Qualitative Risk Analysis
This type of risk analysis is perhaps the most widely used one, just because it is simple and quick to perform. In this type, the potential loss is qualitatively estimated using linguistic scales such as low, medium, and high. In this type of analysis, a matrix is formed which characterizes risk in form of the frequency (or likelihood) of the loss versus potential magnitudes (amount) of the loss in qualitative scales. The matrix is then used to make policy and risk management decisions. Because this type of analysis does not need to rely on actual data and probabilistic treatment of such data, the analysis is far simpler and easier to use and understand, but is extremely subjective. Qualitative risk analysis is the method of choice for very simple systems such as a single product safety, simple physical security, and straightforward processes.
Contributor: Sima Rastayesh (ESR11)