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Working with Risk Thresholds

From the Risk Thresholds page, you create risk thresholds for use in your risk scoring matrices.

Risk thresholds necessary for a risk scoring matrix are:

  • Probability: The likelihood of a risk occurring.
  • Tolerance: The acceptability or manageability of a risk on a project.
  • Schedule: The amount of time the risk will increase or decrease the project schedule.
  • Cost: The cost impact if a risk occurs.

You can also add additional user-defined impacts necessary for the calculation of your risk score.

Risk Thresholds page

Table of Risk Threshold Elements

Item

Description

item one

Risk Threshold toolbar. See Risk Thresholds Toolbar.

item  two

Risk Threshold work area: You define the risk threshold name, type (Probability, Tolerance, Schedule Impact, Cost Impact, User-Defined Impact), and number of thresholds levels in this work area. Each threshold can have 2 - 9 levels; however, the cost impact, schedule impact, and any user-defined impacts must have the same number of levels for a given risk scoring matrix.

In the example above, the Cost Impact, Schedule Impact, Probability, and Tolerance thresholds are defined for the Harbour Pointe Assisted Living construction project. The Cost Impact and Schedule Impact thresholds are each defined with 5 levels and the Probability threshold is also defined with 5 levels. The risk scoring matrix that will be using these thresholds will have a matrix size of 5 x 5.

For each risk scoring matrix, only one threshold for Probability, Tolerance, Schedule Impact, and Cost Impact is allowed. You can add as many user-defined impacts as necessary. You create multiple thresholds of the same type, but with different values, when you create multiple risk scoring matrices.

item  three

Levels detail window: The details for each level are defined in this window. Define a name for each level and a code, which is a short name or abbreviation for the name. Also, define the range of acceptable values for that level; the range levels could be a percentage value, dollar amount, number of days, or a text string depending on the chosen threshold. You can define a color for each threshold level; however, you should define colors for the tolerance threshold. The colors for the threshold are used to give visual representation in the risk register. The colors for the tolerance threshold are used in the Probability and Impact Diagram (PID) to visually represent the threshold values. More importantly, the colors display in the Score and Score (text) fields on the risk register on the Projects Risks page. This enables you to easily identify where in the risk scoring matrix this risk falls in terms of severity.

In the example above, the Tolerance threshold is defined with 3 levels (High, Medium, and Low) and each range is assigned a color. You will see the impact the color makes after you create a risk scoring matrix, assign the thresholds to the matrix, and assign a risk scoring method. See Working with Risk Scoring Matrices.

Related Topics

Creating Risk Thresholds

Modifying Risk Thresholds

Risk Thresholds Page


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