EMV Calculator
Calculate Expected Monetary Value for risk analysis and project management
Risk Assessment
Risk 1
Likelihood of occurrence (0-100%)
Financial impact (negative = cost, positive = savings)
EMV Analysis Results
Risk Portfolio
Financial Impact
EMV Formula Used
EMV = Probability × Impact
Total EMV = Sum of all individual risk EMVs
Negative EMV = Threats (costs), Positive EMV = Opportunities (savings)
Risk Management Recommendations
Example: Pizza Party Risk Analysis
Project Scenario
Project: Pizza party planning on a tight budget
Objective: Determine contingency reserve needed
Identified Risks: 3 main risks affecting budget
| Risk | Probability | Impact | EMV |
|---|---|---|---|
| More people than expected | 30% | -$300 | -$90 |
| Photo booth failure & refund | 10% | +$100 | +$10 |
| Fewer people, return drinks | 15% | +$120 | +$18 |
| Total EMV | - | - | -$62 |
EMV Analysis Result
Contingency Reserve Needed: $62
Interpretation: Net threat to budget
Recommendation: Add $62 to budget as contingency reserve
Risk Portfolio: 1 threat, 2 opportunities
EMV Calculation Formulas
Individual Risk EMV
Formula:
EMV = (Probability ÷ 100) × Impact
Use when: Calculating single risk value
Total Project EMV
Formula:
Total EMV = Σ(Individual EMVs)
Use when: Determining contingency reserve
Probability
Range: 0% to 100%
Definition: Likelihood of risk occurrence
Source: Historical data, expert opinion
Impact
Negative: Threats (costs)
Positive: Opportunities (savings)
Unit: Monetary value ($)
What is EMV?
Expected Monetary Value
Average outcome of uncertain events in monetary terms
Risk Analysis Tool
Quantifies project risks for better decision-making
Contingency Planning
Determines budget reserves needed for uncertainties
Types of Risks
Threats (Negative Impact)
Opportunities (Positive Impact)
EMV Best Practices
Data Quality
Use historical data when available
Involve subject matter experts
Document assumptions and sources
Review and update regularly
Implementation Tips
Start with high-impact risks
Include both threats and opportunities
Consider correlation between risks
Use for decision comparison
Understanding Expected Monetary Value (EMV)
What is EMV?
Expected Monetary Value (EMV) is a project management metric used in risk analysis for determining the overall contingency reserve required for a project plan. It quantifies the average outcome of uncertain events in monetary terms.
Why Use EMV?
- •Quantifies Risk: Converts uncertainties into monetary values
- •Budget Planning: Determines contingency reserve needs
- •Decision Support: Helps choose between alternatives
- •Objective Analysis: Reduces subjective risk assessment
EMV Process
Step 1: Identify Risks
List all potential risks (threats and opportunities) that could impact the project.
Step 2: Assess Probability
Determine the likelihood of each risk occurring (0-100%).
Step 3: Estimate Impact
Calculate the financial impact if the risk occurs (positive or negative).
Step 4: Calculate EMV
Multiply probability by impact for each risk and sum all EMVs.
Remember: EMV provides an average expected outcome. The actual result may differ significantly from the EMV value.