This 3-step process remains the foundation of qualitative risk analysis today, although we now have formalised methods and guide-lines to help us establish the severity of these risks, which would typically be done using a Probability/Impact ranking matrix. Meaning the management of risk focussed only on identifying threats (or opportunities), subjectively establishing the likelihood of risk event occurrence and identifying the potential impacts of the risk. At that stage, however, risk management techniques were all still largely qualitative. Risk management (in it’s very loosest form) can be traced back to the beginning of human origins, but it was only towards the end of the 19 th century, when high-rise buildings, complex railway infrastructures, large dams and canals started being built, that formalised project risk management techniques became more widespread in helping determine the outcome of a project. Qualitative Risk Analysis, on the other hand, applies a subjective assessment of risk occurrence likelihood (probability) against the potential severity of the risk outcomes (impact) to determine the overall severity of a risk. In a nutshell, Quantitative Risk Analysis uses available relevant and verifiable data to produce a numerical value which is then used to predict the probability (and hence, acceptability) of a risk event outcome.
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