![]() ![]() In August 1978, business textbook author David E Hussey defined an investment "risk matrix" with risk on one axis, and profitability on the other. ![]() It is said to have been an important step towards the development of the risk matrix. ![]() On January 30 1978, a new version of US Department of Defense Instruction 6055.1 ("Department of Defense Occupational Safety and Health Program") was released. For example, the likelihood of death in an aircraft crash is about 1:11 million but death by motor vehicle is 1:5000, but nobody usually survives a plane crash, so it is far more catastrophic. The risk matrix is approximate and can often be challenged. The following is an example matrix of possible personal injuries, with particular accidents allocated to appropriate cells within the matrix: This would be done by weighing the risk of an event occurring against the cost to implement safety and the benefit gained from it. The company or organization then would calculate what levels of risk they can take with different events. However it must be considered that very low probabilities may not be very reliable. The probability of harm occurring might be categorized as 'certain', 'likely', 'possible', 'unlikely' and 'rare'.
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