Discussion of Monte Carlo Simulation for Final Project

Ashley Twyman

Case: Film Prioritization page 49 - 53

1. What can a Monte Carlo simulation do for your project?

A Monte Carlo simulation would definitely be a wonderful additive for this project. It would assist in weeding out films with low return on investments, and help to show the probability of what films would be more profitable to the company. The ROI was given the largest percentage of weight of importance when determining which films should be released in a year. A Monte Carlo would also be helpful with some of the films involved because of unpredictability of weather. Outdoor shooting is required for a few of the proposed films, like Heidi, The Year of the Echo, and Nadia!. Some of them are shot in different countries with different weather patterns than what we are familiar with. If a Monte Carlo could be done including the amount of good weather vs. bad weather days of the past in that location, an estimate could be done on how much it may cost the company to be over there vs creating the environment in house on a lot. Another idea for a Monte Carlo simulation I had was for each film implementing one that evaluated how versatile the film would be in the current market place, considering average age of person whom the film would mainly target, how the economy is doing and if people really have the extra funds to take the family to a movie and so on. They could be endless for this project!

2. What are the important variables in your project?

The most important variables in my project would be the percent of return on investment, if the film is a low budget or large budget out of pocket expense and if the film could create more income revenue from it’s creation, i.e. a television show and other marketable products like stuffed animals, tee shirts, action figures, dolls, ect that would increase the amount of money made off the film.

3. What are the potential options (either in time or money) of each variable? 

Both time and money are huge issues in this project. In the film industry time equals money, and lots of it. One set back can cost the company millions of dollars.

4. How sensitive are minor changes in the variables to the total revenue (or time) of the project?

Minor changes in the variables in this project could prove to be devastating. If filming is behind schedule or key personal needed for creation of the film are not available or too expensive. Some of the film could even depend on the weather for shooting and remaining on time in the schedule for the entire project.

5. How can you as a manager use this information to more effectively guide your project?

Many Monte Carlo simulations could be done for all different aspects of this project as previously discussed. All this information could be extremely helpful in deciding which proposed films should be released and in what order they should be released within a year’s time.