So, it should come as no surprise that LANL has done a lot of thinking about risk management. I ran across one of their publications on qualitative risk management: "Risk Factor Analysis—
A New Qualitative Risk Management Tool", and was intrigued by the title, thinking: something new under the sun? [No pun, but LANL is located in the US southwest desert]
Actually, RFA as they call it, is perhaps a new label on a fairly standard idea: putting numerical values on qualitative evaluations--better known as utility. And then using the numerical values to do arithmetic, the results of which leading toward priority separations among.
I take some umbrage with the scientific minds behind this tool: substituting one label for another--eg "1" instead of 'L' (for low)--does not thereby enable arithmetic on the new labels just because they are numbers. But don't take my word for it: consult the authority, Dr. Edmund Conrow who wrote the classic text that addresses this very issue: "Effective Risk Management: Some keys to success" [and, also a bit of trivia, Conrow also wrote the risk chapter for number one all time "Project Management: A Systems Approach to Planning, Scheduling, and Controlling", by Harold Kerzner]
Nevertheless, in their publication they have a very neat diagram, not altogether unique, but certainly compact, of a view of qualitative risk management. Note the inclusion of 'budget'. Nothing from the government would be complete without it.
