A New Method and Metric for Quantitative Risk Analysis

Quantitative risk analysis provides practitioners a deeper understanding of the risks in their projects. However, the existing methods for impact assessment are inaccurate and the metrics for risk prioritization also can not properly prioritize the risks for certain cases. In this paper, we propose a method for measuring risk impact by using AHP. We also propose a new indicator, risk intensity (RI), to prioritize the risks of a project. Compared with the widely used metric Risk Exposure (RE), the contours of RI show a convex pattern whereas the contours of RE show a concave pattern. RI allows practitioners weight probability and risk impact differently and can better satisfy the needs of risk prioritization. Through a case study, we found that RI could better prioritize the risks than RE.

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