“The probability or threat of quantifiable damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through pre-emptive action.” Source: www.Wikipedia.org
Whoa! The definition went too far than imagined!
“A situation involving exposure to danger” Source: www.google.co.in
Nice …but not what I wanted.
“The probability of something happening multiplied by the resulting cost or benefit if it does.” Source: www.Wikipedia.org
In statistics, “Analysis of Risk” is a branch which is dedicated towards the computation of chances of loss or profit, winning or losing, life or death, etc. As said in the definition “The probability of something……..it does.”, the analysts deal with the probability of incidents. Whether it’s related to a road accident, or it relates life and death in hospitals or the chances of winning of a team according to their current strategy in the game or any other factor, probability is something which has its own existence.
You must have studied probability in your Xth class. It says that the probability cannot be greater than 1 and less than 0. We used probability in throwing of a dice, tossing of a coin, shuffling of a deck of cards, etc. and we didn’t bother about the precision of probability. We calculated probability till the 2nd place of decimals. Here, during the “Analysis of Risk”, we cannot ignore even the 10th place of decimal while calculating risk. After all, it’s “Risk”. And during calculation of “risk” probability has a whole new definition.
You ever thought what the chances of getting yourself into an accident are? You ever thought what the chances of getting yourself a lottery are? You ever thought about the probability of your promotion? (I see now I have your attention!) You ever thought about the probability of yourself getting fired from the job? (Yeah, this factor too has a probability!)
I think that much explanation in wordings is enough. Now, I call upon probability and statistics to take over.
Probability: In India, one road accident took place every minute in the year 2011.
Statistics: That means 5,25,600 accidents in the year 2011.
Me: Now that’s one hell of a mess for the roads as well for the transportation department. Hats off to the hospital staff which gave first aid to the victims.
Probability: As compared to 2010, the number of accidents per minute in 2011 have decreased to the probability of 0.9962994673 per minute.
Statistics: Of the total number of accidents taking place, driver’s fault accounts for 77.5% of accidents, cyclists’ fault accounted for 3.7% and defect in road condition for 1.5%.
Me: Does anyone take tests while issuing the driver’s license or it’s distributed like pamphlets of a residential area under construction?
Just like the above given examples, calculation of risk can be done in various fields. But no doubt it is one hell of a tedious job!
After reading this article, I am sure you will see probability in everything you do, everything you see and everything you hear!
Pay your respect to “probability”, “risk” and most of all “analysis of risk”. After all, its “Risk”!