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RESEARCH PRODUCT

Risk Assessment and Analysis

subject

description

Once threats are identified, they must be assessed or evaluated, which is the objective of this chapter. There is usually a large number of threats, making it impossible or unprofitable to analyze them all, meaning selection of the threats that will be addressed is important. It is a decision-making process; an example is proposed and solved by one of the many techniques available. The chapter proposes a very standard requested study, which is the assessment of the economic and financial risks of a project. This is done through a real-life-example, followed by another appraisal, this time devoted to economic issues, as well as another for transportation, introducing the important concept of conditional probability. The chapter moves on to the assessment of risk associated with costs related to Labor, Materials and Equipment. A still more realistic approach contemplates the simultaneous analysis of all risk costs in a project, introducing the reliability of estimates concept through the use of entropy. It also explores the notion of Probabilistic Risk Assessment together with Tree Analysis and Fault Tree Analysis, which are tools designed for situations that are more complex. Finally, Failure Mode and Effects Analysis are also examined, together with more advanced concepts, such as Correlation Risks and Qualitative and Quantitative assessments. The chapter finishes with the development of the best strategy regarding remediation costs.