DAVION

SYSTEMS

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.