Risk Assessment And Risk Management

1901 Words Oct 8th, 2014 8 Pages
The purpose of this term paper is to examine the terms ‘risk’, ‘risk assessment’ and ‘risk management’ and discuss how uncertainty affects these. The first part of the paper will be discussing risk in further detail especially when risk can be disadvantageous to an individual or a corporate body, and the need to eliminate or minimize the disadvantageous risk, especially if human life is at stake. The next part will start discussing the process of how industrial companies in particular go about starting the process of mitigation and reduction of risk to as low as reasonably practicable (ALARP), which is assessing risk through the use of variable tools. After the risk is assessed, then the process of actually putting things in place to manage the risks and their probable effects is discussed. The paper will round off with a discussion on uncertainty and how uncertainty affects the processes of risk assessment and risk management. Aside from uncertainty, the common word in all these terms is the word risk. Risk is covered by many definitions according to the context that it is used in. Some definitions are:
1. “Chance or probability harm is caused by exposure to a hazard” 2. “Probability that an actual return on an investment will be lower than expected”

3. “Product of consequence and probability of a hazardous effect or phenomenon”

4. “Threat; danger; possibility of something unpleasant”

Risks most of the time have a negative connotation to them. Risks which have a…
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