Case Studies with Questions and Answers
Chapter 04: Quantifying and Prioritizing Loss Potential
As the corporate security manager working with your inexperienced staff to develop a risk management program, you have introduced them to the quantitative approach using the annual loss expectancy (ALE) formula. Your staff is confused as to how to actually use this quantitative method. Therefore, you decided that a qualitative method may be easier for them to use. Once experience is gained in using that method and the staff understands the philosophy behind it, you can reintroduce the quantitative method to them. You explain to your staff that the qualitative method consists of using an estimated frequency-of-loss approach. The risk management model will use the adjectives high, medium, and low as factors to measure both frequency and severity of loss.