What distinguishes qualitative risk analysis from quantitative risk analysis?

The distinction between qualitative risk analysis and quantitative risk analysis is primarily rooted in their approaches to assessing risks. Qualitative risk analysis is centered around identifying and prioritizing risks based on their potential impact and likelihood, primarily using subjective assessment and descriptive terms rather than numerical values. This method allows project managers to quickly determine which risks require further attention and to devise mitigation strategies based on understanding rather than on detailed data.

In contrast, quantitative risk analysis takes a more numeric approach, estimating the potential effects of identified risks on project objectives using statistical techniques and quantitative measures. This analysis often incorporates detailed data, such as probabilities and potential cost impacts, to provide a more precise evaluation of risks, enabling more informed decision-making.

The combination of these analyses supports comprehensive risk management, where qualitative assessments help shape preliminary strategies and quantitative analyses refine those strategies with data-driven insights.