QUALITATIVE Vs QUANTITATIVE - RISK MANAGEMENT

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QUALITATIVE
QUANTITATIVE
RISK MANAGEMENT
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QUALITATIVE
RISK MANAGEMENT
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An approach to assessing and managing risks that
relies on subjective judgment and descriptive
analysis. It uses qualitative scales or
categories, like "low," "medium," or "high" risk,
to provide a qualitative understanding of the
risks associated with a project or
decision-making process.
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METHODS
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BRAINSTORMING
Gather a group of experts and stakeholders
to generate a list of potential risks
DELPHI TECHNIQUE
Structured approach for gathering and distilling
an expert panel's opinion on potential risks
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RISK MATRICES
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Risks are plotted on a matrix based on their
likelihood and impact, with categories like low,
medium, and high-risk
SWOT ANALYSIS
Strategic planning tool helps organizations
identif internal and external strengths,
weaknesses, opportunities, and threats
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USES
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Quickly identifies and categorizes risks
Provides an initial risk assessment in the
absence of detailed data
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Prioritizes risks based on subjective judgment
Helpful in making quick, high-level
decisions about risk
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QUANTITATIVE
RISK MANAGEMENT
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• A data-driven approach to assessing and
• mitigating risks that involves assigning precise
  numerical values to risks as well as associated
  parameters like probabilities and monetary
• implications. This approach uses quantitative
• data and mathematical models to quantify and
  analyze risks precisely.

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METHODS
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MONTE CARLO SIMULATIONS
Uses random sampling to assess various scenarios
and probabilities
DECISION TREES
Constructs decision trees to map out optimal
choices and their associated risks and rewards
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MATHEMATICAL MODELING
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Uses complex mathematical models to assess risks,
especially in financial engineering domains
quantitatively
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USES
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Precisely quantify and analyze risks
using numerical values
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Assess the likelihood and impact of risks in a
data-driven manner
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Analyze complex projects and financial decisions
with precision
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Facilitate risk comparisons and prioritize
mitigation efforts
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