Quantitative Risk Analysis

A.

Sensitivity analysis is the quantitative risk analysis technique that: -> Assist in determination of risk factors that have the most potential impact -> Examines the extent to which the uncertainty of each element affects the object under consideration when all other uncertain elements are held at their baseline values Incorrect Answers: B: Fault tree analysis provides a systematic description of the combination of possible undesirable occurrences in a system.

It does not measure the extent of uncertainty.

C: Cause-and-effect analysis involves the use of predictive or diagnostic analytical tool for exploring the root causes or factors that contribute to positive or negative effects or outcomes, and not the extent of uncertainty.

D: Scenario analysis provides ability to see a range of values across several scenarios to identify risk in specific situation.

It provides ability to identify those inputs which will provide the greatest level of uncertainty.

But it plays no role in determining the extent of uncertainty.

The type of analysis described in the scenario is Sensitivity analysis.

Sensitivity analysis is a technique used to determine how much the output of a system or model changes when the input variables are changed. It involves varying the values of one input variable while holding all other variables constant and measuring the effect on the output. This technique helps to identify which variables have the most significant impact on the output and which are the most critical to manage in order to mitigate risks effectively.

In this scenario, the risk official at Bluewell Inc. is measuring the exposure of various risk factors. By examining the extent to which the uncertainty of each element affects the object under consideration when all other uncertain elements are held at their baseline values, the risk official is trying to determine which risk factors pose the highest potential risk to the enterprise. This process involves a sensitivity analysis, as the risk official is analyzing the sensitivity of the output (the potential risk to the enterprise) to changes in each input variable (the uncertain elements).

The other options provided in the answers have different meanings and purposes:

• Fault tree analysis is a technique used to identify the various events and conditions that can lead to a specific undesired outcome. It is used to analyze the causes of system failures or accidents.
• Cause-and-effect analysis, also known as fishbone diagram or Ishikawa diagram, is a technique used to identify and analyze the causes and effects of a particular problem or issue. It is used to explore the underlying causes of a problem and identify potential solutions.
• Scenario analysis is a technique used to analyze the impact of different scenarios on a particular outcome or decision. It involves creating and analyzing different scenarios based on various assumptions to evaluate potential outcomes.