What is the formula used to calculate the rating in a probability and impact matrix?

The formula used to calculate the rating in a probability and impact matrix is the multiplication of probability and impact. This approach provides a quantitative assessment of risk by incorporating both the likelihood of an event occurring and the potential consequences of that event. By multiplying these two factors, you obtain a single value that reflects the overall risk level associated with the identified risk.

This method allows project managers to prioritize risks and allocate resources effectively. A higher value indicates a more significant risk, prompting the need for immediate attention or mitigation strategies. Conversely, a lower value suggests that the risk may be more manageable or worth monitoring.

This framework enables teams to clearly visualize and prioritize risks based on their potential impact on project objectives, guiding decision-making processes in risk management.