Overview
NovaBridge Corporation, a global engineering and construction firm, has been awarded a $120 million contract to design and build a high-speed rail bridge connecting two major metropolitan areas in the Pacific Northwest. The project, known as SkySpan, is part of a broader government-funded green transportation initiative and is expected to be completed within 24 months. It is one of the company’s most ambitious projects due to complex terrain, environmental compliance requirements, and public visibility. As the project risk analyst, you have been asked to prepare a risk-adjusted cost estimate using Expected Monetary Value (EMV) analysis for a presentation to the executive steering committee.
You and the project team have identified the following six key risks, each with estimated probabilities and financial impacts (costs or savings):
Risk ID | Description | Probability | Impact (USD) | Type |
R1 | Unexpected environmental mitigation requirements (e.g., protected wetlands) | 40% | ($4,000,000) | Threat |
R2 | Delay due to labor union negotiations | 25% | ($2,500,000) | Threat |
R3 | Early completion bonus from government agency | 20% | $3,000,000 | Opportunity |
R4 | Supply chain disruption for steel components | 35% | ($3,800,000) | Threat |
R5 | Reduced cost through vendor consolidation | 30% | $1,500,000 | Opportunity |
R6 | Technology failure in prefabricated beam placement | 10% | ($6,000,000) | Threat |
As part of your risk report to senior management, you must:
Part A: Calculate the EMV for each individual risk.
- Use the formula: EMV = Probability × Impact
- Present your calculations in a table format.
- Indicate which risks are opportunities (positive EMV) and which are threats (negative EMV).
Part B: Determine the total EMV for the project.
- Combine the EMVs of all risk events.
- Based on your result, calculate the risk-adjusted project budget (Original Budget ± Total EMV).
Part C: Interpretation and Strategy
- What does the total EMV indicate about the project’s overall risk exposure?
- Which two risks represent the most significant threat and opportunity, respectively?
- Propose at least two response strategies for each of the top two risks (one threat, one opportunity).
- Should NovaBridge proceed as planned, or revise its budget contingency plan? Justify your answer using your calculations.
Submission: Upload/attach your completed paper to this assignment by the due date.
Useful Videos for the Assignment:
What is Expected Monetary Value? (EMV)