Risk Analysis and Qualification: Tools and Techniques
Added on -2019-09-16
This article explains the concept of risk analysis and its two primary components: risk probability and impact. It also discusses the two ways of conducting risk analysis: qualitative and quantitative. The article focuses on qualitative risk analysis and its inputs, outputs, and tools and techniques. It also describes the risk matrix and its components. The article concludes by emphasizing the direct correlation between probability, impact, and risk.
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2Risk is defined as any untoward occurrence which has negative results in the process and hasnegative impact on overall functioning of an organization. Risk Analysis is assessment of risks and prioritizing the risks through set of tools and techniquesin order to assess the damage to be done due to particular Risk. Risks has two Primary components, These are, 1. Risk Probability or in other terms Probability of occurrence of any riskAnd the other component is 2. Impact of particular risk.Risk Analysis is part of overall Risk Management Process. The Figure below is highlight of complete Risk Management Process. Figure 1
3As mentioned in figure 1, Risk Analysis is to find out answers for, what are the likelihood andconsequences of the risk?Risk Analysis is done in two ways, 1.Qualitative Risk Analysis, &2.Quantitative Risk AnalysisQualitative Risk Analysis is defined as analyzing the risk qualitatively. In other wordsdetailed description analysis of risk is carried out in Qualitative Risk Analysis. QualitativeRisk analysis doesn’t counts the numerical values of probability or impact values; it dependson describing the probability and impact of the risks (Bansal, S., 2014). Qualitative Risk Analysis inputs are Risk register, Risk Management Plan, Scope Baseline &historical evidences helpful to find out accurate analysis reports. Qualitative Risk Analysis outputs are Probability matrix description, Impact scoresdescription and conclusion or comment section (Stackpole, C.S., 2017). Relationship between Risk Analysis, Probability and Impact (Consequences) is, Risk = f (probability, consequences)
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