Probability/Impact Thresholds


Words on this page that have been underlined and italicized can be found in the glossary on the right-hand side of the page.

Overview

The probability/impact matrix is a grid for defining the probability and impact thresholds (e.g. L, M, H), which are used for ranking risks in the risk register. Two separate schemes can be saved: one for threats and one for opportunities. Schedule impact can be set to %, days, or months. Cost impact can be set to thousands or millions. As with everything else in this window, these units are qualitative and do not factor in to the simulation or results.

The midpoint of the range of the qualitative probability is used as a default for the quantitative probability. For example, if a risk is set to M (40-60%), the quantitative probability will be set to 50% (unless the quantitative probability was already entered manually). Subsequently changing the qualitative probability to an H, however, or modifying the values in the Qualitative Thresholds window will have no further effect.

Adjusting Thresholds

  1. Click the Risk  driver.
  2. Click the Rating button in the Risk Properties pane.
  3. Click the dropdown next to Risk Category and choose between Threat and Opportunity.
  4. To change the number of probability thresholds, click the dropdown next to Probability Bands.
  5. Adjust the numerical probability value for each threshold as desired.
  6. To change the number of impact thresholds, click the dropdown next to Impact Bands.
  7. If your risks will impact the schedule, enter an impact for each threshold.
  8. If your risks will impact the budget, click the Cost Impact radio button and enter an impact for each threshold.
  9. When finished, click the X icon to save and close the window.

The impact thresholds are limited to 3 digits. 

The currency can be changed by adjusting the currency setting for your operating system.

The thresholds are abbreviated as follows:

ThresholdAbbreviation
Ultra HighUH
Extremely HighEH
Very HighVH
HighH
ModerateM
LowL
Very LowVL
Extremely LowEL
Ultra LowUL

Risk Rating

The probability and impact thresholds are multiplied together and mapped from 0-100 to generate the risk ratings. NetRisk comes predefined with six different color schemes as follows:

Color SchemeIdeal Use Case
FireFewer number of rating thresholds
ForestFewer number of rating thresholds
HorizonGreater number of rating thresholds
IceFewer number of rating thresholds
PondGreater number of rating thresholds
RainbowGreater number of rating thresholds

To modify:

  1. Click the Risk  driver.
  2. Click the Rating button in the Risk Properties pane.
  3. Click the dropdown next to Risk Category and choose between Threat and Opportunity.
  4. Click the dropdown next to Num. of Bands to change how many there are.
  5. Click the dropdown next to Theme to use a preset, or change the colors individual next to each band.

The number of bands, values, and colors are shared between the schedule rating, the cost rating, and the combined rating.

Tip

It is generally recommended to use a similar number of rating thresholds as probability and impact thresholds; however, there may be times when different levels of detail are desired.

Combined Weighting Factor

Risks with both a schedule rating and cost rating will get a combined rating, which defaults to the average. To give more or less weight to the schedule rating, adjust the input next to Schedule Factor at the top of the Qualitative Thresholds window. The weight next to cost will increase or decrease accordingly. A column for Combined Rating can be displayed in the risk register. For details on customizing columns, see Interface Tour.

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 Glossary

Impact (Qualitative): the degree to which the risk could affect activity durations. This is only used for qualitative purposes and has no role in the actual simulation.

Opportunity: a condition or situation that is favorable to the project, often having a positive impact or effect on duration.

Probability (Qualitative): the chance that a risk could occur. This is only used for qualitative purposes and has no role in the actual simulation.

Probability/Impact Matrix: a grid for defining the probability and impact thresholds (e.g. L, M, H) used for ranking risks in the risk register.

Risk Rating: the product of the probability with the impact, mapped from 0-100, to prioritize risks in the risk register.

Risk Register: an index of all possible threats and opportunities that may impact the schedule, along with their qualitative characteristics.

Simulation: a collection of one or more iterations taken together to represent or model a series of outcomes.

Threat: a condition or situation that is unfavorable to the project, often having a negative impact or effect on duration.