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Dave Bristol, Eastern Region Sales Manager
800-432-7475 x333, [email protected]
http://www.palisade.com
Palisade CorporationPalisade Corporation
Risk modeling and analysis in ExcelRisk modeling and analysis in Excel
Agenda
Palisade Corporation Overview
What is risk?
Using Excel modeling to better understand how risk impacts our work
Palisade CorporationPalisade Corporation
Continuity and longevity:Continuity and longevity:
Palisade Corporation is now in its 28th year as a provider of general purpose quantitative decision-making tools and services, boasting the same core development team since the initial release of @RISK:
World Headquarters: Ithaca, New York
Palisade Europe: London, England
Palisade Asia-Pacific: Sydney, Australia
Palisade LTA: Rio de Janeiro, Brazil
Palisade Japan: Tokyo, Japan
Sales, Marketing, Training/Consulting, and Ops/Fulfillment also have team members with 10+ years service time.
Palisade is proud to be employee owned.
Palisade Corporation - EducationPalisade Corporation - EducationSolid Academic Backing:Solid Academic Backing:
Palisade products are used in curriculums at more than 100 MBAMBA programsprograms worldwide, as well as in thousands of other academic fields at the undergraduate and postgraduate levels.
Palisade software is the featured Monte Carlo simulation product in dozens of academic textbooksacademic textbooks.
Allied with professional development organizations:Allied with professional development organizations:
Palisade is accredited as a PMI R.E.PPMI R.E.P. or Project Management institute Registered Education Provider.
Palisade is registered with the National Association of State National Association of State Boards of Accountancy (NASBA)Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors.
Other alliances available as needed.
Thousands of companies worldwide in all Thousands of companies worldwide in all areas of business and industry, including a areas of business and industry, including a majority of Fortune 500 companies - majority of Fortune 500 companies - amounting to hundreds of thousands of amounting to hundreds of thousands of users, make productive use of Palisade users, make productive use of Palisade software every day.software every day.
Vague term used in many ways by many people
In modeling, it can be positive (opportunity)
Uncertainty (estimate accuracy)Variability (random or quasi-random)
Likelihood of occurrence, size of impact
Everybody knows about them!
Common “most likely” estimates are hedged
Software allows us to incorporate ranges into modeling
What is risk, exactly?What is risk, exactly?
Everywhere! (It’s a multi-tool, not a hammer)
InvestmentRetirementCurrency/options/VAR/DCF/etc.
InsuranceLosses/premium pricing/choosing a plan
EnergyFutures pricingProduction capacity consumption projection
ManufacturingEquipment lifecycleInventory Management
Pharma/Health CareR&DDisease transmission and response planning
people
Where do we find risks to model?Where do we find risks to model?
Integrated risk and decision analytics
All products add-in to Excel & include XDK
@RISK – Simulation
RISKOptimizer and Evolver – Optimization
PrecisionTree – Decision Tree analysis
NeuralTools – Neural network prediction
StatTools – Statistical analytics
TopRank – Sensitivity Analysis
DecisionTools SuiteDecisionTools Suite
The relative likelihood of all possible outcomes to your model.
The impact of variation within uncertain inputs has on the outcomes of your model.
A breakdown of the key drivers in your model:
What pushes profits forward? What leads to losses?
A better understanding of where to focus your mitigation resources.
Clear, user-friendly graphs and reports to communicate findings to decision makers regardless of statistical savvy.
@RISK combines Monte Carlo Simulation with other statistical techniques to give you:
Included with @RISK Industrial and DecisionTools Suite Industrial
Combines @RISK’s Monte Carlo simulation with genetic-algorithm based optimization
Allows for optimization of aspects of a distributed objective and solving of complex non-linear models
More robust than a deterministic optimization
Customers originally combined @RISK and Excel’s Solver for stochastic optimization
RISKOptimizer - FunctionalityRISKOptimizer - Functionality
Portfolio optimization and allocation
Project selection
Capacity planning and production optimization
Scheduling (job shop, manpower)
Bidding
Inventory management
Prototyping/component interaction
RISKOptimizer - ApplicationsRISKOptimizer - Applications
Decision trees can be built directly in Excel
Allows for large-scale options models to be built over underlying models
Evaluate tree by standard tree calc, objective function, worksheet calc, macro, etc.
Can be combined with @RISK for stochastic decision tree analysis
Customers originally combined @RISK and DPL/DATA
PrecisionTree - FunctionalityPrecisionTree - Functionality
Real Options
Exploration/Production
Game theory
Structural integrity planning
Resource management
Classification/evaluation
Diagnosis/treatment
PrecisionTree - ApplicationsPrecisionTree - Applications
Palisade’s first product to truly meld qualitative and quantitative analysis via Neural networks
Offers multiple neural network types and “BestNet” search to determine best network
Requires no neural network expertise
Verifies it’s own results with instant LiveUpdates
Analyze categorical data in concert with statistics
LiveUpdate works with RISKOptimizer to find optimal answers to questions based on your network
NeuralTools - FunctionalityNeuralTools - Functionality
Credit scoring/loan underwriting
Market pricing/prediction (energy, etc.)
Environmental analysis
Fraud notification
Counter-terrorism
Medical diagnosis/treatment
Drug efficacy
NeuralTools - ApplicationsNeuralTools - Applications
Collection of statistical processes in Excel for data analysis without leaving the spreadsheet
Forecasting & Regression ANOVA/Correlation/covariance Non-parametric tests Much more
Replaces statistical processes identified by our clients as unstable or inaccurate in Excel
Supports up to 16 million data points/variable
Created Excel 2007 before 2007 existed!
XDK for custom function creation
StatToolsStatTools
Utility for sensitivity analysis in Excel
Determine which model inputs drive volatility
Can be used on *any* Excel model
Cut down on model-building time by identifying the factors that require distributions for simulation
Risk analysis and mitigation in moments – as well as elimination of supposed risks
TopRankTopRank
Simulation modeling in MS Project
Add uncertainty to: Tasks Durations Calendars Resources . . . anywhere in Project
Risk-adjusted Gantt chart w/criticality and cruciality
@RISK6 will blend @RISK for Excel and @RISK for Project into a single unified application for cost/schedule risk analysis.
@RISK for Project@RISK for Project
Questions?Questions?
Dave BristolDave Bristol
[email protected]@palisade.com
802-876-7906802-876-7906
