What process is used for determining acceptable risk levels?

The process of determining acceptable risk levels is best captured in the context of performing qualitative risk analysis. During this phase, the project team assesses the identified risks based on their likelihood of occurrence and potential impact on project objectives.

Qualitative risk analysis helps prioritize risks for further analysis or action, which is fundamental in understanding what levels of risk are deemed acceptable for the project. By evaluating the effects that identified risks might have, teams can develop strategies to manage them effectively while aligning with the organization's risk tolerance levels.

This differentiation between acceptable and unacceptable risks allows project managers to make informed decisions regarding risk responses and to focus resources on the most significant threats. Thus, this process plays a vital role in strategic planning and risk management throughout the lifecycle of a project.