Assigned risk ratings are primarily based upon what criteria?

Assigned risk ratings reflect a systematic approach to evaluating potential risks within a project or organization, primarily focusing on the probability of a risk occurring and the impact that risk would have if it does materialize. This methodology allows organizations to prioritize risks based on quantitative and qualitative assessments, enabling effective resource allocation and response strategies.

The process of risk probability and impact assessment involves identifying risks, estimating their likelihood of affecting project objectives, and evaluating the consequences of their occurrence. By engaging in this assessment, teams can create a structured framework that helps in determining which risks require more immediate attention or mitigation strategies, thereby aiding in the overall risk management process.

In contrast, root cause analysis is more focused on identifying the underlying reasons for why risks or incidents occur rather than evaluating the risk levels themselves. Expert judgment, while important in risk assessment, typically serves to supplement data rather than serve as the primary assessment criterion for assigning risk ratings. Finally, considering revised stakeholders' tolerances pertains to adjustments made in response to changing perspectives, but these do not fundamentally determine the initial risk ratings assigned based on probability and impact.