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Using Monte Carlo Simulation to Hedge Against Volatile Oil Prices
The escalation of Russian’s invasion of Ukraine and the ongoing response to the COVID-19 pandemic contributed to crude oil price volatility and a surge to over $130 a barrel in the spring of 2022. These high price levels, which have not been seen since 2008, occurred just two years after hitting an all-time low early in the pandemic and going ...
Cost Estimating: Triangular vs PERT
Continuing with this series of articles introducing cost estimation with @RISK, we will compare the use of the most popular distributions of this technique: the Triangular and the PERT.
We know that cost estimation is one of the most critical parts of project management. In addition, we know that three-point estimation – with PERT or ...
Announcing ScheduleRiskAnalysis for the DecisionTools Suite!
Manage uncertainty in project schedules like never before with Monte Carlo simulation. Perform risk analysis on Primavera P6 or Microsoft Project models in the @RISK for Excel environment. Answer questions like “Will this project finish on time?” or “Will we be within budget?”.
Using Monte Carlo Simulation to Hedge Against Volatile Exchange Rates
The US dollar is at its highest level since 2000, up more than 20 percent over other major currencies such as the British pound, the euro, and the yen. The current economic forecast is for more volatility in 2023, which tends to drive further demand for the dollar, seen as a safe harbor investment during periods of uncertainty. However, as ...
Basic Cost Engineering with @RISK
This article offers a simple and concise explanation of the Monte Carlo simulation: a technique that combines statistical concepts (random sampling) with the ability of computers to generate pseudo-random numbers and automate calculations.
The key to Monte Carlo simulation is to create a mathematical model of the system, process, or ...
Bolster Your FIFA World Cup Bracket with @RISK
The 2022 FIFA World Cup is right around the corner and the tournament predictions are pouring in. While checking team rankings and relying on gut instinct might be the classic approach to choosing your champion, risk analysis software is changing the game by helping to quantitatively predict match outcomes.
“The outcomes of many decisions ...
Why Analyzing Suboptimal Decisions is Important
A Purchasing Strategy Example
Palisade’s PrecisionTree software allows you to analyze the probabilities of different outcomes, and their impacts, in sequential, multi-stage decisions. The decision trees in PrecisionTree show the probabilities of these outcomes assuming that the optimal decisions are made at each of the decision nodes ...
Identifying Profitable Housing Development Opportunities with Risk Analysis
Real estate investment opportunities come in all shapes and sizes – from new developments that traditionally provide reliable, predictable income, to troubled properties that could have significant financial potential if developed and managed properly. The key to success with these opportunities – particularly when dealing with dilapidated ...
Monte Carlo Simulation as a Force for Good
Many who have been exposed to Monte Carlo simulation learned about it in the context of financial modeling such as asset management, cash flow analysis, or actuarial study. And that’s with good reason: The applications of Monte Carlo simulation for giving valuable insights into areas of financial uncertainty are limitless.
Improving Legal Case Outcomes with @RISK and PrecisionTree, Part IV
A common first step in litigation strategy is to calculate the case’s settlement value. As discussed in our past legal blog series, settlement calculations can quickly become inundated with countless variables and uncertainties. These legal uncertainties raise questions about estimating damages, a crucial step in the value calculation.
Improving Legal Case Outcomes with @RISK and PrecisionTree, Part III
Previously we discussed the importance of crafting decision trees in litigation strategy and why patent litigation is an expensive, time-consuming process. In part three, we will be focusing on how to leverage Palisade’s @RISK software to overcome decision analysis challenges and calculate probabilities of all possible scenarios occurring to determine fair market value of intellectual property (IP).
Improving Legal Case Outcomes with @RISK and PrecisionTree, Part ll
To lay the groundwork for swift settlements, many legal firms use PrecisionTree software to map out all possible routes a litigation path can take by building quantitative, probabilistic decision trees that calculate case outcomes along the way. This decision-making software can calculate for risks and rewards, forecast case budgets, identify key investigation areas, and create impartial, realistic models to cut down on time and costs.