Failure Mode & Effects Analysis (FMEA) is a method for evaluating risk. Each potential failure mode is evaluated for:
S: the severity of the consequences if it does occur
O: the probability of occurrence
D: the probability of detection before shipping.
Each of these is rated on a scale from 1 to 10, and the three values multiplied to find the Risk Priority Number (RPN). If the RPN is above a specified threshold, action is taken to reduce it. The FMEA is often used as the basis for the 'Control' stage in a Six Sigma project.
See also Design Failure Mode and Effects Analysis, DFMEA.