Explain Risk Assessment

The objective of risk assessment is to rank the risks in terms of their damage causing potential. For risk assessment, first each risk should be rated in two ways:

• The likelihood of a risk coming true (denoted as r).

• The consequence of the problems associated with that risk (denoted as s).

Based on these two factors, the priority of each risk can be computed: p = r * s Where, p is the priority with which the risk must be handled, r is the probability of the risk becoming true, and s is the severity of damage caused due to the risk becoming true. If all identified risks are prioritized, then the most likely and damaging risks can be handled first and more comprehensive risk abatement procedures can be designed for these risks.

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