Risk Quantification

Abstract

Human beings are familiar with the concept of risk or uncertainty since the beginning. The difference between risk and uncertainty is that the risk can be quantified. Poor risk assessment may lead to project failures or accidents, hence appropriate risk quantification is very important. However, to quantify the risk, once it has been identified, in order to remove or reduce it and take a decisive action is a big challenge. Risks are quantified by using likelihood or probability of an event to occur and its impact on the outcome or situation. Risks then can be categorized into acceptable or not acceptable risks and further actions are taken accordingly. This article discusses the importance of risk quantification and reviews the methods that are used in risk quantification process. Risk quantification applies into every field of life from medical, projects, construction, to safety. Applications of risk quantifications are discussed and limitations or new challenges are analyzed briefly in this article.