Risk Assessment: Fundamentals

Zaman Sajid, Ph.D.

March 10, 2022

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Textbook

Risk Analysis in
Engineering:
Techniques, Tools,
and Trends by
Mohammad
Modarres

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What is risk?
• Risk is a measure of the potential loss
occurring due to natural or human
activities.
• Potential losses are the adverse
consequences of such activities in
form of loss of human life, adverse
health effects, loss of property, and
damage to the natural environment.
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Explain it to your grandma
• (Non-scientific definition)
Risk is chance of being in unwanted
situation

0 1
Impossible Certain
(No risk) (No risk)
How much is risk we will die?
No Risk, as it is certain
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Risk Analysis
• Risk analysis is a process through which the
probability or frequency of a loss by or to an
engineering system is estimated and the
magnitude of the loss (consequence).
• It is intended to avoid risk in a system
• It can be applied
 design stage,
 development, construction stage and
 operation stage

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Terminologies
•Risk: Risk is defined as the potential of losses
resulting from an exposure of recipients to a
hazard.
 Consequence   Event   Consequence 
Risk   Likelihood   Impact  
 Time   Time   Evet 

•Hazard: A hazard is an act or phenomenon

posing potential harm to cause environmental
damage, economic loss or human injury.
•Risk Profile: It is a graphical layout representing
the trend of occurrence probability and
consequences of hazard.
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Consequences include …
For an event of failure, consequences can be
defined as the degree of damage or loss from
some failure.
• Injury or loss of life
• Reconstruction costs
• Loss of economic activity
• Environmental losses

Potential Loss not gain!

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Risk Analysis: Objectives
• The entire risk assessment process answers three basic
questions:
•What can go wrong?: identifies the set of undesirable
(e.g., incident) scenarios.
•What is the likelihood that it will go wrong?
-Determine the probability or chances or frequencies
of these scenarios.
•What are the consequences if it does go wrong?
-Estimates the magnitude of potential losses.

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 Category: Risk Analysis
• Risk analysis can be categorized on the basis of the causes of risk or
the nature of loss (consequences) or both.
1.Health risk analysis: Determine potential diseases and losses of life
affecting humans, animals, and plants.
2.Process risk analysis: Estimate potential harms caused by accidents
(climatic conditions, fire, explosion etc.)
3.Security risk analysis: Estimate access and harm caused due to war,
terrorism, riot, crime.
4.Financial risk analysis: Determine potential individual, institutional
and societal monetary losses.
5.Environmental risk analysis: Determine losses due to noise,
contamination, and pollution in ecosystem
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Core Elements of Risk Assessment

Focuses on Risk management

identifying, essentially turns
quantifying, and into an effort to
characterizing manage such
losses. losses.

Exchange of
information

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Types of risk analysis
Qualitative risk analysis Quantitative risk analysis

• The potential loss is • The quantitative risk

qualitatively estimated using analysis attempts to
linguistic scales such as low, estimate the risk in form
medium, high. probability (or frequency)
• A risk matrix is formed to of a loss.
categorize the level of the risk • Probability is a way to
in form of frequency (or express uncertainty.
likelihood) of losses versus
potential magnitude
(amount) of losses in
qualitative scales.
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Risk Assessment Methodology
1.Definition of system
Define the system boundaries and objectives of
the analysis, Collect information for assessing
failure likelihood, Collect information for
assessing failure consequences.

2. Identification of hazards
Identify possible system hazards.
Example :- toxins, explosions, fire, dropping or
moving object.

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Methodology
3. Identification of system barriers:
Physically surround and isolate the hazard
(e.g., passive structures - walls, pipes,
valves, fuel clad structures);

Minimize exposure to the hazard

(e.g., protective clothing, bunkers, smoke
detector)

Mitigate the hazardous condition

(e.g., a cooling unit, a sprinkle system, an
emergency evacuation system).
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Methodology
4. Identification of challenges to barriers:
Identify what is needed to maintain the integrity of each
barrier.
These are due to internally or externally induced
degradation of the strength;
• Barrier strength or endurance degrades because of
Reduced thickness (due to deformation, erosion,
corrosion etc.)
• Stress of damage on the barrier increases by
Internal agents such as forces or pressure
Distortion by external objects or forces
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Methodology
5. Estimation of frequency or probability of a
hazard exposure:
Identify those scenarios in which all the barriers may
be breached and
the hazard may reach the recipients (human,
environment, productions line, organization etc),
followed by best possible estimation of the probability
or frequency for each scenario.

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Methodology
6. Consequence Evaluation:
 Evaluate consequences of exposed hazard.
(e.g., harm to people, damage to assets,
contamination of environment)

 Define risk acceptance criteria

 Develop strategies to avoid hazards, failure

of barriers

 Assess inspection costs and optimize at the

system level
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Example: Risk analysis
Example problem-1: Identification of water supply failure risk
Water Supply Branch 1
Source 1 Branch 3
City C

Water Supply
Source 2 Branch 2 Pumping Station

Figure 1: City Water Supply System

Possible Events
Identify possible sources of hazards Branch 1 Branch 2 Branch 3
water supply failure to the Scenario 1 F S S
City C? Scenario 2 S F S
Scenario 3 S S F
Guide Words:-Failure and Scenario 4 F F S
Success Scenario 5 F S F
Scenario 6 S F F
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at zaman.sajid@mun.ca
7 F F F
Risk Presentation
• Environment risk: dominated by the largest spills from
blowouts, pipeline or storage leaks , process leaks
• Usually expressed with any one of: Expected value of
spilled amount or Frequency of events with similar
consequences, Expected spilled amount/year, Qsp, is
expressed: N
Q   f q
sp n  1,2,3,.......N
n n
n i

qn= amount of spilled for scenario

• The accumulated frequency, fspill, i of events with similar
consequences is determined by: N
f f p
spill ,i n  1,2,3,.......N
n n ,i
n i

pn,i= probability of consequence i for scenario i.

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Risk Presentation
• Asset risk: damage to equipment and structures, as well as the
resulting disruption of production
• Usually expressed with any one of: Expected damage to
structures and equipment, Expected duration of production
delay, Frequency of events with similar consequences Expected
value of damage/year, D, is expressed:
N
D   fn  dn n  1,2,3,.......N
n i

dn= extent of damage (duration of delay) for scenario n

• The accumulated frequency, fdamage, i , of events with similar
consequences is determined by:
N
f damageconce,i   f n  pD ,n ,i n  1,2,3,.......N
n i

• pDn,i= probability of consequence i for scenario n.

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Risk Presentation
• Risk Matrices: It is a two-dimensional presentation of
likelihood and consequences of risk estimation.
• Qualitative scales for both dimensions to characterize the risk
by categorizing probabilities and consequences on the two
axes of a matrix.
• Example

A L M M H H H
B L L M M H H
Possibility
Category

C L L L M M H
D L L L L M M
E L L L L L M
F L L L L L L
VI V IV III II I
Consequence Category

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Example: Quantitative Risk Analysis
Example problem: Risk of bridge construction project.

 Step 1: Identify the top-event (Undesired Hazard)

 “bridge construction project getting delayed”
 Step 2: Identify the Intermediate and Basic hazards.
Intermediate : Equipment problems and material
unavailability
Basic : Bad weather, No raw materials, Fund
shortage, not procured and Supply failure

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Example: Continued

Bridge construction project

getting delayed

G1

Material unavailability Equipment problems

Bad
G2 G3 weather
BE7

No R/W Equipment Failure Equipment Unavailability

No Fund
Materials

BE1 BE2
G4 G5
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Example: Continued

Equipment Failure Equipment Unavailability

G4 G5
G4 G5

Not Not Supply

Operator Procured Failure
unavailable working

BE3 BE4 BE5 BE6

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Example: Continued
27

SR No. Basic hazards Probability Data

BE1 No Raw materials 0.25
BE2 No fund for purchase 0.2
BE3 Operator unavailable 0.4
BE4 Equipment not working 0.35
BE5 Equipment not procured 0.25
BE6 Equipment supply failure 0.15
BE7 Bad Weather 0.2

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Example: Continued
28
Top-event Probability calculation : started from the bottom
following gate-by-gate approach

G5  1  (1  PBE )  (1  PBE )  1  (1  0.25)  (1  0.15)  0.363

5 6

G4  1  (1  PBE )  (1  PBE )  1  (1  0.4)  (1  0.35)  0.61

3 4

G3  1  (1  G4 )  (1  G5 )  1  (1  0.61)  (1  0.363)  0.75

G2  PBE  PBE  0.25  0.2  0.05
1 2

G1  1  (1  G2 )  (1  G3 )  (1  PBE7 )
 1  (1  0.05)  (1  0.75)  (1  0.2)  0.81

The probability of a “bridge construction project getting delayed”

is 0.81.

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Risk Presentation
Probability ranges for a Risk Matrix

Category Description Probability Range

A Extremely unlikely Pr ≥ 0.95
B Highly Unlikely 0.75 ≥ Pr ≤ 0.94
C Doubtful 0.55 ≥ Pr ≤ 0..74
D Very unlikely 0.35 ≥ Pr ≤ 0.54
E unlikely 0.15 ≥ Pr ≤ 0.34
F Likely Pr ≤0.1

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Risk Presentation
Consequence Severity for a Risk Matrix

Severity Description Example

I None No loss
II Insignificant Loss below $5,000
III Minor Loss $5,000 to $50,000
Loss from $50,000 to
IV Moderate
$1,000,000
Loss from $1,000,000 to
V Major
$10,000,000
VI Catastrophic Loss of above $10,000,000

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Risk Matrix (Subjective)
The probability of a “bridge construction project getting
delayed” is 0.81
It might lead to medium risk for the project
Risk level
A L M M H H H
B L L M M H H
C L L L M M H
D L L L L M M
Probability

E L L L L L M
F L L L L L L
I II III IV V VI
Consequence Severity
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Risk acceptance
• Risk that’s acceptable to regulatory agency and also to the public
• Level of Risk of Death Per Year (voluntarily acceptable by public)

Smoking 30 cigarettes per day 1 in 200

Man aged 35-44 (Natural) 1 in 600

Motor Vehicle Accident 1 in 10 000

Accident at home 1 in 12 000

Rail accident 1 in 420 000

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Risk acceptance
• HSE:
 Acceptable FAR value 1.0
• US EPA
 For carcinogens/or other events a lifetime risk of
1 in million (1.0×10-06) is defined as acceptable.
 For non-carcinogens a hazard index less than 1.0
is defined acceptable
•UK-ALRAP:
• As Low as Reasonable Practicable
• ALARP means that detriment (be it to life or the
environment) is kept as low as reasonably
practicable.
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 Risk acceptance
• Nuclear Regulatory
Commission (NRC):
The individual early fatality 1.0E-05

risk should be less than 510- Unacceptable region

Probability of event occurrence

7 per year
1.0E-06

The individual latent cancer

Conditional

fatality risk should be less Acceptable

than 210-6 per year 1.0E-08

1.0 10 100
Number of fatalities

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ALARP
 ALARP means maintain risk as low as reasonably practicable
Intolerable Risk
(Risk can not justified on any ground)

Tolerable only if reduction

is impracticable or if its
cost is grossly
disproportionate the
improvement gained

The ALARP region

(Risk undertaken only if a benefit is desired)

Tolerable if cost of
reduction would exceed
the improvement gained

Broadly acceptable region

(No need for detailed working to demonstrate ALARP)

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ALARP application

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Read Chapter 1 of
Textbook

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