What is the main difference between qualitative and quantitative risk analysis?

The main difference between qualitative and quantitative risk analysis lies in their focus and methodology. Qualitative risk analysis is primarily concerned with assessing the likelihood of risks and understanding their potential impact in a more subjective way, often utilizing expert judgment and descriptive scales. This analysis helps prioritize risks based on their significance and potential effects on the project.

On the other hand, quantitative risk analysis takes a more rigorous approach by measuring numerical impacts associated with risks. It requires the use of data, statistical analyses, and modeling techniques to quantify the effects of risks in financial terms or timelines. This type of analysis aims to provide a clear understanding of the potential outcomes and probabilities of various risk scenarios.

By concentrating on both likelihood and numerical impact, qualitative and quantitative methods complement each other in risk management. The correct choice highlights this distinction, emphasizing that qualitative focuses on assessing likelihood while quantitative is concerned with measuring numerical impacts.