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The role of risk management is integral with the role of asset management. This work examines the integration of profit maximization techniques to not only maximize the value of the asset, which is asset management, but also to minimize the financial impact of losses when the asset is not available or degraded, which is risk management. Both techniques rely on the proper valuation of the cash flow based on the impact of the asset to the supply chain, the potential competitive threats, and the flexibility of the customer demand. Asset management relies on the strategic strengths of the company to leverage the investment of an asset into a profitable cash flow from customer demand. Thus, the corporate strategic strength defines and is dependent upon the value added capability of each asset. Thus, the value added of the asset is dependent upon the competitive edge offered by the company to gain quick market share when the asset is introduced. Correspondingly, the true downtime cost of the asset is required to seek risk management to cover the potential losses when the valued asset is not available or degraded in performance.
Power Engineering Society General Meeting, 2005. IEEE
Date of Conference: 12-16 June 2005