Explanation
Risk assessment consists of an objective evaluation of risk in which assumptions and uncertainties are clearly considered and presented. Part of the difficulty in risk management is that measurement of both of the quantities in which risk assessment is concerned - potential loss and probability of occurrence - can be very difficult to measure. The chance of error in measuring these two concepts is large. Risk with a large potential loss and a low probability of occurring is often treated differently from one with a low potential loss and a high likelihood of occurring. In theory, both are of nearly equal priority, but in practice it can be very difficult to manage when faced with the scarcity of resources, especially time, in which to conduct the risk management process. Expressed mathematically,
Financial decisions, such as insurance, express loss in terms of dollar amounts. When risk assessment is used for public health or environmental decisions, loss can be quantified in a common metric such as a country's currency or some numerical measure of a location's quality of life. For public health and environmental decisions, loss is simply a verbal description of the outcome, such as increased cancer incidence or incidence of birth defects. In that case, the "risk" is expressed as
If the risk estimate takes into account information on the number of individuals exposed, it is termed a "population risk" and is in units of expected increased cases per a time period. If the risk estimate does not take into account the number of individuals exposed, it is termed an "individual risk" and is in units of incidence rate per a time period. Population risks are of more use for cost/benefit analysis; individual risks are of more use for evaluating whether risks to individuals are "acceptable"....
Read more about this topic: Risk Assessment
Famous quotes containing the word explanation:
“We live between two worlds; we soar in the atmosphere; we creep upon the soil; we have the aspirations of creators and the propensities of quadrupeds. There can be but one explanation of this fact. We are passing from the animal into a higher form, and the drama of this planet is in its second act.”
—W. Winwood Reade (1838–1875)
“The explanation of the propensity of the English people to portrait painting is to be found in their relish for a Fact. Let a man do the grandest things, fight the greatest battles, or be distinguished by the most brilliant personal heroism, yet the English people would prefer his portrait to a painting of the great deed. The likeness they can judge of; his existence is a Fact. But the truth of the picture of his deeds they cannot judge of, for they have no imagination.”
—Benjamin Haydon (1786–1846)
“Natural selection, the blind, unconscious, automatic process which Darwin discovered, and which we now know is the explanation for the existence and apparently purposeful form of all life, has no purpose in mind. It has no mind and no mind’s eye. It does not plan for the future. It has no vision, no foresight, no sight at all. If it can be said to play the role of the watchmaker in nature, it is the blind watchmaker.”
—Richard Dawkins (b. 1941)