ABSTRACT
The design of operational risk optimization systems in terms of optimizing the levels of risks in operations and the resources that should be allocated to manage these risks is presented in this chapter. Different optimization techniques and methodologies that can be implemented for designing an effective and optimal operational risk management system are introduced. These are categorized as derivative-based and derivative-free optimization methods. In this chapter, both methodological approaches are discussed to show their applicability in optimizing the levels of operational risks. Their advantages and disadvantages are highlighted, combined with the main aspects that should be considered during their implementation process. The construction and use of the resulting optimum matrix that includes optimal values of operational risks is also presented. The definition of how to optimize the allocation of resources needed to manage optimally the operational risks is also highlighted. Finally, the importance and use of unconstrained and constrained optimization analysis as well as
the role of significance and exposure values are also discussed. Figure 8.1 illustrates the main elements of Chapter 8.
