RISK5002 Chap.4 Risk Matrices and Tornado Diagrams
Risk Matrices and Tornado Diagrams
A consequence and likelihood matrix ranks risks quickly by placing them on two customised scales and reading a priority and decision rule from the cell. This chapter shows how to write those scales so they connect to objectives, how to attach priority ratings and colours, and how weighting towards consequence, likelihood or neither changes the result.
Complete scales for a swimming centre illustrate what a past exam meant by defining all aspects of a matrix. The limitations are treated as traps: subjective and manipulable ratings, no aggregation, a single consequence value and no direct link to objectives. Tornado diagrams answer that last weakness, and a campervan revenue example shows how to compute and rank one-at-a-time swings.
The worked material uses a swimming centre and a campervan hire firm so that the scales, the arithmetic and the interpretation are all visible. You will see why a frequent minor risk can outrank a rare severe one under a symmetric design, how a weighted design could reverse that order, and why the lecture's festival exercise expects different groups to disagree.
The tornado section then shows how to lay out low, medium and high values, compute each swing and turn the ranking into treatment advice.
What this chapter covers
- 01
Consequence and likelihood scales
- 02
Priority ratings and decision rules
- 03
Symmetric and weighted designs
- 04
Limitations of matrix ratings
- 05
Tornado diagrams and one-at-a-time swings
- 06
Strengths for screening many risks
Worked example · free
Rate two risks on a symmetric five-by-five matrix
- +1Pump failure: consequence b scores 4 and likelihood 2, so 4 x 2 = 8.
- +1A score of 8 falls in the 5 to 9 band, priority III: scheduled treatment and monitoring.
- +1Deck slip: consequence c scores 3 and likelihood 5, so 3 x 5 = 15, priority I.
- +1The frequent slip outranks the rarer pump failure under a symmetric design, so act first on deck surfaces.
Key terms
- Consequence scale
- A ranked set of outcome descriptions tied to the organisation's objectives.
- Priority rating
- A label attached to matrix cells that sets the required management response.
- Base case
- The scenario in which every uncertain factor takes its medium value.
- Swing
- The difference between an outcome's high and low values when one factor moves.
- Decision rule
- An instruction attached to a matrix cell stating the response a rating requires.
Risk Matrices and Tornado Diagrams FAQ
What makes a risk matrix answer complete?
Define a consequence scale tied to objectives, a likelihood scale suited to the risks, the priority rating or decision rule for each cell, and then show one risk being placed and actioned. A coloured grid without written scales leaves most of the marks unearned.
Why can risk matrix ratings be misleading?
Different people often rate the same risk very differently, the scales can be designed to steer results, cells cannot be added together, and one consequence value hides the range of possible outcomes. Results should be treated as screening, not measurement.
How do I build a tornado diagram?
Set every factor at its medium value to get the base case, then move one factor at a time to its low and high values while holding the rest fixed. Each factor's bar spans the two results, and bars are sorted with the widest swing at the top.
When is a risk matrix the right tool?
A matrix suits screening when many risks have been identified, when data are too thin for detailed analysis, or when there is no time for quantitative work. It ranks risks quickly and displays them clearly, and it compares risks with different kinds of consequence. For decisions that depend on a range of outcomes, a tornado diagram or simulation is stronger.
Exam move
Write a three-point and a five-point matrix for two different organisations and rate the same risk on both to see how design changes the answer. For tornado questions, practise laying out a low, medium and high table, writing the revenue formula once, and computing the six scenarios before ranking. Always add treatment suggestions that target the factors management can control.
Finish each matrix answer with one sentence on a limitation that applies to the case, such as subjectivity or the single consequence value, because evaluation of the tool is often where the top marks sit.
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