Performing quantitative risk analysis
Having a probabilistic analysis of project risk and determining the impacts financially can sometimes shift stakeholders in the direction they need to go to pursue the best responses to risk, and an excellent way is to apply a price tag to identified threats. Trust me when I say most stakeholders aren't afraid of the number five; they are fearful of the number 50,000, especially when that is what you calculate as a potential project loss due to a threat event. Quantitative risk analysis is statistical and mathematically focused. Many techniques can be used to quantify objectively, even when using subjective information, but the most commonly used and tested on is expected monetary value (EMV). This is due to the ability to assess risks numerically and produce a result that allows for the best decisions to be made in unknown circumstances.
Expected monetary value (EMV)
EMV is a way to look at the probability of a risk event and the financial...
