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Risk management - Common methods of assessing risk

Common methods of assessing risk

We have already seen that there are particular techniques that may help to identify and put a ‘value’ on the impact of a particular risk.


For example:

  • Brain storm
  • Interview
  • Checklists etc.

The sections below look in a little more detail at some of these techniques.

Issue based

Looks at technical, commercial and managerial aspects and how their risks may impact on the plan.
This could include a simple checklist to complete.

Checklist

Checklists in general suffer from drawbacks (see Checklists).

Qualitative

Different systems exist like scoring and ranking or the use of HIGH / LOW / MEDIUM assessments of impacts.
Scoring requires a degree of subjectivity. As the name suggests, points are awarded according to the perceived degree of risk involved.
The points are then totalled and an overall assessment of the risk established.

Quantitative

We have already seen many techniques for assessing the impact of two activities with a range of values.
Other sections [see Monte Carlo simulation] will look at more detail in the combining of these risks.

See next for method comparison [see Common methods of assessing risk 2].