Explanation:
Risk valuation: It is called analytical calculation and simulation process by showing the probability of realization of the identified hazards and the determination of the loss to occur in case of occurrence through various tools.
Risk appraisal: primarily worker; people, equipment, materials should be done in order to protect and to prevent loss of time as a result of any event that may occur.
To put hazards in order, it is necessary to value each risk in terms of probability, severity, and conditions of occurrence relative to other risks. What needs to be done while valuing the risks is to put the risks in priority. The Nuclear, Aerospace, Petroleum, Railway and Military industries have a long history of risk valuation. Risk valuation methods used among industries may differ. Issues such as financial, environmental, ecological and public health can be effective in making this decision. After all assumptions and uncertainties are clearly revealed and accepted, risk assessment is made with an objective assessment. The problem with risk valuation, which is part of the risk management cycle, is the difficulty in measuring the magnitude of the potential loss and the probability of the loss. In theory, both are equally important, but risk management can be very difficult to manage, especially when it comes to time and resource scarcity.
Risk analysis: These are all the methods and principles regarding the identification of potential hazards that may occur during the activities of an enterprise, evaluating the risks related to them and thus taking control measures related to the expected and possible risks.
We can analyze the risk under the following five headings:
- Identify threats.
-Decide which of the identified hazards can cause harm.
- Evaluate the risks and determine the measures to be taken.
-Save your important findings.
-Report your risk analysis and update if necessary.
Qualitative and quantitative methods are available for risk analysis.
1) Qualitative Risk Analysis Methods:
-Primary Risk Analysis Method and Risk Matrices (Preliminary Risk Analysis and Risk Matrices)
-Hazard and Operability Studies (HAZOP: Hazard and Operability Studies)
-Error Mode and Effects Analysis (FMEA: Failure Mode and Effect Analysis)
2) Quantitative Risk Analysis Methods:
a) Tree Based Techniques (Static Analysis):
-Fault Tree Analysis
-Event Tree Analysis
-Cause-Consequence Analysis
-Management Supervision Risk Analysis (MORT: The Management Oversight and Risk Tree)
b) Techniques for Dynamic Systems:
-Diagraph / Fault Graph
-Markov Models (Markov Modeling)
-Monte-Carlo Simulation
-Dynamic Event Logic Analythical Methodology
-Dynamic Event Tree Analysis Method
