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Introduction
Although the qualitative and quantitative approaches have a similar objective, their modes of application are slightly different. According to Mahdiyar et al. (2020, p. 472), the qualitative risk assessment is responsible for risk prioritization, especially on those occurring during the life cycle of a project. According to Züst (2021, p. 8), qualitative analysis assesses a risks chances and implications, while scoring using assessment matrix to score projects risks. The qualitative method focuses on individual hazards and project probability.
On the other hand, quantitative risk assessment is more of a mathematical and scientific approach. In this case, data analysis is important in generating knowledge about statistical risks such as allocation of resources, demand, scheduling, and costs. Quantitative approaches like Monte Carlo simulations utilize numerical variables, especially in projecting results of a project such as duration (Gupta and Thakkar, 2018, p. 11). As a result, this lowers the risks relating to the entire outlay of the project.
The Key Advantages and Disadvantages of Qualitative and Quantitative Risk Assessments
Qualitative and quantitative risk assessments are subjected to a series of advantages and disadvantages. Therefore, the two approaches are recommended for use by companies, managers, and stakeholders. Qualitative analysis is advantageous to an extent that it is friendly and portrays easy communication with its stakeholders (Wali and Othman (2019, p. 99). A risk register or risk assessment matrix clarifies which risks should be emphasized. The method does not require expensive software so that less-experienced team members can use it.
On the other hand, the qualitative approach is disadvantageous in that it has no statistical evaluation. Since the qualitative approach involves the assessment of personal risks, it is not possible to determine the complete overview of project risks (Moud et al., 2018, p. 22). In addition, the qualitative approach is subjective, especially for individuals conducting the risk assessment. This depends on risk personalities while differentiating such risks from person to person.
Quantitative risk assessment applies a scientific approach that ensures the detailed analysis of financial and scheduling risks. When comprehending the project risks, quantitative risk assessment is responsible for their objective overview (Moud et al., 2018, p. 24). The results of quantitative analysis are determined based on the information provided, without consideration of factors like risk personality. Additionally, the findings of this approach can be employed in complex projects and expressed using management terminology (Gupta and Thakkar, 2018, p. 16). Quantitative analysis is unfavorable due to the lack of experienced software users and employees. It is also lengthy and resource-intensive. The quantitative analysis relies on accurate original data. Finally, its mathematical sequence generates inaccurate data, compromising risk assessments.
Conclusion
In general, both qualitative and quantitative methods of risk assessments are important in creating a strong assessment of risks. The comprehension of risks with projects such as the Souvenir Book project is important. Therefore, the use of effective tools available for the analysis of risks greatly benefits projects. Although each of these approaches involves individual use, using both helps in the achievement of better project outcomes.
References
Gupta, V.K. and Thakkar, J.J. (2018). A quantitative risk assessment methodology for construction project. Sdhan, 43(7), pp.1-16. Web.
Mahdiyar, A. et al. (2020). Practical risk assessment of ground vibrations resulting from blasting, using gene expression programming and Monte Carlo simulation techniques. Applied Sciences, 10(2), p.472. Web.
Moud, H.I. et al. (2018). Qualitative and quantitative risk analysis of unmanned aerial vehicle flights over construction job sites. In Proceedings of the Eighth International Conference on Advanced Communications and Computation (INFOCOMP 2018), Barcelona, Spain (pp. 22-26). Web.
Wali, K. and Othman, S. (2019). Schedule risk analysis using Monte Carlo Simulation for residential projects. ZJPAS, [online] (5), p.31. Web.
Züst, S. et al. (2021). Life-cycle oriented risk assessment using a Monte Carlo simulation. Applied Sciences, 12(1), p.8. Web.
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