Portfolio Evaluation Tools
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A risk matrix is an effective and broadly used risk assessment tool. It is quite quick to create, and it is an easy way to identify problems. In some cases, it is also used to rank the risks to understand which one needs to be addressed first. Therefore, this tool has mainly two application: | A risk matrix is an effective and broadly used risk assessment tool. It is quite quick to create, and it is an easy way to identify problems. In some cases, it is also used to rank the risks to understand which one needs to be addressed first. Therefore, this tool has mainly two application: | ||
* Decision making regarding the acceptance of risk | * Decision making regarding the acceptance of risk | ||
| − | * Prioritize which risk needs to be addressed first. | + | * Prioritize which risk needs to be addressed first <ref name=''Priority''> ''link/title'' </http://apppm.man.dtu.dk/index.php/Risk_matrix#cite>. |
The matrix has two dimensions, the severity that indicates the extent of damages of the risk and the probability that shows how likely is that risk to happen. A combination of them will allow to collocate a risk inside the matrix. | The matrix has two dimensions, the severity that indicates the extent of damages of the risk and the probability that shows how likely is that risk to happen. A combination of them will allow to collocate a risk inside the matrix. | ||
As it can be seen in the figure, three different areas can be isolated: | As it can be seen in the figure, three different areas can be isolated: | ||
Revision as of 14:55, 7 March 2020
Risk Matrix
A risk matrix is an effective and broadly used risk assessment tool. It is quite quick to create, and it is an easy way to identify problems. In some cases, it is also used to rank the risks to understand which one needs to be addressed first. Therefore, this tool has mainly two application:
- Decision making regarding the acceptance of risk
- Prioritize which risk needs to be addressed first [1]
Cite error:
<ref> tags exist, but no <references/> tag was found
