SAB4#119_Level of Risk Acceptance

SAB4#119_Level of Risk Acceptance

1. Is a general, high-level description of the acceptable level of risk. For example, the sponsor is willing to accept little risk to the schedule on this project.

   • Risk Appetites

2. It refers to a measurable amount of acceptable risk. In this case, our sponsor might be said to be willing to accept schedule risk of up 14 days on this project.

   • Tolerance

3. Thresholds

   • Is the specific point at which risk becomes unacceptable. for example, the sponsor will not accept a risk of the schedule being delayed 15 days or longer.

4. Risk appetites, tolerances and thresholds vary depending on the individual or organiztion and the risk area. For example, an organization may have more tolerance for cost-related risks than for risk that affect customer satisfaction or their reputation in the marketplace.

5. Risk areas can include any project constraints (scope, time, cost, quality, etc) as well as reputation, customer satisfaction, and other intangibles