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Risk Mitigation Calculation

Discussion in 'FMEA - Failure Modes and Effects Analysis' started by Hsherman, Mar 6, 2024.

  1. Hsherman

    Hsherman New Member

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    Hi all! I am looking for calculations used to represent risk mitigation efforts. For example, if a business process relating to a revenue-generating line of business doesn't have a standard operating procedure (SOP) documented, and then it does get an SOP in place, how would you represent in dollars the amount of mitigated risk to the company now that the process has an SOP in place?

    Thanks in advance for your responses!
     
  2. Bev D

    Bev D Moderator Staff Member

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    The best answer is that you can’t and you shouldn’t. It would all be based on supposition and opinion. Not to mention a colossal waste of time.

    The worst answer is that it will depend on what effects might happen if the wrong thing were done and the severity of the resulting failure. Including any lawsuits and loss of faith in the company.
     
    yodon likes this.
  3. Andy Nichols

    Andy Nichols Moderator Staff Member

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    One of the better things about the AIAG-VDA FMEA method is that the leadership of an organization can simply decide to "shelve" a risk because it's too costly to do anything other than inspect and test...