Determining Risk Priority: Probability and Impact Matrix
Question
Mark is the project manager of the BFL project for his organization.
He and the project team are creating a probability and impact matrix using RAG rating.
There is some confusion and disagreement among the project team as to how a certain risk is important and priority for attention should be managed.
Where can Mark determine the priority of a risk given its probability and impact?
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D.D.
Mark can determine the priority of a risk given its probability and impact by referring to the probability and impact matrix, which is a component of the risk management plan. The probability and impact matrix is a tool that helps in identifying and prioritizing risks based on their probability of occurrence and potential impact on the project objectives.
In the probability and impact matrix, the probability of a risk occurring is listed along one axis, and the impact of the risk on the project objectives is listed along the other axis. The probability is usually rated on a scale of low, medium, and high, while the impact is rated based on its severity, such as low, moderate, high, and very high.
The matrix helps in assigning a risk score to each risk event based on its probability and impact. The risk score can then be used to determine the priority of the risk and the appropriate response to manage it.
The RAG rating (Red, Amber, Green rating) is a popular way of representing risk scores. Risks with high probability and high impact are assigned a red rating, indicating they require immediate attention and action. Risks with moderate probability and impact are assigned an amber rating, indicating they should be monitored and managed. Risks with low probability and impact are assigned a green rating, indicating they can be ignored or managed with minimal attention.
Therefore, Mark can refer to the probability and impact matrix to determine the RAG rating of a particular risk based on its probability and impact, and prioritize the risk accordingly. The risk management plan should include detailed guidelines on how to create and use the probability and impact matrix for risk assessment and prioritization.
