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Patrick Weaver's Blog – April 2014 Archive (1)

Risks don’t add up

The way PMI deals with risk in the PMBOK® Guide is simplistic. Calculating the effect of one risk using the suggested probability x severity calculation provides one value.  For example, if there is an 20% probability an estimate is under valued by $50,000 the Expected Monetary Value (EMV) for this event will be:

  -$50,000 x 0.2 = -$10,000   it is simple but its not a lot of use in the real world.

The first problem is the under-estimated value is not known and would be…

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Added by Patrick Weaver on April 13, 2014 at 3:09am — No Comments

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