Risk Assessment and Allocation for Highway Construction Management

Risk Management Matrix - High Probability, High Impact

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Figure 9. Chart of the risk assessment process. Along the x-axis are letters corresponding to the level of consequence on schedule and/or cost: a is minimal or no impact on schedule and/or cost; b is additional resources required but able to meet schedule and/or less than 5 percent cost impact; c is a minor slip in key milestones and not able to meet need date and/or 5-to-7 percent cost impact; d is a major slip in a key milestone or a critical path impacted and/or 7-to-10 percent cost impact; and e is cannot achieve key team or major program milestone and/or greater than 10 percent cost impact. Along the y-axis are letters corresponding to likelihood: A is remote, B is unlikely, C is likely, D is highly likely, and E is near certainty. Low risks, those with minimum impact and requiring minimum oversight to ensure risk remains low, are located on the lower left side of the matrix and include A-a, A-b, A-c, A-d, B-a, B-b, B-c, C-a, C-b, and D-a. Moderate risks, those causing some disruption and perhaps requiring different approaches and additional management attention create a diagonal line through the matrix, from the top left corner, to the lower right, and include A-e, B-d, B-e, C-c, C-d, D-b, D-c, E-a, and E-b. High risks, unacceptable risks causing major disruption and requiring a different approach and priority management attention, account for the upper right corner of the matrix and include C-e, D-d, D-e, E-c, E-d, and E-e.

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