Certified Maintenance & Reliability Professional (CMRP) Practice Exam

How is the risk index number defined?

1. Probability of occurrence divided by consequence

2. Consequence multiplied by budget impact

3. Impact of risk event multiplied by probability of occurrence

4. Severity level added to the frequency of occurrence

The correct answer is: Impact of risk event multiplied by probability of occurrence

The risk index number is defined as the impact of a risk event multiplied by the probability of occurrence. This definition is foundational in risk management because it provides a quantifiable measure of risk by considering both the likelihood of an event happening and the potential consequences if it does occur. When evaluating risks, organizations aim to understand not just how often a risk is likely to happen but also how severe the effects will be if it does. By multiplying the two factors—impact and probability—professionals can prioritize risks, making it easier to ensure that resources are allocated effectively to mitigate those with the highest potential negative effect. In contrast, other options focus on varying methods of calculating or discussing risk but do not capture the fundamental concept as concisely. For instance, dividing probability by consequence could lead to misunderstanding the overall risk management framework, while multiplying consequence by budget impact does not directly address risk in terms of likelihood. Similarly, simply adding severity level to frequency does not provide a comprehensive view of the risk as it neglects the essential relationship between impact and probability.