This risk assessment leads to an output of ranging risks prior to the experiences of the receptors. Proper probabilistic risk assessments require adequate description of the input parameters. For this to happen, it requires that distributional data be available and further be adequate in describing the already identified input parameters. PRA purely employs probability and probability distributions in the characteristic analysis. Probability denotes the chances of occurrence of an uncertain phenomenon. The uncertainty constitutes occurrence of risk. Through PRA, risk assessments can be carried out and the levels of risk therein identified. Use of probability in the assessments of risk can be used in the understanding, quantifying and management of risk. Such a process can further be analysed in relation to the limitations of quantifying risk using probability. Reasons why probability is chosen as opposed to other measures of uncertainty Probability quantifies the description of levels of risk, characterized by the aspect of uncertainty or variability associated with risk estimates. Risk therefore becomes comprehensively characterized by using probability, which would not be the case when point estimate measure of risk is used (UKOOA, 2006, pg. 134). This feature therefore makes probability a better measure of risk than the point estimate method. Quantitative analysis of risk allows for diverse treatment of uncertainty variables used in the determination of underlying risks prior to the probability of occurrence of the identified risks. Risk management requires the use of flexible tools of analysis as well as availability of vast information in regard to what is being accounted for. In this regard, probability becomes the best measure of uncertainty. Uncertainty constitutes risks, and it is the risks that risk managers ought to address. Probability allows for flexibility in the analysis and treatment of variables in the probability equation (U.S. Environmental Protection Agency, 2005, pg. 78-79). Following this, a large volume of information can be derived, thereby allowing risk managers to make choices among alternatives. Other measures of uncertainty do not provide for flexibility and variant information, making risk managers fixed to the choices they make or to the scope that they can manage risks using such measures as a baseline. Managers need to assess and evaluate high-end risks, and the best gateway to succeeding in that is using probability in measuring levels of risk. Limitations of quantitative approach to risk The quantitative approach to risk is time consuming. It is procedural and treatment and analysis of variables require adequate time. Step by step consideration of variables is necessary in order to ensure that each and every aspect that constitutes risks is identified and accounted for (Stern and Fineberg, 1996, pg. 157). This process is characterized by huge requirement of resources. Adequate resources need to be pulled into place. Finances are required at every step of the quantification process. Gathering data and information is expensive. The management should be aware of these requirements before such an approach to risk is adopted. In order to come to a critical and fundamental understanding of the risks through the quantification approach all required information should first be in place. Data collection, cleaning, editing, analysis and reporting require that enough resources be allocated for the purposes.
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Topic: Modern Risk Analysis based on PRA Name: XXXXXXXXXX Professor: XXXXXXXX Institution: XXXXXXX XXXXXX Date: XXXXXXXXXX Introduction Probabilistic Risk Analysis (PRA) is a procedural use of probability distributions in the determination of levels of uncertainty associated with estimates of risk…
However, the companies can take some effective measures to minimize the probability of such risks. To do this, proper risk management and analysis must be done because it not only helps in dealing with the consequences of risks but also reduces the effects that any particular type of risk may generate for the project.
The developments recorded by market economy forced even bloc countries and China to shift from plan to market economy. China gained high profile in the manner it developed the markets. This is due to flexibility in imports and exports and giving permissions for permissions.
Country Risk Analysis (CRA) has thus emerged as a measure to identify the imbalances that can arise through cross border investment. (Meldrum: 2000). Risk measures include a number of indicators which are economic as well as socio political summarised as a comprehensive CRA.
Country risk analysis tries to identify the possibility for these risks which may decrease the expected return (Sergey Krivovichev, Peter Burns, Ivan Tananaev, 2007).
Risk aids an analyst to identify an event drawn from large samples of observations. These samples of observations help analysts to develop a statistical function which is open to probability analysis.
Country risk analysis (CRA) is used to find out how these potential risks may influence the return of internationally placed investments.
This paper attempts at establishing the main categories of country risks as well as difficulties encountered in country risk analysis.
These risk analysis tools(No author, 1999) will also help us make the best decision among many viable alternative courses of actions in order to control project plan's risk. Risk is basically defined as 'the perceived extent of possible loss'. Although many different people have differing views of the impact of a particular risk, It is a fact that what may be a small risk for one person could be large enough to destroy the livelihood of someone else.
In doing so, one cannot deny the fact that there are things to be done. However, there are risks and hazards that may come during the treatment process. A perfect example of this is those treatments that have something to do with surgical procedures especially with the disease, which are fatal if operation was not served.
At the same time, Canada's loss of trained people to the United States, a problem for most of the twentieth century, had ended. The criticism of some Canadian nationalists has some validity: not only do American multinational corporations carry on a significant part of Canada's economic activity, but they also have tended to do their research and development in the United States.