accidents , for example . Another way to view probabilities is as the degree of belief of the party determining the value , a subjective interpretation .
In either approach the probability is used along with a measure of the consequence of the outcome to determine the risk . At an abstract-level consequences such as the death of a person or multiple people , harm to society , harm to the environment and so on are considered . In practice a “ surrogate criterion ” might be used , such as the release of radiation from a nuclear power plant to the environment , or the system failure of a railway control system 12 .
The resultant risk is the sum of all the consequences ( Ci ) and their likelihoods ( Pi ): Risk = ∑ _ i 〖 P i ∗ Ci 〗
Calculating quantitative risk values is only part of the process since the most important aspect is to understand the risk and make appropriate decisions . It is impossible to remove all risk , so the question is which risks are important to address .
One approach to deciding which risks to address is based on a curve which plots the probabilities against the degree of consequence :
There are three regions :
Figure 2-1 : Risk regions and ALARP ( Source : derived from Holmberg 12 ).
1 . Negligible risk : Area where the consequences and likelihood are low enough to allow a judgement that the risk is not a concern .
2 . Unacceptable risk : Area where the risk is judged to be too high due to significant consequences and / or high frequency .
12
Holmberg , “ Quantitative Risk Analysis .” Journal of Innovation 21