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contingency plan: A plan for dealing with a risk factor, should it become a problem.
continuous risk management: The process of analyzing the progress of a planned activity, project, or program on a periodic, ongoing basis and handling identified risk factors; includes developing options and fallback positions to permit alternative solutions to reduce the impact if a risk factor becomes a problem.
crisis: A critical state of affairs in which a decisive, probably undesirable outcome is impending.
crisis management: Steps to take when a contingency plan doesn't solve the associated problem.
problem: A negative situation to overcome. A risk factor becomes a problem when a risk metric (an objective measure) crosses a predetermined threshold (the problem trigger).
risk: The probability of incurring a loss or enduring a negative impact.
risk acceptance: Acknowledgment of a risk factor's existence along with a decision to accept the consequences if the corresponding problem occurs. Also called risk assumption.
risk analysis: The process of examining identified risk factors for probability of occurrence, potential loss, and potential risk-handling strategies.
risk avoidance: A course of action that removes a risk factor from further consideration (for example, by changing the requirements, extending the schedule, or transferring the risk factor to another domain).
risk exposure: The product of probability times potential loss for a risk factor; usually expressed in monetary units or utility.
risk factor: A potential problem that would be detrimental to a planned activity, project, or program, characterized by the probability of problem occurrence (0 < p < 1) and a potential loss (of life, money, property, reputation, and so on) should the problem occur. Both probability and potential loss might change over time.
risk handling: A course of action taken in response to a risk factor; includes risk acceptance, risk avoidance, risk transfer, and risk mitigation.
risk identification: An organized, systematic approach to determining the risk factors associated with a planned activity, project, or program.
risk leverage factor ( rlf):rlf = ( reb - rea)/ rmc, where reb is risk exposure before risk mitigation, rea is risk exposure after risk mitigation, and rmc is the risk mitigation activity's cost. Larger rlfs indicate better mitigation strategies.
risk management: An organized process for identifying and handling risk factors; includes initial identification and handling of risk factors as well as continuous risk management.
risk metric: An objective measure associated with a risk factor to be mitigated.
risk mitigation: A course of action taken to reduce the probability of and/or potential loss from a risk factor; includes executing contingency plans when a risk metric crosses a predetermined threshold (when a risk factor becomes a problem).
risk reduction: Reducing the probability and/or potential impact of a risk factor. Risk reduction might involve research, prototyping, and other means of exploration.
risk transfer: Transferring responsibility for managing a risk factor to another organization or functional entity better able to mitigate the risk factor.
risk trigger: The predetermined threshold value of a risk metric that triggers invocation of a contingency plan when the risk metric crosses the threshold.
root-cause analysis: Determination of a potential problem's (a risk factor's) underlying cause or causes.
uncertainty: The result of not having accurate or sufficient knowledge of a situation; often the root cause of a risk factor.
utility: A measure of value within a given value system, often measured on a scale of 0 to 100.