TOPIC: Variability risk Vs Ambiguity risk

Hi,

I 'm having a hard time understanding the difference between variability risk and ambiguity risk. Can you please explain these two concepts with examples if possible?


Thank you!!

Ximena.

Hi Ximena,

I strongly suggest reading this PMI article about risks, it does a good job explaining various types of risks:
LINK

In essence:
Variability risk: There is a set number of possible outcomes but we don’t know which one will actually occur.
(ex. The number of errors found during testing may be higher or lower than expected)

Ambiguity risk: Come from uncertainties arising from lack of knowledge or understanding.
(ex. New disruptive technologies or market conditions)

Yes this is very helpful Joe Pang.

In my understanding also, simple way to remember is:

Variability means - Inconsistent ( So Variability risk means key characteristics of planned event to be uncertain- The Planned event here is "productivity", it will be there but will it be above target or below target or just the target ).

Ambiguity means - Inexactness or fluctuation which is kind of similar to inconsistent but here it the key word is "Imperfect knowledge " . Example - Future Development in Audit process.

Hi,
Variability Risk & Ambiguity Risk are both classified under non-event based risks.
We can further divide non-event based risk into following two categories:

# Variability Risk- Out of all the possible risks we cannot predict their occurrence.
Mont-Carlo analysis is the tool used to calculate risk variability.

# Ambiguity Risk- These risks result in errors, mistakes, failures etc. and are caused due to lack of knowledge.
Example- New technical improvements, new technologies, new regulations etc.