Primer on risk analysis

In every decision context there are things we know and things we do not know. Risk analysis uses science and the best available evidence to assess what we know--and it is intentional in the way it addresses the importance of the things we don--t know. Primer on Risk Analysis: Decision Making Under Uncertainty lays out the tasks of risk analysis in a straightforward, conceptual manner that is consistent with the risk models of all communities of practice.

This primer tackles the question, "what is risk analysis?" Distilling the common principles of the many risk tribes and dialects into serviceable definitions and narratives, it provides a foundation for the practice of risk analysis and decision making under uncertainty for professionals from all walks of life. Readers learn the language, models, and concepts of risk analysis and its three component tasks--risk management, assessment, and communication. Making a distinction between knowledge uncertainty and natural variability, the book also introduces a down-to-earth approach to decision making under uncertainty. Extensive examples illustrate the applicability of the risk analysis principles.

The book--s simple and straightforward style--based on the author--s decades of experience as a risk analyst, trainer, and educator--strips away the mysterious aura that often accompanies risk analysis. It describes the principles of risk analysis in a manner that enables readers to better understand and use the models and practice of their individual fields, and to gain access to the rich and sophisticated professional literature on risk analysis.

A companion volume, Principles of Risk Analysis: Decision Making Under Uncertainty, supplies the tools, techniques, and methodologies to help readers apply the principles of risk analysis--the "how to."

Additional exercises, as well as a free student version of the Palisade Corporation DecisionTools^® Suite software and files used in the preparation of this book are available for download.

The Basics
What is risk?
What Is Risk Analysis?
Why Do Risk Analysis?
Who Does Risk Analysis?
A Brief Historical Perspective On Risk Analysis
Government Agencies
Private Sector
When Should We Do Risk Analysis?
Organization of Book
Summary and Look Forward
References

Uncertainty
Introduction
Uncertainty from 75,000 feet
The Uncertainty on Your Desk
Knowledge Uncertainty or Natural Variability?
Types of Uncertainty
Quantity Uncertainty
Sources of Uncertainty in Empirical Quantities
Being Intentional About Uncertainty
Summary and Look Forward
References

Risk Management
Introduction
Identifying Problems and Opportunities
Problem Recognition
Problem Acceptance
Problem Definition
Risk Estimation
Establish Risk Analysis Process
Individual Risk Management Activities
Risk Evaluation
Principles for Establishing Acceptable and Tolerable Levels of Risk
The Decision
Risk Control
Formulating RMOs
Evaluating RMOs
Comparing RMOs
Making a Decision
Identifying Decision Outcomes
Implementing the Decision
Risk Monitoring
Monitoring
Evaluation and Iteration
Risk Management Models
Summary and Look Ahead
References

Risk Assessment
Introduction
What Makes a Good Risk Assessment?
Definitions
Risk Assessment Activities
Understand the Questions
Identify the Source of the Risk
Consequence Assessment
Likelihood Assessment
Risk Characterization
Assess Effectiveness of RMOs
Communicate Uncertainty
Document the Process
Risk Assessment Models
Risk Assessment Methods
Qualitative Risk Assessment
Quantitative Risk Assessment
Summary and Look Ahead
References

Risk Communication
Introduction
Definitions
Internal Risk Communication
Coordination Between Assessors and Managers
Risk Communication Process
Documenting the Process
External Risk Communication
Risk and Crisis Communication
Public Involvement
Conflict Resolution
Summary and Look Forward
References

Examples
Introduction
Qualitative
Levee Risk Ranger
Pest Risk
Quantitative
Dredging Project Cost Estimate
Vibrio parahaemolyticus in Oysters
Summary and Look Forward
References

Appendix A: The Language of Risk and ISO 31000
Introduction
ISO 31000
Enterprise Risk Management
Observations
References

Index