Some Uses of Decision Support Software

Risk and decision analysis software: The DecisionTools SuiteWhen
considering decision-making under uncertainty, one may need to evaluate
which of several decision possibilities to select, and then conduct a
detailed risk analysis of that decision. Palisade Corporation’s Decision support
software (such as the PrecisionTree decision tree software and the
@RISK Monte Carlo simulation software) can be used in a wide range of
decision analysis contexts to support the selection and detailed
analysis in these situations. In addition, one may need to calibrate
models or explore and analyse existing data sets, and the statistics
software StatTools can facilitate certain forms of statistical analysis
that may not be possible when using Excel statistics functionality.
(Palisade’s DecisionTools Suite also contains other software products,
including RISKOptimizer and Evolver to deal with optimisation problems,
the neural network software NeuralTools, and TopRank to support model
auditing and sensitivity analysis).

Frequent
applications of the DecisionTools Suite include cost estimation
(project cost estimation, construction cost estimation, cost budgeting
and contingency planning), discounted cash flow analysis and financial
forecasting, risk registers (event risk modelling and operational
risk), options valuation and real options analysis, Six Sigma analysis,
product strategy, environmental risk analysis, veterinary risk
assessments, operations management, retirement planning and so on.
Indeed, the range and flexibility of the DecisionTools Suite means that
the number of applications is vast, and really only limited by a user’s
ability to appropriately formulate their own situation in a way that is
suitable for quantitative analysis.

Whilst
the software can be used essentially in applications in all industries
and functions, the oil and gas sector is a very active one. The
increasing cost of discovery and recovery of oil from more remote and
hostile environments means that an effective resource allocation and a
rigorous decision evaluation are key to business success in these
contexts. Decision tree software and Monte Carlo simulation software
are therefore widely used in exploration and production (e.g. seismic
testing decisions, reserves estimation, and production forecasting
using exponential decline curves or other methods) and for other
aspects of risk assessment for large projects.

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