Qualitative Risk Analysis is a method used to assess risks based on their probability (likelihood) and impact (severity) using non-numerical, descriptive scales (e.g. Low/Medium/High). It helps prioritize risks for further action without complex calculations.
Key Features of Qualitative Risk Analysis
Subjective Judgment – Relies on expert opinions, historical data, and experience.
No Complex Math – Uses simple scales (e.g. 1–5 ratings) instead of statistical models.
Fast & Cost-Effective – Ideal for initial risk screening or when data is limited.
Visual Tools – Often presented via risk matrices or heat maps.
When to Use Qualitative Analysis?
✔ Early project stages (quick risk identification).
✔ When quantitative data is unavailable.
✔ For non-critical risks where detailed analysis isn’t needed.
Steps in Qualitative Risk Analysis
1. Identify Risks
Brainstorm risks (e.g. "Equipment failure " "Supply chain delay").
2. Assess Probability & Impact
Rate each risk using scales like:
Probability: Rare → Unlikely → Possible → Likely → Almost Certain
Impact: Negligible → Minor → Moderate → Major → Catastrophic
3. Plot on a Risk Matrix
| Impact → Probability ↓ | Low | Medium | High |
|---|---|---|---|
| High | Medium Risk | High Risk | Extreme Risk |
| Medium | Low Risk | Medium Risk | High Risk |
| Low | Very Low Risk | Low Risk | Medium Risk |
4. Prioritize Risks
Focus on High/Extreme risks (top-right of the matrix).
Ignore or monitor Low/Very Low risks.
5. Plan Responses
Mitigate (reduce probability/impact).
Accept (if cost to fix > risk impact).
Transfer (e.g. insurance).
Example: Construction Project Risk
| Risk | Probability | Impact | Priority |
|---|---|---|---|
| Worker injury due to falls | Likely | Major | High |
| Rain delays | Possible | Moderate | Medium |
| Tool theft | Unlikely | Minor | Low |
Action: Implement fall protection training (High risk).
Qualitative vs. Quantitative Analysis
| Aspect | Qualitative | Quantitative |
|---|---|---|
| Data | Descriptive (High/Medium/Low) | Numerical (probabilities, $ impacts) |
| Method | Expert judgment, risk matrix | Monte Carlo simulations, FMEA |
| Use Case | Initial screening, small projects | Complex projects (e.g., nuclear plants) |
Advantages & Limitations
✅ Pros: Fast, easy to understand, no need for hard data.
❌ Cons: Subjective, less precise than quantitative methods.
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