DecisionTools Suite

On-Demand Webinar: “Introduction to Risk Analysis using @RISK”

Now available in 5 languages: English, Spanish, Portuguese, German, and Chinese

This webinar provides an entry-level introduction into probabilistic analysis, and shows how Monte Carlo simulation and other techniques can be applied to your everyday business analyses. Using Monte Carlo simulation, @RISK analyzes many different scenarios at once, giving you more insight into what could happen. We’ll look at example models including a basic revenues/cost/profits model, an NPV model, and a Cost Estimation model, to give you an idea of how quickly you can get started in probabilistic modeling in Excel. If you build models in Excel, Palisade solutions can help you to make more informed decisions, right from your desktop.

For more than 30 years, Palisade software and solutions have been used to make better decisions. Cost estimation, NPV analysis, operational risk registers, portfolio analysis, insurance loss modeling, reserves estimation, schedule risk analysis, budgeting, sales forecasting, and demand forecasting are just some of the ways in which the tools are applied. This webinar will demonstrate how easy – and necessary – it is to implement quantitative risk analysis in any business.

Watch the webinar in your language:

Introduction to Risk Analysis using @RISK (English)
Introducción al análysis de riesgo con @RISK (Spanish)
Introdução à Análise de Riscos e Decisões Utilizando o @RISK e o DecisionTools Suite (Portuguese)
Einführung zur Risiko- & Entscheidungsanalyse mit @RISK und der DecisionTools Suite (German)
介绍如何使用 @RISK 进行风险分析 (Chinese)

» Download @RISK – try it for yourself!

On-Demand Webinar: “Project and Pipeline Valuation and Optimization with The DecisionTools Suite”

»Watch now: “Project and Pipeline Valuation and Optimization with The DecisionTools Suite”

This introductory webinar explores the basics of project and product valuation within the context of a larger pipeline. Uncertainty relating to cost, escalation over time, and unexpected delays are modeled. Also, we look at the process of release schedule optimization subject to various constraints, including budget, technical feasibility, and resource availability.

For more than 30 years, Palisade software and solutions have been used to make better decisions. Cost estimation, NPV analysis, operational risk registers, portfolio analysis, insurance loss modeling, reserves estimation, schedule risk analysis, budgeting, sales forecasting, and demand forecasting are just some of the ways in which the tools are applied. Our webinars demonstrate how easy – and necessary – it is to implement quantitative risk analysis in any business

We’ll primarily use @RISK and RISKOptimizer, software tools that are part of The DecisionTools Suite.

» Watch “Project and Pipeline Valuation and Optimization with The DecisionTools Suite” now

» Download The DecisionTools Suite – try it for yourself!

@RISK and DecisionTools Suite 7.5 Now Available

The latest version of our popular risk analysis tools, @RISK 7.5 and DecisionTools Suite 7.5 are now available! Version 7.5 offers a range of improvements for any decision maker, from general use enhancements to new, specialized analytical features. New and enhanced graphing options, faster performance, and sophisticated analytics make DecisionTools Suite 7.5 the only decision analysis toolset you’ll ever need.

Read What’s New

Key Features Include:

New and Improved Tornado Graphs In @RISK
Faster Optimization with RISKOptimizer
Over 20 New @RISK Functions
Graphing and Reporting Improvements in @RISK
Optimized for Windows 10 and Excel 2016

Other Important Features:

Run Optimizations During Simulation Without Coding
New StatTools Analyses

Join Us for a Free to Learn More About What’s New In @RISK 7.5 and DecisionTools Suite 7.5!

» Wednesday, July 20th, 1pm EDT (NYC) | 10am PDT (Los Angeles) – Register

» Thursday, July 21st, 10am EDT (NYC) | 3pm BST (London) | 7:30pm IST (Delhi) – Register

» Wednesday, July 27th, 10am AEST (Sydney) – Register

Play Ball! Palisade Software Used in Award-Winning Sports Analytics Research

Clayton Graham being interviewed by Jody Avirgan for FiveThirtyEight, the statistics-minded ESPN website founded by statistician Nate Silver.

Baseball fans, take note: next time you’re looking to place a bet on a game, you may want to use @RISK. That’s what DePaul University professor Clayton Graham did to create his baseball wagering model, presented at the prestigious ninth annual 2015 MIT Sloan Sports Analytics Conference. Dr. Graham’s research submission, “Diamonds on the Line: Profits through Investment Gaming,” topped the “Business of Sports” track and earned third place overall.

In the paper, Dr. Graham discusses how he uses Palisade’s DecisionTools Suite to create a baseball investment model to calculate the probability of winning individual games and the economic consequences of each wager based against each game’s betting line. Additionally, the research sought to determine the optimal bet size, based upon the risk tolerances of the investor.

Creating the model required the following five steps:

Building a predictive function that determined the probability of winning each game
Defining the betting line of each game, which determines the payoff or loss
Establishing an economic relationship between the production function and betting line
Creating a risk-return based investment function compatible with the production model
Quantifying the results model

“Palisade’s DecisionTools Suite was invaluable to the success of this lengthy project, as it quickly and easily computed the myriad statistical scenarios,” said Dr. Graham. “Baseball has a seemingly infinite set of possibilities with each at-bat, and the intricacies of determining what may happen would be impossible to determine manually, with any degree of expediency. DecisionTools Suite is also very easy to use and intuitive because it operates in Microsoft Excel. I can say, without hesitation, that this project would not have been possible without DecisionTools Suite and the technical support Palisade offers.”

Once the model was complete, an initial bankroll of $1,000 was used to place wagers (about two per day) on Major League Baseball games beginning on June 16, 2014 and through the conclusion of the World Series on October 29, 2014. The amount wagered on each game was determined by the analysis, and 75 percent of the time, games didn’t offer enough statistical edge to even warrant a wager. Key results included:

68 percent of wagers resulted in wins,
35 percent return on daily at risk capital,
Initial $1,000 investment grew more than 1,400 percent during the season.

“While this paper is not a typical utilization of DecisionTools Suite, the research clearly shows the power and accuracy of the software, and we are thrilled that our solution played a part in achieving such a prestigious honor,” said Randy Heffernan, Vice President, Palisade. “It is especially gratifying to see Professor Graham’s tireless work being recognized at this level, as he has been a Palisade customer and champion for more than three decades.”

Check out Dr. Graham’s presentation at the Sloan Sports Analytics Conference:

Read the full research paper here.

Read the press release here.

Professor Hooked on @RISK Brings its Benefits to Cal State Monterey Bay

Dr. Sumadhur Shakya, Assistant Professor of Operations Management & Agribusiness at California State University, Monterey Bay (CSUMB), has used @RISK in his own academic research and as a teaching tool in his classes, Operations Management and Supply Chain Management. Indeed, thanks to his championing of the software, 360 students at CSUMB will use @RISK, annually, either in Dr. Shakya’s classes, or in other business courses such as Commodity Trading.

Dr. Shakya says he ‘got hooked’ on Palisade’s software when he was in his Master’s program at North Dakota State University, and later in his Ph.D. at the Upper Great Plains Transportation Institute. He used it to apply a ‘real option model’ for the valuation of random genetic traits, such as drought tolerance, in crop plants to determine their viability at various stages of development. @RISK was useful in accounting for the assorted uncertainties involved in these kinds of prospects, such as the size of the capital investment to develop the traits, rate of adoption post commercialization stage, and expected return to farmers/users in case drought occurs. Through using @RISK’s simulation models, Dr. Shakya’s research concluded that, after a few years of what looked like an out-of-money (financial losses) option, the traits ultimately became profitable after passing the third stage of development, and later during commercialization. “Had it not been for this model I developed via @RISK, most people would not have invested in the development of trait because in the first and second stage of commercialization, the option looked like it was a loss,” says Dr. Shakya.

Now, as a faculty member at CSUMB, Dr. Shakya has advocated for and introduced @RISK to his and other classes, so that students can learn the benefits of quantitative risk analysis in business and operations management. With support of CSUMB, he is in the process of helping to develop a bachelor’s program in AgBusiness that will focus on supply chain management, perishable and non-perishable agricultural commodities, precision agriculture, alternative Ag technology (like vertical farming, genomics, water management etc.) and sustainability, while covering subjects like viticulture and Ag tourism to meet the needs of the Salinas Valley and beyond. It will complement the programs at UC Davis and Cal Poly, San Luis Obispo. This new program will have a rigorous training in using @RISK to evaluate and model uncertainties in crop rotation plans, inventory management, and the dynamics within the perishable commercial agriculture supply chain. “Our plan is to not just @RISK, but also the DecisionTools Suite,” says Dr. Shakya. “Particularly, we would use StatTools.”

If approved, this new Bachelor’s program would be active and running by 2017.

» Read Dr. Shakya’s paper that got him hooked on @RISK
» More about the DecisionTools Suite

Novelis Uses @RISK, PrecisionTree for High Risk R&D Project Valuation

Novelis, the world’s largest aluminum rolling and recycling company, had a clear dilemma: The company had little structure in their process in evaluating the risks associated with projects. According to Dave MacAdam, Senior Manager of Innovation Strategy at Novelis:

“The process was perfunctory and overly reliant on input from the commercial side. While commercial input is necessary, we found more information from the scientific side of the company was needed to accurately assess risk and more integration was needed between those two schools of thought.”

Through working with different stake-holders and experts across Novelis, MacAdam started to introduce quantitative analysis to their R&D process, providing more opportunity to optimize their R&D project portfolio. This change included the implementation of Palisade’s @RISK and the DecisionTools Suite, which introduced a method in which models could be built that incorporated all assumptions from Novelis’s commercial and scientific teams. Through the utilization of the technology, MacAdam was able to accomplish four very critical goals:

Identify all risks that could impede project success
Determine a project’s target rate of return, holding period and predicted success at each stage of the project
Pinpoint a project’s expected success rate
Create distributions that highlight the probability of key project outcomes

MacAdam believes having the appropriate data in an easy-to-understand format makes his job of selling the viability of projects to much easier:

“We’re all making sausage, and no one wants to see how it gets made. The more succinct and clear you make those graphs, the more effective the decision-making process can be.”

To read the full case study, click here.

Making Medicine Count: The DecisionTools Suite Bolsters Efficacy of Humanitarian Programs

Getting life-saving drugs to under-served people in developing countries is a driving goal for many non-profit organizations. However, well-intentioned efforts like these can fall short of their desired impact due to poor understanding of market uncertainty and risks associated with pharmaceutical manufacturing.

Linskbridge, SPC, a consulting firm that advises international development organizations in determining what efforts have the highest impact along with the best value for money spent, recently used @RISK, RISKOptimizer, and PrecisionTree to help determine the best method of introducing a life-saving medicine in developing countries. The process requires analytical forecasting of both demand and supply of the drug, as well as a detailed market analysis. With the aid of Palisade’s DecisionTools Suite software, the consultancy has been able to offer clients sound advice on which ventures have both humanitarian impact and fiscal soundness.

Khatuna Giorgadze, an associate with Linksbridge SPC, was able to take complex data from multiple sources and translate it into clear and comprehensive information. For example, she used @RISK to create a demand forecasting model, which included both static inputs like population data from United Nations Population Division, country census data, and World Health Organization coverage data, as well as probability distributions for highly uncertain inputs that represent a range of possible values. Thus she was better able to predict the demand for a drug or medical treatment in developing countries. She was also able to forecast supply. This step “is even more uncertain than demand,” Giorgadze says, “so we use @RISK to a great extent to assess manufacturing risks and supplier’s plans in the market.” With supply and demand established, Giorgadze then used @RISK, RISKOptimizer, and PrecisionTree to do a thorough market analysis. She then investigated different investment options for the company, determining the potential benefits and risks of each.

All this information was then presented to clients looking to make sound and cost-effective investment and policy decisions to meet public health objectives. Palisade’s products helped make this process all the more efficient and effective. “Palisade’s DecisionTools Suite is a very important component to our work,” says Giorgadze. “Since 2011, it has enabled us to do the required market and investment analysis and make decisions. It’s easy to use, and its compatibility with Excel makes it all the more appealing. We’re very happy with how this software has enhanced our work.”

Read the complete case study here.

Shipping Industry Relies on PrecisionTree, @RISK, to Manage Risks to Crew, Environment, and Property

DNV GL SE , an international organization for ship classification, safety and quality control, uses PrecisionTree and @RISK software (part of the DecisionTools Suite, Palisade’s complete toolkit of risk and decision analysis tools) to determine the risk of an incident occurring to a ship or its systems and the consequences should one occur. This enables cost-benefit analysis so that informed decisions can be made about the best strategies to mitigate risk events.

DNV GL is the world’s largest ship and offshore classification organization, and in this context, DNV GL is a key player in major research and development projects for the shipping industry. A core element of their focus is enhancing safety and security in shipping by pro-active use of risk assessment and cost-benefit techniques.

Part of their risk assessment method involves Palisade’s decision tree software, PrecisionTree, to develop the risk models that apply to: (1) crew; (2) environment; and (3) property.

They then use @RISK to perform Monte Carlo simulation, which factors in the uncertainty of input parameters for the risk models, and illustrates the impact on the estimates provided for the assessment of a current level of risk, as well as the cost-efficiency of risk-mitigating measures.

“PrecisionTree makes it straightforward to quickly develop event trees. These are essential to our analysis when looking at how to reduce the both the number of shipping incidents and the consequences should they occur,” explains Dr. Rainer Hamann, Topic Manager Risk Assessment, Safety Research at DNV GL SE. “At the same time we have to be realistic about the accuracy of our data inputs and, by means of distributions and Monte Carlo simulation, @RISK enables us to be clear about the level of uncertainty contained in each model. Embedded in the Microsoft environment, it also allows us to incorporate standard Excel features, making it easy to use.”

Read the original case study here.

Sept/Oct Web and Live Training Sessions from Palisade Experts

For those of you looking to hone your risk analysis and modeling skills, don’t miss out on our training services, both in-person and web-based!

Palisade Regional Seminars show you how to apply @RISK and the DecisionTools Suite to real-life problems, maximizing your software investment. All courses include free materials with dozens of example models. Participants bring their own laptops.

Events take place around the globe—look for one near you:

Asia-Pacific
Brisbane: 30 Sept-2 Oct

Europe, Middle East, and Africa
Oslo: 23-25 September
Frankfurt: 29 Sept-1 Oct (auf Deutsch)
Amsterdam: 6-8 October
Johannesburg: 15-17 October

Brazil*
Rio de Janeiro: 24-26 de setembro
São Paulo: 16-17 de outubro
Belo Horizonte: 22-24 de outubro

*All seminars are in Portuguese

North America
Denver: 29-31 October
Montreal : 20-22 October

Live Web Trainings are delivered by an expert instructor via an interactive web session. Course notes and examples files are emailed to you. With online training you can avoid travel time and costs while still interacting with the instructor and group.

Check out these valuable training sessions, from the comfort of your own computer:

8-9 October 2014, 1:00pm-5:00pm ET (6:00pm-10:00pm GMT):
Decision-Making and Quantitative Risk Analysis using @RISK, Part II

20-21 October 2014, 9:00am-1:00pm ET (2:00pm-6:00pm GMT):
Decision-Making & Quantitative Risk Analysis using the DecisionTools Suite, Part I

Palisade Software Helps Major Electronics Retailer Save Millions

A major electronics retailer was in trouble—their financial services department was near extinction, and needed to find a way to create greater savings. As a solution, they looked at increasing the issuance and utilization of its private label credit card (PLCC) to offset some of the nearly $370 million in annual interchange fees (the transaction fee charged to merchants for using the cards) related to arbitrary rates imposed by issuing banks and card brands.

This idea was easier said than done—it required an entire corporate culture shift and a relationship reestablishment with its two issuing banks—all within an eight-month period.

To get buy-in from the company’s decision-makers, there needed to be clear data that showed that the strategy was likely to succeed. The company enlisted the services of Nighthawk Intelligence to examine inefficiencies in the PLCC application process and effectiveness of marketing campaigns geared toward PLCC holders. Drew Pulvermacher, founder and chief probability officer at Nighthawk Intelligence, utilized StatTools, @RISK and PrecisionTree—all part of Palisade’s DecisionTools Suite—to help the retailer with this process.

Using StatTools, Pulvermacher was able to show how a marketing campaign to promote customer PLCC sign-up would affect consumer activity, allowing the retailer to adjust the messaging and price appoints to achieve the greatest likelihood of success for each marketing campaign. Additionally, using @RISK and StatTools, Pulvermacher was able to build a distribution library, which the retailer could use to audit variable assumptions.

Pulvermacher also used PrecisionTree to determine how best to streamline the PLCC application process (customers could get deterred by long wait lines at the customer service desk). Using PrecisionTree, Pulvermacher mapped out a series of customer decisions that took place when making purchases and where their interest in making a purchase broke down, and identified the departments that would benefit most from a faster, more efficient application process.

Within a year of implementing the strategy towards expanded PLCC usage, the company realized nearly $250 million in related accrued benefits, which included interchange savings, financing income, and enhancement services. Instead of finding a way to justify its existence, the financial services department became a vital part of the organization’s fiscal success. “Palisade…offered the resources necessary to quickly transform an entire organizational mind-set to embrace uncertainty and embed a systematic process of measuring performance,” said Pulvermacher.