Risk analysis is the process of combining event impacts and likelihoods in order to assess risk levels on vulnerable resources. These could be people, plant or the environment. Both qualitative and quantitative methods can be used in order to represent and assess risk.
Qualitative risk analysis
Qualitative risk representation can be done using a risk matrix approach where impact and frequency are given in terms of pre-specified levels. Hazardous events can be located on the risk matrix and ranked according to their risk level. Action can then be taken on those events which constitute the greatest risk. These are located in the upper corner of the matrix. Regions on the matrix can be defined which separate negligible risk from high risk. An intermediate region represents opportunities to reduce risk to as low as reasonably practicable (ALARP).
Quantitative risk analysis
Quantitative risk analysis requires significantly more effort than qualitative approaches and is only justified when there exists adequate data to carry out the study. The risk levels can be represented in various ways including iso-risk contours on land-use planning maps or via F-N (Frequency-Number) curves. Quantitative analysis is useful for considering alternative process designs and assessing land use planning issues.