A risk manager has identified multiple risks in an innovation project and needs to prioritize the use of resources to respond to the risks. Which analysis will help the risk manager in this situation?

Question

Options

• ASensitivity analysis
• BQualitative analysis
• CStatistical analysis
• DImpact analysis

• A
  3% (1)
• B
  81% (30)
• C
  5% (2)
• D
  11% (4)

Explanation

Qualitative risk analysis is specifically designed to prioritize risks by assessing and comparing their probability of occurrence and magnitude of impact using defined scales, without requiring complex numerical modeling. It produces a ranked list that guides resource allocation toward the most significant risks. Sensitivity analysis (A) is a quantitative technique that examines how changes in individual variables affect an outcome - useful for analysis but not for initial prioritization. Statistical analysis (C) requires detailed numerical data not typically available early in the process. Impact analysis (D) assesses only one dimension (impact), whereas qualitative analysis considers both probability and impact together to produce a balanced priority ranking.

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