Title: Scorecard models for operations management
Author: Paolo Giudici
Address: Department of Economics and Management, University of Pavia, Via San Felice 5, Pavia 27100, Italy
Abstract: In this paper, we propose two effective methods to prioritise controls on operations management on the basis of their operational risk. The methods are based on the combination of a sound statistical methodology and an easy to communicate scorecard reporting format. The first method summarises the content of operational self-assessment questionnaires using the idea of a 'Gini rating', thereby producing a simple read ordering of operations performance. The second method introduces a simple non-parametric Bayesian model, able to integrate questionnaire data with observed loss data, thereby producing a combined measure of risk, on which to base capital coverage.
Keywords: Bayesian models; Gini rating; operational risk; scorecard models; integrated scorecard models; operations management; self-assessment questionnaires; modelling; loss data; risk measures; capital coverage; operational risk indicators; risk management.
Int. J. of Data Science, 2015 Vol.1, No.1, pp.96 - 101
Available online: 19 Apr 2015