TWO-STAGE DECISION APPROACH TO MATERIAL ACCOUNTING

The validity of the alarm threshold 4a has been checked for hypothetical large and small facilities using a two-stage decision model in which the diverter's strategic variable is the quantity diverted, and the defender's strategic variables are the alarm threshold and the effectiveness of the physical security and material control systems in the possible presence of a diverter. For large facilities, the material accounting system inherently appears not to be a particularly useful system for the deterrence of diversions, and essentially no improvement can be made by lowering the alarm threshold below 4o. For small facilities, reduction of the threshold to 2o~ or 3o is a cost effective change for the accounting system, but is probably less cost effective than making improvements in the material control and physical security systems.