Impact and Probability in Risk Assessment - Revision history

http://13.50.150.85/index.php?action=history&feed=atom&title=Impact_and_Probability_in_Risk_Assessment Impact and Probability in Risk Assessment - Revision history 2026-07-14T09:34:24Z Revision history for this page on the wiki MediaWiki 1.43.3 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=60181&oldid=prev Tkokotas at 14:57, 16 November 2018 2018-11-16T14:57:51Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 14:57, 16 November 2018</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l1">Line 1:</td> <td colspan="2" class="diff-lineno">Line 1:</td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">''Developed by Karlotta Thorhallsdóttir''</ins></div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Impact''' and '''probability''' are the two main components of [[Risk analysis]]. Looking at impact versus probability is common in order to categorize and prioritize risks as some risks may have a severe impact on projects objectives but only happen on rare occasions, while other have a moderate impact but occur more frequently. </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Impact''' and '''probability''' are the two main components of [[Risk analysis]]. Looking at impact versus probability is common in order to categorize and prioritize risks as some risks may have a severe impact on projects objectives but only happen on rare occasions, while other have a moderate impact but occur more frequently. </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l241">Line 241:</td> <td colspan="2" class="diff-lineno">Line 244:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div></references></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div></references></div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;">[[Category:Project Management]][[Category:Uncertaity]][[Category:Risk]][[Category:Risk Management]]</ins></div></td></tr> </table>

Tkokotas http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44185&oldid=prev S162285 at 07:35, 2 October 2017 2017-10-02T07:35:00Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 07:35, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l212">Line 212:</td> <td colspan="2" class="diff-lineno">Line 212:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Winch, G.M. (2010) ''Managing Construction Projects: An Information Processing Approach, Second Edition.'' Oxford: Wiley-Blackwell Publishing.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Winch, G.M. (2010) ''Managing Construction Projects: An Information Processing Approach, Second Edition.'' Oxford: Wiley-Blackwell Publishing.</div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>The book contains a description of the practice of managing risk and uncertainty in a construction project. It describes briefly the four activities of risk management process. The definitions of risk and uncertainty is described and the importance of risk management supported. Winch describes briefly the purpose of risk analysis and defines Probability and Impact matrix as the most commonly used tool for categorizing risks. The planned responses to risks that have been prioritized and categorized are also described within the same matrix as the probability and impact. <del style="font-weight: bold; text-decoration: none;"> </del></div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>The book contains a description of the practice of managing risk and uncertainty in a construction project. It describes briefly the four activities of risk management process. The definitions of risk and uncertainty is described and the importance of risk management supported. Winch describes briefly the purpose of risk analysis and defines Probability and Impact matrix as the most commonly used tool for categorizing risks. The planned responses to risks that have been prioritized and categorized are also described within the same matrix as the probability and impact. <ins style="font-weight: bold; text-decoration: none;"> </ins></div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"> </ins></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Curtis, P. & Carey, M. (2012). ''Risk Assessment in Practice.'' Deloitte & Touche LLP.'''</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Curtis, P. & Carey, M. (2012). ''Risk Assessment in Practice.'' Deloitte & Touche LLP.'''</div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Risk Assessment in Practice is a framework developed by five private sector organizations with the goal of thought leadership. It focuses on risk assessment process and criteria, impact and probability and the practice of qualitative and quantitative methods for the assessment, categorization and prioritization of risk. The limitations and advantages of the methods are also discussed. </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>Risk Assessment in Practice is a framework developed by five private sector organizations with the goal of thought leadership. It focuses on risk assessment process and criteria, impact and probability and the practice of qualitative and quantitative methods for the assessment, categorization and prioritization of risk. The limitations and advantages of the methods are also discussed. </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44162&oldid=prev S162285 at 06:54, 2 October 2017 2017-10-02T06:54:06Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 06:54, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l107">Line 107:</td> <td colspan="2" class="diff-lineno">Line 107:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><div class="center" style="width: auto; margin-left: auto; margin-right: auto;">Risk = Impact x Probability </div></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><div class="center" style="width: auto; margin-left: auto; margin-right: auto;">Risk = Impact x Probability </div></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>As the impact and probability can be described in both a relative and numerical manner so can the risk score. The higher the combined ratings are, the higher the score and thus the risk level. These ratings are generally defined from low to high or from very low to very high <ref name=" Curtis " />. The ratings for likelihood and impact are made using gathered opinions from interviews <ref name="Maylor"/>. These ratings <del style="font-weight: bold; text-decoration: none;"> </del>must be classified by each organization, specific for each activity. The organizations must define their risk tolerance. Creating these definitions of impact and probability levels can help reducing the influence of bias <ref name=" PMI " />. The result from these risk matrices are used to prioritize the risks, plan the risk response, identify risks for quantitative assessment and guide resource allocations <ref name="Cox" />. However, the objective effected by the risk must also be considered. E.g., a risk events which has high safety or health risk would be prioritized over a risk event which would have very high financial risk <ref name=" Curtis " />.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>As the impact and probability can be described in both a relative and numerical manner so can the risk score. The higher the combined ratings are, the higher the score and thus the risk level. These ratings are generally defined from low to high or from very low to very high <ref name=" Curtis " />. The ratings for likelihood and impact are made using gathered opinions from interviews <ref name="Maylor"/>. These ratings must be classified by each organization, specific for each activity. The organizations must define their risk tolerance. Creating these definitions of impact and probability levels can help reducing the influence of bias <ref name=" PMI " />. The result from these risk matrices are used to prioritize the risks, plan the risk response, identify risks for quantitative assessment and guide resource allocations <ref name="Cox" />. However, the objective effected by the risk must also be considered. E.g., a risk events which has high safety or health risk would be prioritized over a risk event which would have very high financial risk <ref name=" Curtis " />.</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>{| class="wikitable" style="margin-left: auto; margin-right: auto; border: none;"</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>{| class="wikitable" style="margin-left: auto; margin-right: auto; border: none;"</div></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44157&oldid=prev S162285 at 06:44, 2 October 2017 2017-10-02T06:44:53Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 06:44, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l95">Line 95:</td> <td colspan="2" class="diff-lineno">Line 95:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>== Qualitative Analysis==</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>== Qualitative Analysis==</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Qualitative methods for risk assessment are relatively rapid in practice, cost effective and easily understood <ref name=" Curtis " />. The results <del style="font-weight: bold; text-decoration: none;">form </del>the qualitative assessments are not an accurate estimate of risk. However, they provide a rather descriptive result and often with sufficient information for planning responses. The results from these assessments also set the foundation for more detailed quantitative analysis, if possible and warranted. It is performed regularly throughout a projects life cycle as new risks may emerge at later stages as well as a risk response may result in other risk events <ref name=" PMI " />. Classifying the risks enables organizations to reduce uncertainty levels and focus primarily on the high-risk events. There are two qualitative methods of assessing risk events in terms of impact and probability, both involving rating the impact and probability. These are ''Risk Probability and Impact Assessment'' and ''Probability and Impact matrix'' <ref name=" PMI " />.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Qualitative methods for risk assessment are relatively rapid in practice, cost effective and easily understood <ref name=" Curtis " />. The results <ins style="font-weight: bold; text-decoration: none;">from </ins>the qualitative assessments are not an accurate estimate of risk. However, they provide a rather descriptive result and often with sufficient information for planning responses. The results from these assessments also set the foundation for more detailed quantitative analysis, if possible and warranted. It is performed regularly throughout a projects life cycle as new risks may emerge at later stages as well as a risk response may result in other risk events <ref name=" PMI " />. Classifying the risks enables organizations to reduce uncertainty levels and focus primarily on the high-risk events. There are two qualitative methods of assessing risk events in terms of impact and probability, both involving rating the impact and probability. These are ''Risk Probability and Impact Assessment'' and ''Probability and Impact matrix'' <ref name=" PMI " />.</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44156&oldid=prev S162285 at 06:42, 2 October 2017 2017-10-02T06:42:59Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 06:42, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l235">Line 235:</td> <td colspan="2" class="diff-lineno">Line 235:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><ref name="Cox"> Cox, L. (2008). What's Wrong with Risk Matrices? Risk analysis: an official publication of the Society for Risk Analysis. 28(2), 497-512 </ref></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><ref name="Cox"> Cox, L. (2008). What's Wrong with Risk Matrices? Risk analysis: an official publication of the Society for Risk Analysis. 28(2), 497-512 </ref></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><ref name="SA"> Iloiu, M. & Csiminga, D. (2009). Project RISK Evaluation Methods - Sensitivity Analysis. Annals of the University of Petroşani, Economics, 9(2), 33-38 </ref></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div><ref name="SA"> Iloiu, M. & Csiminga, D. (2009). Project RISK Evaluation Methods - Sensitivity Analysis. Annals of the University of Petroşani, Economics, 9(2), 33-38 </ref></div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div><ref name="PIM"> Risk Management Capability Ltd. (2005). <del style="font-weight: bold; text-decoration: none;">Probabilit</del>- Impact Matrix (PIM). http://www.rmcapability.com/resources/Capability+Guidance+Sheet+-+Probability-Impact+Matrix.pdf </ref></div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ref name="PIM"> Risk Management Capability Ltd. (2005). <ins style="font-weight: bold; text-decoration: none;">Probability</ins>- Impact Matrix (PIM). http://www.rmcapability.com/resources/Capability+Guidance+Sheet+-+Probability-Impact+Matrix.pdf </ref></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div></references></div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div></references></div></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44149&oldid=prev S162285 at 06:35, 2 October 2017 2017-10-02T06:35:56Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 06:35, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l195">Line 195:</td> <td colspan="2" class="diff-lineno">Line 195:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Figure 2 shows an example of a ''Decision Tree Diagram'' being used for EMV analysis. For a power plant in need of renovation, two actions are possible; to build a new plant or to upgrade the current one. The uncertainty that needs to be considered is the magnitude of the power demand. Stronger demand yields higher benefits but both outcomes result in higher benefits for the new power plant individually. For each action, there are two outcomes that need to be considered. The total benefits/losses are the difference between the invested costs and the revenue. There is a 40% probability of weak power demand and a 60% probability of strong power demand. By multiplying the probability with outcome benefits, and summing them up, gives the Expected Monetary Value of the actions. The action which offers the highest benefit is then chosen. When using ''Decision Tree diagrams''; the tree is drawn from right to left, considering all possible outcomes from the available data; and then adding the appropriate numbers from left to right <ref name=" PMI" />. EMV analysis is highly dependent on accurate, risk-neutral assumptions. The outcome of the EMV is used to plan and prioritize possible risk responses.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Figure 2 shows an example of a ''Decision Tree Diagram'' being used for EMV analysis. For a power plant in need of renovation, two actions are possible; to build a new plant or to upgrade the current one. The uncertainty that needs to be considered is the magnitude of the power demand. Stronger demand yields higher benefits but both outcomes result in higher benefits for the new power plant individually. For each action, there are two outcomes<ins style="font-weight: bold; text-decoration: none;">, the uncertainties, </ins>that need to be considered. The total benefits/losses are the difference between the invested costs and the revenue. There is a 40% probability of weak power demand and a 60% probability of strong power demand. By multiplying the probability with outcome benefits, and summing them up, gives the Expected Monetary Value of the actions. The action which offers the highest benefit is then chosen. When using ''Decision Tree diagrams''; the tree is drawn from right to left, considering all possible outcomes from the available data; and then adding the appropriate numbers from left to right <ref name=" PMI" />. EMV analysis is highly dependent on accurate, risk-neutral assumptions. The outcome of the EMV is used to plan and prioritize possible risk responses.</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44147&oldid=prev S162285 at 06:34, 2 October 2017 2017-10-02T06:34:27Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 06:34, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l171">Line 171:</td> <td colspan="2" class="diff-lineno">Line 171:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>[[File:winch PIM.JPG|400px|thumb|right|Risk Impacts and Probability Matrix, <ref name=" Winch" />]]</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>[[File:winch PIM.JPG|400px|thumb|right|<ins style="font-weight: bold; text-decoration: none;">Figure 1: </ins>Risk Impacts and Probability Matrix, <ref name=" Winch" />]]</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Low impact – Low probability:''' The risks that are characterized as low, or very low, risks have both a low impact and likelihood of occurrence. For negative risks, threats, the response required is not necessarily as proactive management action. However, they should be included within the risk register for future monitoring. Positive risks, opportunities, within the low-risk category should be monitored or just simply accepted. Opportunity acceptance means taking advantage of the opportunity if it arises, but not actively pursuing it <ref name=" PMI " />.</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>'''Low impact – Low probability:''' The risks that are characterized as low, or very low, risks have both a low impact and likelihood of occurrence. For negative risks, threats, the response required is not necessarily as proactive management action. However, they should be included within the risk register for future monitoring. Positive risks, opportunities, within the low-risk category should be monitored or just simply accepted. Opportunity acceptance means taking advantage of the opportunity if it arises, but not actively pursuing it <ref name=" PMI " />.</div></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44145&oldid=prev S162285 at 06:33, 2 October 2017 2017-10-02T06:33:57Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 06:33, 2 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l151">Line 151:</td> <td colspan="2" class="diff-lineno">Line 151:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|-</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|-</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:110px; text-align:center; background:#F2F2F2; " |Impact</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:110px; text-align:center; background:#F2F2F2; " |Impact</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<del style="font-weight: bold; text-decoration: none;">70px</del>; text-align:center; background:#F2F2F2; " |Very Low / 0.05</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<ins style="font-weight: bold; text-decoration: none;">100px</ins>; text-align:center; background:#F2F2F2; " |Very Low / 0.05</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<del style="font-weight: bold; text-decoration: none;">60px</del>; text-align:center; background:#F2F2F2; " |Low / 0.1</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<ins style="font-weight: bold; text-decoration: none;">90px</ins>; text-align:center; background:#F2F2F2; " |Low / 0.1</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<del style="font-weight: bold; text-decoration: none;">60px</del>; text-align:center; background:#F2F2F2; " |Moderate / 0.2</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<ins style="font-weight: bold; text-decoration: none;">90px</ins>; text-align:center; background:#F2F2F2; " |Moderate / 0.2</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<del style="font-weight: bold; text-decoration: none;">60px</del>; text-align:center; background:#F2F2F2; " |High / 0.4</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<ins style="font-weight: bold; text-decoration: none;">90px</ins>; text-align:center; background:#F2F2F2; " |High / 0.4</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<del style="font-weight: bold; text-decoration: none;">70px</del>; text-align:center; background:#F2F2F2; " |Very High / 0.8 </div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>!style="height:20px; width:<ins style="font-weight: bold; text-decoration: none;">90px</ins>; text-align:center; background:#F2F2F2; " |Very High / 0.8 </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|-</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|-</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan= "6" style="height:10px; background: white; border color: white" | </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan= "6" style="height:10px; background: white; border color: white" | </div></td></tr> <tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l161">Line 161:</td> <td colspan="2" class="diff-lineno">Line 161:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan = "1" style="height:15px; text-align:center; background: red; " | High risk |</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan = "1" style="height:15px; text-align:center; background: red; " | High risk |</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan = "2" style="height:15px; text-align:center; " | Score > 0.14</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan = "2" style="height:15px; text-align:center; " | Score > 0.14</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>|rowspan = "3" colspan = "3" style="width:150px; text-align:left; " | A organization defines its risk thresholds, low, moderate and high. These thresholds <del style="font-weight: bold; text-decoration: none;">are </del>differ between projects. </div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>|rowspan = "3" colspan = "3" style="width:150px; text-align:left; " | A organization defines its risk thresholds, low, moderate and high. These thresholds <ins style="font-weight: bold; text-decoration: none;">can </ins>differ between projects. </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|-</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|-</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan = "1" style="height:15px; text-align:center; background: yellow; " | Moderate risk</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>|colspan = "1" style="height:15px; text-align:center; background: yellow; " | Moderate risk</div></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44016&oldid=prev S162285 at 20:51, 1 October 2017 2017-10-01T20:51:46Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 20:51, 1 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l205">Line 205:</td> <td colspan="2" class="diff-lineno">Line 205:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div> </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>= Limitations =</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>= Limitations =</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Qualitative methods are imprecise. They are just estimates and it can happen that unlikely <del style="font-weight: bold; text-decoration: none;">risk do happen </del>and likely <del style="font-weight: bold; text-decoration: none;">things </del>sometimes never come to pass. The quality of the information available influences the quality of the results <del style="font-weight: bold; text-decoration: none;">so </del>the information must be evaluated to help <del style="font-weight: bold; text-decoration: none;">determining </del>the risks importance <del style="font-weight: bold; text-decoration: none;">but it can also </del><ref name=" Curtis " />. When using the Probability and Impact Matrix, risk that are <del style="font-weight: bold; text-decoration: none;">quantitative </del>different can get the same rating and often the risks are overestimated. The results from the Probability and Impact Matrix are subjective and are thus open to more than one interpretation <ref name="Cox" />. The matrix doesn’t provide the possibility of assessing the overall project risks nor address <del style="font-weight: bold; text-decoration: none;">risk </del>interactions and correlations. Not all concepts of <del style="font-weight: bold; text-decoration: none;">risk of risk </del>can be mapped to a Probability and Impact Matrix, as the tool is designed around an event oriented risk concept. The practice often is impractical until a certain maturity level where some of the best opportunities for risk management may have passed <ref name="PIM" />. </div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Qualitative methods are imprecise. They are just estimates and it can happen that <ins style="font-weight: bold; text-decoration: none;">the </ins>unlikely <ins style="font-weight: bold; text-decoration: none;">risks occur </ins>and <ins style="font-weight: bold; text-decoration: none;">the </ins>likely <ins style="font-weight: bold; text-decoration: none;">risks </ins>sometimes never come to pass. The quality of the information available influences the quality of the results<ins style="font-weight: bold; text-decoration: none;">, therefore </ins>the information must be evaluated to help <ins style="font-weight: bold; text-decoration: none;">determine </ins>the risks importance <ref name=" Curtis " />. When using the <ins style="font-weight: bold; text-decoration: none;">''</ins>Probability and Impact Matrix<ins style="font-weight: bold; text-decoration: none;">''</ins>, risk that are <ins style="font-weight: bold; text-decoration: none;">quantitatively </ins>different can get the same rating<ins style="font-weight: bold; text-decoration: none;">, </ins>and often the risks are overestimated. The results from the <ins style="font-weight: bold; text-decoration: none;">''</ins>Probability and Impact Matrix<ins style="font-weight: bold; text-decoration: none;">'' </ins>are subjective and are thus open to more than one interpretation <ref name="Cox" />. The matrix doesn’t provide the possibility of assessing the overall project risks<ins style="font-weight: bold; text-decoration: none;">, </ins>nor <ins style="font-weight: bold; text-decoration: none;">does it </ins>address <ins style="font-weight: bold; text-decoration: none;">the risks </ins>interactions and correlations. Not all concepts of <ins style="font-weight: bold; text-decoration: none;">risks </ins>can be mapped to a <ins style="font-weight: bold; text-decoration: none;">''</ins>Probability and Impact Matrix<ins style="font-weight: bold; text-decoration: none;">''</ins>, as the tool is designed around an event oriented risk concept. The practice often is impractical until a certain maturity level<ins style="font-weight: bold; text-decoration: none;">, </ins>where some of the best opportunities for risk management may have passed <ref name="PIM" />. </div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Quantitative methods often provide more accurate results but are costly and time consuming. Using numbers may imply more precision in results than there is. The data and techniques used in these methods also need to be considered. If the models used are incorrect or don’t represent reality the result is meaningless. <del style="font-weight: bold; text-decoration: none;">Same with </del>the inputs. If the inputs are wrong the result from the analysis <del style="font-weight: bold; text-decoration: none;">is </del>useless. In risk analysis, this is a problem as assumptions are not always apparent <ref name=" Curtis " />. </div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Quantitative methods often provide more accurate results but are costly and time consuming. Using numbers may imply more precision in results than there is. The data and techniques used in these methods also need to be considered. If the models used are incorrect or don’t represent reality<ins style="font-weight: bold; text-decoration: none;">, </ins>the result is meaningless. <ins style="font-weight: bold; text-decoration: none;">The same applies to </ins>the inputs. If the inputs are wrong the result from the analysis <ins style="font-weight: bold; text-decoration: none;">are </ins>useless. In risk analysis, this is a problem as assumptions are not always apparent <ref name=" Curtis " />. </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div> </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> </table>

S162285 http://13.50.150.85/index.php?title=Impact_and_Probability_in_Risk_Assessment&diff=44015&oldid=prev S162285 at 20:43, 1 October 2017 2017-10-01T20:43:12Z

<p></p> <table style="background-color: #fff; color: #202122;" data-mw="interface"> <col class="diff-marker" /> <col class="diff-content" /> <col class="diff-marker" /> <col class="diff-content" /> <tr class="diff-title" lang="en-GB"> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">← Older revision</td> <td colspan="2" style="background-color: #fff; color: #202122; text-align: center;">Revision as of 20:43, 1 October 2017</td> </tr><tr><td colspan="2" class="diff-lineno" id="mw-diff-left-l195">Line 195:</td> <td colspan="2" class="diff-lineno">Line 195:</td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Figure 2 shows an example of a ''Decision Tree Diagram'' being used for EMV analysis. For a power plant in need of renovation, two actions are possible; to build a new plant or to upgrade the current one. The uncertainty that needs to be considered is the magnitude of the power demand. Stronger demand yields higher benefits but both outcomes result in higher benefits for the new power plant individually. For each action, there are two outcomes that need to be considered. The total benefits/losses <del style="font-weight: bold; text-decoration: none;">when considering </del>the <del style="font-weight: bold; text-decoration: none;">cost of </del>the <del style="font-weight: bold; text-decoration: none;">plant </del>and the <del style="font-weight: bold; text-decoration: none;">benefits from the power demand</del>. There is a 40% probability of weak power demand and a 60% probability of strong power demand. By multiplying the probability with outcome benefits, and summing them up, the <del style="font-weight: bold; text-decoration: none;">expected monetary value </del>of the actions <del style="font-weight: bold; text-decoration: none;">can be calculated</del>. The action which offers <del style="font-weight: bold; text-decoration: none;">higher benefits </del>is then chosen. When using Decision Tree diagrams; the tree is drawn from right to left, considering all possible outcomes from the available data; and then adding the appropriate numbers from left to right <ref name=" PMI" />. EMV analysis is highly dependent on accurate, risk-neutral <del style="font-weight: bold; text-decoration: none;">assumption</del>. The outcome of <del style="font-weight: bold; text-decoration: none;">teh </del>EMV is used to plan and prioritize possible risk responses.</div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Figure 2 shows an example of a ''Decision Tree Diagram'' being used for EMV analysis. For a power plant in need of renovation, two actions are possible; to build a new plant or to upgrade the current one. The uncertainty that needs to be considered is the magnitude of the power demand. Stronger demand yields higher benefits but both outcomes result in higher benefits for the new power plant individually. For each action, there are two outcomes that need to be considered. The total benefits/losses <ins style="font-weight: bold; text-decoration: none;">are </ins>the <ins style="font-weight: bold; text-decoration: none;">difference between </ins>the <ins style="font-weight: bold; text-decoration: none;">invested costs </ins>and the <ins style="font-weight: bold; text-decoration: none;">revenue</ins>. There is a 40% probability of weak power demand and a 60% probability of strong power demand. By multiplying the probability with outcome benefits, and summing them up, <ins style="font-weight: bold; text-decoration: none;">gives </ins>the <ins style="font-weight: bold; text-decoration: none;">Expected Monetary Value </ins>of the actions. The action which offers <ins style="font-weight: bold; text-decoration: none;">the highest benefit </ins>is then chosen. When using <ins style="font-weight: bold; text-decoration: none;">''</ins>Decision Tree diagrams<ins style="font-weight: bold; text-decoration: none;">''</ins>; the tree is drawn from right to left, considering all possible outcomes from the available data; and then adding the appropriate numbers from left to right <ref name=" PMI" />. EMV analysis is highly dependent on accurate, risk-neutral <ins style="font-weight: bold; text-decoration: none;">assumptions</ins>. The outcome of <ins style="font-weight: bold; text-decoration: none;">the </ins>EMV is used to plan and prioritize possible risk responses.</div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>[[File: MCS.JPG|300px|thumb|right|Figure 3: The respective probability of achieving specific cost targets, <ref name=" PMI" /> (click for a clearer picture)]]</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>[[File: MCS.JPG|300px|thumb|right|Figure 3: The respective probability of achieving specific cost targets, <ref name=" PMI" /> (click for a clearer picture)]]</div></td></tr> <tr><td colspan="2" class="diff-side-deleted"></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div><ins style="font-weight: bold; text-decoration: none;"></ins></div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>=== Monte Carlo Simulation ===</div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div>=== Monte Carlo Simulation ===</div></td></tr> <tr><td class="diff-marker" data-marker="−"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #ffe49c; vertical-align: top; white-space: pre-wrap;"><div>Monte Carlo Simulations<del style="font-weight: bold; text-decoration: none;">, </del>MCS<del style="font-weight: bold; text-decoration: none;">, </del>are typically used for project simulations to quantify risks <ref name=" PMI" />. These random simulations can be considered “experiments” and give insight into the likelihood of each outcome, impact <ref name="NRC" />. In risk management, the inputs into the simulation are estimates of project objectives<del style="font-weight: bold; text-decoration: none;">, </del>e.g. cost of the project or schedule duration <ref name="Maylor"/>. A probability distribution is created for these variables and a project model iterated many times with randomly chosen inputs using random number generators. The model outputs are the probability of each outcome due to the specific uncertainties. These outputs can then be used to plan the response. When performing MCS there are some things that need to be considered for the validity of the outcomes. Variables may not be independent, number of iterations may not be sufficient as more iterations are costlier and time consuming. Figure 3 shows the outcome of a MCS analyzing the cost estimation of a project. There is only a 12% probability of meeting the budget of $41M. If an organization wants 75% probability of success, the budget would need to be $50M. </div></td><td class="diff-marker" data-marker="+"></td><td style="color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #a3d3ff; vertical-align: top; white-space: pre-wrap;"><div>Monte Carlo Simulations <ins style="font-weight: bold; text-decoration: none;">(</ins>MCS<ins style="font-weight: bold; text-decoration: none;">) </ins>are typically used for project simulations to quantify risks <ref name=" PMI" />. These random simulations can be considered <ins style="font-weight: bold; text-decoration: none;">as </ins>“experiments” and give insight into the likelihood of each outcome, <ins style="font-weight: bold; text-decoration: none;">the </ins>impact <ref name="NRC" />. In risk management, the inputs into the simulation are estimates of project objectives<ins style="font-weight: bold; text-decoration: none;">; </ins>e.g. cost of the project or schedule duration <ref name="Maylor"/>. A probability distribution is created for these variables<ins style="font-weight: bold; text-decoration: none;">, </ins>and a project model iterated many times with randomly chosen inputs using random number generators. The model outputs are the probability of each outcome due to the specific uncertainties. These outputs can then be used to plan the response. When performing MCS there are some things that need to be considered for the validity of the outcomes. Variables may not be independent, number of iterations may not be sufficient as more iterations are costlier and time consuming. Figure 3 shows the outcome of a MCS<ins style="font-weight: bold; text-decoration: none;">, </ins>analyzing the cost estimation of a project. There is only a 12% probability of meeting the budget of $41M. If an organization wants 75% probability of success, the budget would need to be $50M. </div></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><br></td></tr> <tr><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div> </div></td><td class="diff-marker"></td><td style="background-color: #f8f9fa; color: #202122; font-size: 88%; border-style: solid; border-width: 1px 1px 1px 4px; border-radius: 0.33em; border-color: #eaecf0; vertical-align: top; white-space: pre-wrap;"><div> </div></td></tr> </table>

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