function calculateRisk() {
var prob = parseFloat(document.getElementById('probability').value);
var impact = parseFloat(document.getElementById('impactScale').value);
var loss = parseFloat(document.getElementById('financialLoss').value);
var mCost = parseFloat(document.getElementById('mitigationCost').value);
var resultDiv = document.getElementById('riskResult');
if (isNaN(prob) || isNaN(impact) || isNaN(loss)) {
alert("Please fill in Probability, Impact, and Financial Loss fields.");
return;
}
// Calculations
var riskScore = (prob / 100) * impact;
var emv = (prob / 100) * loss; // Expected Monetary Value
resultDiv.style.display = "block";
// Determine Risk Level and Color
var color, level;
if (riskScore >= 7) {
color = "#ffcccc";
level = "CRITICAL";
document.getElementById('recommendation').style.color = "#cc0000";
} else if (riskScore >= 4) {
color = "#fff3cd";
level = "MODERATE";
document.getElementById('recommendation').style.color = "#856404";
} else {
color = "#d4edda";
level = "LOW";
document.getElementById('recommendation').style.color = "#155724";
}
resultDiv.style.backgroundColor = color;
document.getElementById('scoreDisplay').innerHTML = "Risk Exposure Score: " + riskScore.toFixed(2) + " / 10 (" + level + ")";
document.getElementById('emvDisplay').innerHTML = "Expected Monetary Value (EMV): $" + emv.toLocaleString(undefined, {minimumFractionDigits: 2});
if (!isNaN(mCost) && mCost > 0) {
var netSavings = emv – mCost;
document.getElementById('roiDisplay').innerHTML = "Mitigation Net Savings: $" + netSavings.toLocaleString(undefined, {minimumFractionDigits: 2});
if (netSavings > 0) {
document.getElementById('recommendation').innerHTML = "ADVISE: The cost of mitigation is lower than the expected risk loss. Implementation recommended.";
} else {
document.getElementById('recommendation').innerHTML = "ADVISE: The cost of mitigation exceeds the expected risk loss. Consider risk acceptance or alternative strategies.";
}
} else {
document.getElementById('roiDisplay').innerHTML = "";
document.getElementById('recommendation').innerHTML = "ADVISE: Ensure your impact assessment covers both operational and reputation damage.";
}
}
Understanding Risk Assessment Logic
Quantitative risk assessment is a methodology used by project managers, business analysts, and security professionals to calculate the numerical value of risks. This allows organizations to prioritize mitigation efforts based on empirical data rather than subjective intuition.
The Mathematical Framework
Probability: The statistical likelihood that an event will occur within a specific timeframe, expressed as a percentage.
Impact Severity: A qualitative scale converted to quantitative data (1-10) representing the magnitude of disruption.
EMV (Expected Monetary Value): Calculated as Probability % × Financial Impact. This represents the average outcome of a risk if it were to occur multiple times.
Example Calculation
Imagine a data center faces a 10% annual probability of a cooling failure. If the failure occurs, the estimated financial loss in hardware and downtime is $200,000.
If a redundant cooling system (Mitigation) costs $15,000 per year, the Net Savings is $5,000 ($20,000 – $15,000). In this scenario, investing in the mitigation strategy is mathematically justified.
Risk Response Strategies
Once you calculate your risk score using the tool above, you generally follow one of four strategies:
Avoidance: Changing plans to eliminate the risk entirely.
Mitigation: Taking action to reduce the probability or impact.
Transfer: Shifting the impact to a third party (e.g., purchasing insurance).
Acceptance: Acknowledging the risk and maintaining a contingency fund because the cost of mitigation is too high.