at .10. The risk score is calculated by multiplying the probability times the impact—in this case, resulting in a score of .09.
The scores within the probability-impact matrix can be referenced against the performing organization's policies for risk reaction. Based on the risk score, the performing organization can place the risk in differing categories to guide risk reaction. There are three common categories, based on an "RAG (Red, Amber, Green) Rating" risk score:
• Red condition High risk; these risk scores are high in impact and probability.
• Amber condition (also called yellow condition) These risks are somewhat high in impact and probability.
• Green condition Risks with a green label are generally fairly low in impact, probability, or both.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.