An introduction into risk, risk assessment, and risk management
Risk is defined as a set of triplets including event scenarios, their likelihood of occurring, and their consequences. These factors determine the risk profile and/or risk curve. The so-called risk assessment phase deals with the identification of initiating events towards the construction of the risk curves. A quantitative Probability Risk Assessment (PRA) methodology is often used. PRA can include well-known techniques like preliminary risk analysis, failure modes and effects analysis, criticality analysis, hazards and operability study, event tree analysis, and fault tree analysis. The so-called risk management phase deals with making trade-offs between alternatives influencing the risk scenarios and curves. Each alternative for actively or passively controlling the risk creates a specific risk curve. The curves are evaluated and decisions are made accordingly taking the cost of alternatives as trade-off. A risk-free alternative is often used as a reference point in evaluating alternatives.