applications this is usually the left or the right tail of the efficiency parameter distribution. Such analysis ensures the transparency of results and offers big opportunities for managing and forecasting risk by statistical data in the space of system states. LP-analysis of system risks is demonstrated in various applications: credit risk, restaurant business, risk of bribery and corruption, successful development of Russia, etc.