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    Acquisition Risk Management Probability Definitions
    The risk rating is based on the probability of impact and the level of impact (manual mapping approach):

    Probability of Occurrence
    0 - 10% or Very unlikely to occur
    11 - 40% or Unlikely to occur
    41 - 60% or May occur about half of the time
    61 - 90% or Likely to occur
    91 - 100% or Very likely to occur

    The probability is a single percentage number and does not have to be exact as long as the group applies a consistent approach to estimating the probabilities for all the risks.

    Make sure everyone is in agreement before moving on or get a decision from the program manager.

    Reference: Risk Matrix User's Guide, Version 2.2, by Pamela E. Engert and Zachary F. Lansdowne, Mitre Document MP99B0000029, November 1999, The MITRE Corporation

    Operational Risk Management Probability Definitions

    • Frequent - Occurs often in career/equipment service life. Everyone exposed. Continuously experienced.

    • Likely - Occurs several times in career/equipment service life. All members exposed. Occurs frequently.

    • Occasional - Occurs sometime in career/equipment service life. All members exposed. Occurs sporadically, or several times in inventory/service life.

    • Seldom - Possible to occur in career/equipment service life. All members exposed. Remote chance of occurrence; expected to occur sometime in inventory service life

    • Unlikely - Can assume will not occur in career/equipment service life. All members exposed. Possible, but improbable; occurs only very rarely.

    Reference: Pocket Guide to Operational Risk Management

    Other Risk Management Probability Definitions
    The associated risk event represents a future event that may occur. When we assess the probability a risk may occur, we are technically assessing a conditional probability; that is,

    0 < Prob (A|B) < 1

    where, A is the Associated Risk Event and B is the Condition Present. The following table provides a guide for assessing risk event probabilities.

    Risk Event Probability Interpretation Rating
    > 0 - <= 0.05 Extremely sure not to occur Low
    > 0.05 - <= 0.15 Almost sure not to occur Low
    > 0.15 - <= 0.25 Not likely to occur Low
    > 0.25 - <= 0.35 Not very likely to occur Low
    > 0.35 - <= 0.45 Somewhat less than an even chance Medium
    > 0.45 - <= 0.55 An even chance to occur Medium
    > 0.55 - <= 0.65 Somewhat greater than an even chance Medium
    > 0.65 - <= 0.75 Likely to occur High
    > 0.75 - <= 0.85 Very likely to occur High
    > 0.85 - <= 0.95 Almost sure to occur High
    > 0.95 - < 1 Extremely sure to occur High

    A risk event that is certain not to occur has, by definition, probability equal to zero. In this case, we say the risk event does not exist. The table above does not assign a categorical rating (i.e., High, Medium, or Low) to a risk event that is certain not to occur. A risk event that is certain to occur has, by definition, probability equal to one. In this case, we say the event is no longer a risk; on the IS upgrade, it is considered an issue that presently exists on the project. The above table does not assign a categorical rating (i.e., High, Medium, or Low) to a risk event that is certain to occur.

    Reference: Garvey, Paul R., "Implementing a Risk Management Process for a Large Scale Information System Upgrade - A Case Study", INCOSE Insight, May 2001, p.5.



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    Last modified: Wednesday, April 2, 2003