Risk can be analyzed in one of two basic ways: inductively or deductively, that is either bottom-up or top-down. In a deductive analysis a system failure is postulated. The analyst then works backwards to deduce what combinations of events could have occurred for the system failure to have taken place (a detective solving a crime is thinking deductively). Fault tree analysis, the topic discussed in this section, is deductive. An inductive analysis works in the other direction. A single failure, such as a pump stopping or a valve closing at the wrong time, is postulated. The inductive approach then determines what impact the item failure could have on the overall system performance.
This seventeen minute YouTube video shows how Fault Trees are developed and how they can be used in the process industries.