Answer to Question #193641 in Management for okanna

Question

Discuss expected monetary value analysis (EMV) as applied in project management.  (10)     

Answer 1

Discuss expected monetary value analysis (EMV) as applied in project management.  (10)

Expected Monetary Value is used as a statistical tool in the management of risks, quantification of risks, and calculation of contingency reserve. It is utilized to calculate the results of future occurrences that may or may not happen. If there are many risks, the manager adds the EMV's of all risks, which are the expected monetary value of the project (Walke et al., 2011). These risks include both negative and positive risks. EMV offers an average outcome of uncertain events identified; it assists in the calculation of the contingency reserve and helps in the selection of the best alternative in the decision tree analysis. It also only requires expert opinion rather than costly resources and assists project managers in buying decisions during the procedure of procurement.

 

 

 

References

Walke, R. C., Topkar, V. M., & Matekar, N. U. (2011). An Approach to risk quantification in construction projects using EMV analysis. International Journal of Engineering Science and Technology, 3(9), 6847-6855. https://www.idc-online.com/technical_references/pdfs/civil_engineering/An%20Approach.pdf</span>