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What Is the Main Purpose of a Probability-Impact Matrix in Project Risk Prioritization?
Discover the primary purpose of the probability-impact matrix: prioritizing project risks by likelihood and impact to focus resources on high-priority threats and opportunities.
Question
A project team is assessing risks for an upcoming software development project. They decide to use a probability-impact matrix to rank the identified risks based on their likelihood of occurrence and potential impact on the project’s objectives. What is the primary purpose of using a probability-impact matrix in risk management?
A. To prioritize risks based on their likelihood and impact on project objectives
B. To assess the cost of each risk
C. To eliminate all identified risks
Answer
A. To prioritize risks based on their likelihood and impact on project objectives
Explanation
The primary purpose of a probability-impact matrix in risk management is to provide a visual, qualitative tool that categorizes and ranks risks by plotting their assessed probability of occurrence against their potential impact on key project objectives like scope, schedule, cost, or quality. This prioritization enables project teams to focus limited resources and response efforts on high-priority (high probability/high impact) risks first, while deprioritizing low-concern risks, rather than treating all risks equally or attempting the impossible task of eliminating them entirely (Option C) or conducting detailed cost analysis better suited to quantitative methods (Option B).