Figure shows a probability-impact (or risk mapping) matrix that is frequently used as part of the risk analysis prioritization process. Here, ordinal probability-of-occurrence and consequence-of-occurrence risk scales are used (5, 4, 3, 2, 1 correspond to E, D, C, B, A since the actual scale coefficients are unknown). In this figure, L represents a low risk, which would generally be a risk acceptable to the project manager. The letter M represents a moderate risk, which will likely require a risk response. The letter H represents a high risk, which will need one or more risk responses. What are the advantages of using a high€“moderate€“low (or red€“ yellow€“green) risk designation as opposed to assigning quantitative numbers to each cell and risk level (e.g., 5 × 5 = 25 to 1 × 1 =1)?

Transcribed Image Text:

Level of occurrence Near Certainty Highly Likely Risk C Likely Unlikely Remote Consequence Level of Occurrence Unacceptable Acceptable with No Remaining Margin Acceptable with Significant Reduction in Margin Acceptable with Some Reduction in Margin Minimal or No impact