API 580 Risk Based Inspection Practice Test

Which approach in risk assessment focuses on broad categories of POF and COF?

1. Quantitative risk analysis

2. Qualitative risk analysis

3. Systematic risk analysis

4. Historical risk assessment

The correct answer is: Qualitative risk analysis

The focus of qualitative risk analysis is on broad categories of Probability of Failure (POF) and Consequence of Failure (COF). This approach assesses risks based on judgment and experience rather than precise numerical data. It utilizes expert input and general criteria to categorize risks, enabling organizations to identify key areas that may require attention without the complexity of numerical models. Qualitative assessments often rely on rank ordering or categorization, which helps stakeholders to prioritize risks effectively and make informed decisions. In contrast, quantitative risk analysis would involve numerical measurement and statistical methods to evaluate risks more precisely, often requiring detailed data that goes beyond simple categorization. Systematic risk analysis may incorporate both quantitative and qualitative elements but tends to focus more on structured methodologies and frameworks rather than broad categories. Historical risk assessment relies on past incidents and data, which may not completely address current POF and COF factors in a broad spectrum context. Qualitative risk analysis provides a simpler, yet effective, framework for identifying and addressing potential risks in a straightforward manner.