Recognizing knowledge imperfection in the risk management process

Risk managers choose from a variety of methods to minimize the effects of accidental loss upon their organizations. The choice depends upon the probability/loss characteristics of a given exposure, This specification is not exact, however, due to a dynamic and complex environment. As a result, the decision is usually made under conditions of knowledge imperfection. The imprecision inherent in the risk management process can be formalized using the concept of fuzziness