What distinguishes qualitative risk analysis from quantitative risk analysis?

Qualitative risk analysis is primarily concerned with identifying and evaluating risks based on their characteristics and potential impact rather than on numerical values. This process involves assessing the probability of risks occurring and their potential consequences, allowing teams to determine which risks are most critical and should be prioritized for response. Such evaluations are often based on expert judgment and the experience of stakeholders, rather than on statistical models or calculations.

In contrast, quantitative risk analysis uses numerical data and statistical methods to assess risk likelihood and impact, often producing measurable values such as expected monetary loss or probability distributions. This approach focuses on quantifying risks for more detailed analysis, which can sometimes lead to additional complexity in the evaluation process.

The relationship between qualitative and quantitative analysis shows that qualitative methods lay the groundwork for identifying and understanding risks, while quantitative techniques provide a deeper understanding through numerical assessments and modeling.