Show an example of a risk assessment matrix and explain how it is used in prioritizing risk control measures?
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Mar 7
A risk assessment matrix is a tool used to evaluate and prioritize risks based on their likelihood and potential impact. It typically consists of a grid with likelihood on one axis and impact on the other, with different levels of likelihood and impact assigned numerical values.
For example, a risk assessment matrix may look like this:
| Likelihood/Impact | Low | Medium | High | |-------------------|-----|--------|------| | Low | 1 | 2 | 3 | | Medium | 2 | 4 | 6 | | High | 3 | 6 | 9 |
To use this matrix in prioritizing risk control measures, risks are first assessed and assigned a likelihood and impact rating. These ratings are then multiplied to determine the overall risk score. Risks with higher scores are considered more critical and should be addressed first.
For example, if a risk is assessed as having a high likelihood and high impact, it would be assigned a score of 9. This risk would be prioritized over a risk with a low likelihood and low impact, which would have a score of 1.
By using a risk assessment matrix, organizations can systematically evaluate and prioritize risks, allowing them to focus their resources on addressing the most critical risks first. This helps ensure that risk control measures are implemented effectively and efficiently.