Risk Thresholds Overview

Risk thresholds are scales that you define for rating risks in terms of likelihood, cost impact, schedule impact, and any custom impacts you want to define. Each scale comprises a range of values used to delineate different levels of risk that may face the project or program. The risk thresholds are the inputs used to create a risk matrix, the scoring mechanism used to compute risk scores for identified project or program risks.

The risk thresholds that are necessary for a risk matrix are:

• Probability: The likelihood of a risk occurring.
• Schedule: The amount of time the risk will increase or decrease the project or program schedule, defined as either a percentage of the project's planned duration or as a project or program duration value. Programs do not support relative thresholds, which use percentage values.
• Cost: The cost impact if a risk occurs, defined as either a percentage of the project's planned cost or as a monetary value for the project or program. Programs do not support relative thresholds, which use percentage values.
• User-defined: Any optional user-defined impacts configured for your workspace, such as safety or environmental impacts. User-defined thresholds use text, rather than quantitative values, to define the impact of the risk.