---
title: "Qualitative versus quantitative risk analysis"
subject: "ICT Project Management"
chapter: 12
key: "semester_7/ict_project_management:qualitative-vs-quantitative-risk"
source: https://www.bctengineer.com/q/semester_7/ict_project_management/qualitative-vs-quantitative-risk
site: BCT Engineering
---

# Qualitative versus quantitative risk analysis

ICT Project Management · Chapter 12: Project Risk Management

- Asked in: year not given
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/ict_project_management/qualitative-vs-quantitative-risk
- Whole chapter: https://www.bctengineer.com/md/semester_7/ict_project_management/chapter-12

## Question

Differentiate qualitative and quantitative risk analysis process.

## Short answer

Qualitative analysis subjectively prioritizes risks using a probability-impact matrix, quick and done on all projects. Quantitative analysis uses numerical techniques like EMV, decision trees, and Monte Carlo to estimate objective probabilities and cost/time reserves, applied to top risks after qualitative analysis and requiring reliable data.

## Answer

**Qualitative risk analysis** prioritises risks for further analysis or action by assessing and combining their probability of occurrence and impact, using subjective ratings. **Quantitative risk analysis** numerically analyses the effect of identified risks on the overall project objectives using numbers (money, time).

| Basis | Qualitative analysis | Quantitative analysis |
|---|---|---|
| Nature | Subjective, descriptive | Objective, numerical |
| Output | Priority ranking (high, medium, low) | Probability of meeting cost/time goals, expected values |
| Data needed | Expert opinion, little data | Reliable data, estimates, models |
| Time and cost | Fast and cheap | Slower, costly |
| Done | Always, for every project | When needed: large or high-risk projects |
| Sequence | First | After qualitative |
| Scale | Very low to very high | Rs, days, percentage |
| Tools | Probability-impact matrix, risk categorisation, risk urgency assessment, expert judgment | Sensitivity analysis, expected monetary value (EMV), decision tree, Monte Carlo simulation |
| Output example | "Vendor delay: high priority" | "EMV of vendor delay = Rs 2 lakh; 70% chance to finish within 12 months" |

#### Probability-impact matrix (qualitative)
```text
Prob.
High | M | H | H
Med  | L | M | H
Low  | L | L | M
     Low Med High  Impact
```

#### EMV example (quantitative)
Risk: server failure with probability 0.2 and cost Rs 5,00,000.
EMV = 0.2 × 5,00,000 = Rs 1,00,000.

#### Relation
Qualitative analysis filters the many risks into a short list; quantitative analysis is applied on top-priority risks to estimate contingency reserves and decide responses.

**Example:** In an ERP project, qualitative rating marks "data migration errors" as high; quantitative analysis estimates the expected delay at 3 weeks and cost at Rs 4 lakh to set the reserve.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Which is correct about the order of the two analyses?
   A. Quantitative is done first, then qualitative
   B. Both are done at the same time always
   C. Qualitative is first; quantitative is done after on top-priority risks when needed
   D. Only quantitative is required for every project
   Answer: C. Qualitative analysis filters risks first; quantitative follows, mainly for large or high-risk projects. (Key point: Sequence)

2. A server failure has probability 0.2 and cost Rs 5,00,000. What is the EMV?
   A. Rs 25,00,000
   B. Rs 1,00,000
   C. Rs 10,000
   D. Rs 5,00,000
   Answer: B. EMV = probability x impact = 0.2 x 5,00,000 = Rs 1,00,000. (Key point: EMV calculation)

3. What is the typical output of qualitative analysis?
   A. Priority ranking such as high, medium, low
   B. Monte Carlo results
   C. Probability of finishing in 12 months
   D. Expected monetary value in rupees
   Answer: A. Qualitative analysis gives a subjective priority ranking, while quantitative gives numerical results. (Key point: Qualitative output)

4. Which set contains quantitative analysis tools?
   A. Probability-impact matrix and risk urgency
   B. Sensitivity analysis, EMV, decision tree, Monte Carlo
   C. Brainstorming and Delphi
   D. Risk categorisation and expert judgment
   Answer: B. Sensitivity analysis, EMV, decision trees and Monte Carlo simulation are quantitative; the matrix is qualitative. (Key point: Quantitative tools)

## Related in ICT Project Management

- [Effective versus ineffective project managers](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aeffective-ineffective-managers) — ICT Project Management, chapter 2

## Related in other subjects

- [Qualitative and quantitative risk analysis methods](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aqualitative-quantitative-risk-analysis-methods) — Project Engineering, chapter 5
- [Risk management; qualitative, quantitative; steps](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-management-qual-quant-steps) — Project Engineering, chapter 5
- [Manage risk; qualitative and quantitative system](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-manage-qualitative-quantitative) — Project Engineering, chapter 5