Risk Analysis
Definition of terms
-
Risk:
-
Risk is the exposure to the possibility of financial loss,
physical damage, personnel injury, or project delay as a consequence
of uncertainties associated with following a particular course
of action. The level of risk is a function of the chance of
an event occurring and the severity of the likely consequences.
Management of risk relies on the ability to reduce either:
- the
probability of the event occurring,
or
- the
severity of the consequences.
- Hazards:
Hazards are, threats, unwanted events, unforeseen conditions,
or other failure modes which might occur during the project including
the following:
- accidents to personnel fires and explosions
- accidents to equipment
- serious equipment failure
- unforeseen geological conditions
- adverse operating conditions
- inadequate operating procedures
- inadequate equipment or plant
- significant design inadequacies
- Consequences:
Consequences considered will vary depending upon the type of
project and the scope of the analysis. Examples of project consequences
include:
- Safety - serious injuries, non-serious injuries and total
hours lost due to accidents
- Environmental - additional environmental impacts
- Schedule - project completion delay due to extension of
critical path activities
- Cost - additional project costs.
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