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