Modern Risk Analysis Based on PRA Essay Example | Topics and Well Written Essays - 1500 words

Modern Risk Analysis Based on PRA - Essay Example 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 level s 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 P rotection 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.