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Team study of @riskTeam study of @riskTeam members: Xufeng Huangli ShengleiZhouhang Yuyueshen Yangyemin

Contents

Introductions of @risk1

Case study（ how to define input

variables & explain ouput results ）

2

reviewreview3

Introductions of @risk

@RISK Shows You Many Possible Outcomes

@RISK uses Monte Carlo simulation to show you many possible outcomes in your Microsoft Excel spreadsheet  – and tells you how likely they are to occur. This means that you finally have, if not perfect information, the most complete picture possible. You can judge which risks to take and which ones to avoid.  @RISK can help you choose the best strategy based on the available information.

The power of Monte Carlo simulation lies in the picture of possible outcomes it creates. Simply by running a simulation, @RISK takes your spreadsheet model from representing just one possible outcome to representing thousands. With @RISK, you can answer questions like, “What is the probability of profit exceeding $10,000,000?” or “What are the chances of losing money on this venture?”

Introductions of @risk

Function Define Uncertainty with Ease

Replace uncertain values in your spreadsheet with @RISK probability distribution functions.

Furthermore, you can use your own historical data and @RISK’s integrated data fitting tool to select the best function and the right parameters.

Introductions of @risk

Present Results with Stunning Graphs

@RISK provides a wide range of graphs for interpreting and presenting your results to others. Histograms and cumulative curves show the probability of different outcomes occurring.

Introductions of @risk

Identify the Most Important factors @RISK provides you with Sensitivity

and Scenario Analyses to determine the critical factors in your models. Use Sensitivity Analysis to rank the distribution functions in your model according to the impact they have on your outputs with Tornado diagram.

Case study

Case study

　 Year 1 2 3 4 5

A

Market Size 1000000 A1*RiskNormal(1.05,0.01)

A2*RiskNormal(1.05,0.01)

A3*RiskNormal(1.05,0.01)

A4*RiskNormal(1.05,0.01)

B

Use per hippo of our drug

RiskTriang(0.2,0.4,0.7)

B1* （ 1-D1*0.2）

B1* （ 1-D2*0.2）

B1* （ 1-D3*0.2）

B1* （ 1-D4*0.2）

C

Competitors (beginning of year)

0 D1+C1 D2+C2 D3+C3 D4+C4

D

Entrants IF(C1<3,RiskBinomial(3-C1,0.4),0)

IF(C2<3,RiskBinomial(3-C2,0.4),0)

IF(C3<3,RiskBinomial(3-C3,0.4),0)

IF(C4<3,RiskBinomial(3-C4,0.4),0)

IF(C5<3,RiskBinomial(3-C5,0.4),0)

EUnit Sales Use per hippo of our drug × Market Size

F Revenues Unit Sales × price

G Costs Unit Sales × Unit Cost

H Profits Revenues － Costs

NPV RiskOutput( ) + NPV(0.1,H1:H5)

Inputs and outputs

NPV formula

simulation

Possible NPV values and possibilitiesPossible NPV values and possibilitiesPossible NPV values and possibilitiesPossible NPV values and possibilities

Market SizeMarket Size

Use per Use per hippo ofhippo of our drugour drug

EntrantsEntrants

Case studyHow to run a simulation:

Case study

Case study

Case study

Case study

Case study

review

Determine the variables/input values

Determine output cell’sCalculating formula

Set simulation andRun simulation

Get results and analyze

Step 1

Step 2

Step 3

Step 4

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