I. Overview of EMV methods
1.EMV method is a method to quantitatively evaluate and manage risks by calculating the "expected monetary value" in various situations.
The core of 2.2. EMV method decomposes the project risk into many possibilities, and gives each possibility a corresponding weight of "probability" and "impact", thus obtaining "expected monetary value".
Second, the steps of EMV method
1. Determine all potential risks of the project, including the probability of risk occurrence and expected loss;
2. Establish a risk model and list all possible outcomes, the probability of each outcome and its monetary value;
3. Calculate the expected monetary value of each result, that is, multiply the occurrence probability of the result by the corresponding monetary value;
4. According to the expected risk value, formulate corresponding risk coping strategies, including avoiding risks, mitigating risks and transferring risks.
Third, the advantages and disadvantages of EMV method
1.EMV method can make managers understand project risks more rationally and make plans and schemes based on this understanding, thus improving the possibility of project success;
2.EMV method needs to calculate the possible economic impact value of each risk, which has a large amount of calculation and complicated data analysis, and it is difficult to deal with uncertain factors.
Fourth, expand applications.
1.EMV method can also be used for risk management in other fields, such as finance and insurance.
2. By using modern management ideas and technical means, combining EMV method with practical application scenarios and business requirements can promote more scientific and accurate risk assessment and response.
The above is a detailed introduction to EMV project management methods. It is very important for the project manager to understand and master the EMV method, to be able to cope with various potential risks in the process of project completion, and to ensure that the project can be completed on time and with good quality.