Calculating Overall Impact

Overall Impact Levels

While we can characterize a risk in terms of its individual impacts, it is useful to be able to combine all impacts into a single overall impact level. Mandrel calculates the overall impact level of a risk as the highest of the individual weighted impact levels.

Example

Suppose in a product development project we have identified four separate objectives: cost, schedule, product performance and product reliability. Suppose also that we have assigned the following weighting factors:

 Schedule 100% Reliability 90% Performance 80% Cost 60%

Suppose also we have assessed a risk on a 1 to 5 scale for each of these objectives as follows:

 Schedule 2 Reliability 3 Performance 4 Cost 5

The overall impact of the risk is derived as follows.

 Impact Level Weighting Factor Weighted Impact Schedule 2 100% 2.0 Reliability 3 90% 2.7 Performance 4 80% 3.2 Cost 5 60% 3.0

Overall impact level is defined as the highest weighted impact, which in this case is 3.2.