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Calculating the Cost of Residual Risk

Posted: Tue Mar 23, 2021 12:52 pm
by NTT
In RiskyProject’s Cost of Risk After Mitigation in the Risk Properties, how can we calculate the “Cost of Residual Risk”. There doesn’t seem to be anyway to automatically calculate this, so what do you suggest?

Re: Calculating the Cost of Residual Risk

Posted: Tue Mar 23, 2021 12:55 pm
by Intaver Support
In most cases, the “Cost of Residual Risk” is the same as the Potential loss. This may sound odd, but mitigation plans normally only lower the probability of risks as this is the most cost efficient. Experience shows that lowering the impacts of a risk often are normally not cost effective. However, if plans include a lowering of potential impacts, you can either estimate this or use scenario analysis with multiple baselines (http://intaver.com/IntaverFrm/viewtopic ... ario#p3218) to generate a post-mitigated cost.

Re: Calculating the Cost of Residual Risk

Posted: Tue May 04, 2021 9:12 pm
by NTT
Does the Cost of Response plan as part of the post-mitigation cost calculation have any impact on the simulation results.

Re: Calculating the Cost of Residual Risk

Posted: Tue May 04, 2021 9:16 pm
by Intaver Support
If you have assigned a cost to a mitigation plan and assigned it to a risk this is used only for the post-mitigation calculation and does not affect the simulation results.

For example, we create a response plan in the Mitigation/Response view with a Cost of $25000.

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When then assign the response plan in the Risk Information > Properties tab.

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The Cost of the response plan is added to the Cost after mitigation calculation.

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If you want to include the probabilistic costs of a response plan into your Monte Carlo simulation, response plans can be assigned to specific activities.