CBRM defines the current condition of individual assets by a numeric health index. This health index is calibrated against the Probability of Failure (POF). An ageing algorithm is applied that enables the future condition and POF to be estimated.
The risk for an individual asset is the product of the POF, the average consequence of failure for the asset group and the criticality of the asset. Consequences of failure relate to the following essential categories, which are related to the common unit of money: