@RISK Quick Tips: RiskSimtable to Perform Multiple Simulations

@RISK’s use of Monte Carlo simulation allows for powerful features, like RiskSimtable.

The RiskSimtable feature can be used to run multiple simulations to test the sensitivity of the risk analysis model, for example to changes in the parameters of a distribution. This model is of a business with a base case expected revenue of 100 and cost of 80, giving a profit of 20.

The risk model assumes that the revenue and cost distributions are determined from a mean and standard deviation. The RiskSimtable feature is used to test the sensitivity of the distribution of profit to changes in the standard deviation of the revenues. Three values are tested of which the first is our original @RISK model. The number of simulations is therefore set at 3. A RiskSimtable can be set up either by directly typing in the required format, or by inserting it as for other Excel functions via the Insert Function menu option. The model also uses some @RISK statistical analysis functions to report the probability for each simulation that the profit exceeds 50.

» Download the example: BasicBusiness.Simtable.xls

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