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Beginning With a Qualitative Risk AnalysisAfter conducting a Qualitative Risk Analysis, you’ll have a list of risks with a priority and urgency assigned. By using Expected Monetary Value, you can quantify each risk to determine whether your qualitative analysis is backed by numbers.

Expected Monetary Value is a recommended tool and technique for Quantitative Risk Analysis in Project Risk Management. For the PMP exam, you need to know how to calculate the Expected Monetary Value. Steps to Calculate Expected Monetary Value (EMV)To calculate the Expected Monetary Value in project risk management, you need to:. Assign a probability of occurrence for the risk.

AbeBooks.com: Project Management (Seventh Edition): The book is primarily intended to serve as a Textbook for undergraduate as well as postgraduate students of Management Studies and also for postgraduate students of Construction Management. It covers the syllabus prescribed by most universities/institutes on the.

Assign monetary value of the impact of the risk when it occurs. Multiply Step 1 and Step 2.The value you get after performing Step 3 is the Expected Monetary Value. This value is positive for opportunities (positive risks) and negative for. Project risk management requires you to address both types of project risks. Expected Monetary Value Example for Project Risk ManagementSuppose you are leading a construction project.

Weather, cost of construction material, and labor turmoil are key project risks found in most. Construction projects:. Project Risks 1 – Weather: There is a 25 percent chance of excessive snow fall that’ll delay the construction for two weeks which will, in turn, cost the project $80,000. Project Risks 2 – Cost of Construction Material: There is a 10 percent probability of the price of construction material dropping, which will save the project $100,000.

Project Risks 3 – Labor Turmoil: There is a 5 percent probability of construction coming to a halt if the workers go on strike. The impact would lead to a loss of $150,000. Consider your industry and geographic area to determine whether this risk would have a higher probability.Note: Regardless of the type of project, the do not change. Hence, though this example is from the construction industry, the theory is applicable to other industries, such as software development and manufacturing.Next, let's see how to quantify the project risks by calculating the Expected Monetary Value of each risk. Expected Monetary Value Calculation for Project Risk ManagementIn this Expected Monetary Value example, we have two negative project risks (Weather and Labor Turmoil) and a positive project risks (Cost of Construction Material).

The Expected Monetary Value for the project risks:. Weather: 25/100.

(-$80,000) = – $ 20,000. Cost of Construction Material: 10/100. ($100,000) = $ 10,000. Labor Turmoil: 5/100. (-$150,000) = – $7,500Note: Though the highest impact is caused by the Labor Turmoil project risk, the Expected Monetary Value is the lowest.

This is because the probability of it occurring is very low.This means that if the:. Weather negative project risks occurs, the project loses $20,000,. Cost of Construction Material positive project risks occurs, the project gains $10,000, and. Labor Turmoil negative project risks occurs the project loses $ 7,500. The project’s Expected Monetary Value based on these project risks is:-($20,000) + ($10,000) – ($7,500) = – $17,500Therefore, if all risks occur in the construction project, the project would lose $17,500. In this scenario, the project manager can add $17,500 to the budget to compensate for this. This is a simplistic Expected Monetary Value calculation example.

Another technique used to calculate complex Expected Monetary Value calculations is by conducting Decision Tree Analysis. This analysis helps while making complex project risk management decisions. For more details, read this article on.As a project manager, you may apply different production techniques to minimize risk.

For example, if this example was based on software development or manufacturing, the project manager could use. However, the method for computing Expected Monetary Value during project risk management would not change.

Project Management By K Nagarajan Pdf Converter Online

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Manage projects efficiently with our Task Management softwareEvery day we end up spending most of our time on urgent but low priority tasks and postpone the most important tasks. The Pareto principle of 80/20 rule applies here i.e. 80% of the most important work gets completed if you try to figure out 20% of the high priority tasks. An effective task management software must guide you to find these top 20% of high priority tasks.With Zoho Projects as your task management software, you will spend more time to complete tasks and less time managing it.

Project Management By K Nagarajan Pdf Converter Full

The task management module helps you effectively track key milestones, set dependencies and accomplish tasks thus enhancing your productivity.