@RISK

Palisade Risk Conferences 2017: Pharma/Biotech in Mass., plus Bogotá and London

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Join us in a city near you for an intensive conference on best practices in risk and decision analysis!

These events are free to attend and promise to be invaluable opportunities for broadening one’s knowledge of risk modeling, and networking with decision-making professionals in a range of industries.

Benefits of Palisade Risk Conferences:

  • Get more from @RISK and the DecisionTools Suite – get exposure to the latest techniques in risk and decision analysis so you can apply them to your own models.
  • Learn from experts – sessions are taught by Palisade’s consultants and trainers.
  • Networking opportunities – share ideas and speak with presenters, other attendees, and Palisade staff to gain valuable insight from many backgrounds.

Conference Dates:

Cambridge, Mass. – Pharmaceuticals and Biotechnology industry focus
March 7th, 2017
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Bogotá
March 9th, 2017
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London
April 27th, 2017
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See the full conference and workshop schedule.

From Boardroom to Courtroom: Using @RISK to Value Early-Stage Companies

pellegrino_associatesIntellectual property (IP) is one of the most valuable assets early stage companies own, and one of the many challenges faced by these companies with no assets other than untested technology is how to determine a fair market value for their IP should they face a civil lawsuit.  IP makes a huge contribution to local, national and global economies. Businesses rely on the enforcement of their IP, e.g. patents, trademarks and copyrights, while consumers use IP to ensure they are purchasing safe, guaranteed products. This is why it is important for organizations to protect and understand the value of intellectual property.

Pellegrino & Associates, a boutique valuation company with a specialty in software and IP, uses Palisade’s @RISK software to run Monte Carlo simulations for their risk analysis and to calculate fair IP values, based on discounted future incomes. The method is detailed in the book BVR’s Guide to Intellectual Property Valuation, by Michael Pellegrino, a leading expert in IP valuation.

“We’ve used it on more than 300 client engagements in every major sector of the economy, from software and semiconductors to chemical coatings and consumer electronics,” said Pellegrino. “We apply it to a range of damages models including the assessed value of a product, reasonable royalty payments, total cost of product reproduction, as well as the potential for lost profits – and in all the cases that went to court where we used Monte Carlo simulation, our results were accepted every time.”

» Read the full case study
» Learn more about @RISK
» Pellegrino & Associates
» BVR’s Guide to Intellectual Property Valuation

On-Demand Webinar: “Choosing the Right Distribution”

Project and Pipeline Valuation
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» Watch now: “Choosing the Right Distribution”

Which distribution should you use to represent uncertain values in your spreadsheet model? This webinar provides an introduction to probabilistic analysis and Monte Carlo simulation right in your Excel spreadsheet using @RISK, demonstrating techniques that can be used for choosing a distribution to represent uncertain variables. We will look at a variety of examples to help you become more comfortable with choosing distributions to model uncertainty.

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 select distributions to use in quantitative risk analysis for any business.

» Watch “Choosing the Right Distribution” now

» Download @RISK – try it for yourself!

Integral Consulting Uses @RISK to Help Protect the Environment

integralconsultingcasemainSustainable ‘green’ practices have been a growing focus as individuals, corporations, and governments consider issues such as global warming, highly volatile markets, and urban sprawl.  For a Fortune 100 mining company, these concepts have become a key part of managing cleanups and hazardous waste sites to increase the environmental, social, and economic benefits of the cleanups.  The company needed to address acid mining drainage from large rock piles as well as the potential for rock slide risks at the site. The cleanup solution originally supported by the Environmental Protection Agency (EPA) and State was complete removal of the rock piles and transport to an offsite disposal location. However, this could take more than 20 years to complete, at a cost of approximately USD $180M. The solution would also increase hazards to the public through exposure to years of heavy truck traffic through small towns, and produce millions of tons of greenhouse gases.

Integral Consulting, Inc., a science and engineering firm that provides multidisciplinary services in the fields of health, environment, technology and sustainability, was hired by the mining company to assist with evaluating remediation (aka cleanup) strategies for a 100-year-old mine. The Integral team used Palisade’s @RISK to evaluate multiple strategies and select a solution that minimized environmental impact and achieved full regulatory approval, while enabling the client to save more than USD $100M. The company’s mission is to help clients across a wide range of public and private enterprises to identify technically sound, cost-effective and environmentally friendly solutions to complex problems.

“@RISK enabled us to do sensitivity analysis on each criteria, which helped us determine how specific uncertainties could drive different decisions,” explained Timothy Havranek, Principal Consultant for Integral Consulting. “It let us easily identify which choice was optimum for our client, for the community and for the environment.”

» Read the full case study
» Learn more about @RISK
» Integral Consulting, Inc.
» Environmental Protection Agency (EPA)

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

Project and Pipeline Valuation
DTS

»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 Models Cancer Risks of Carcinogen Intake from Food and Beverages for Canadians

universityofvictoriaWhile news headlines regularly report on acute health issues relating to food and beverages, such as E. coli outbreaks and salmonella poisoning, very little is known about the adverse health issues caused by the longer-term intake of contaminants in those foods and beverages – including carcinogens. The University of Victoria (UVic), a national and international leader in many areas of critical research, participated in the CAREX Canada Project, funded by the Canadian Partnership Against Cancer, to better understand the environmental and occupational exposures to substances associated with cancer, and subsequently provide support for exposure reduction strategies and cancer prevention programs.

The UVic team used @RISK, Palisade’s risk analysis software, to model differences in Lifetime Excess Cancer Risk for Canadians based on contaminants found in food and beverages. The results revealed notable differences in cancer risks for several different demographics, and are detailed in the thesis, Geographic Exposure and Risk Assessment for Food Contaminants in Canada, by Roslyn Cheasley, a Master’s student with the Department of Geography at UVic.

Palisade’s @RISK enabled the team to easily and effectively determine the concentration of carcinogenic elements in the identified food and beverage products, as well as learn if certain demographics were more at risk from dietary patterns than others.

“We decided to take things up a notch when we updated the data, and upgrade to a probabilistic analysis model based on Monte Carlo simulation,” said Cheasley. “We wanted to estimate the range and frequency of possible daily contaminant intakes for Canadians, as well as associate these intake levels with lifetime excess cancer risk. This is where @RISK came into the equation.”

» Read the complete case study here
» Learn more about @RISK
» University of Victoria (UVic)

Patrick Engineering Uses @RISK for Cost and Schedule Risk on MBTA Project

PatrickEngineeringPatrick Engineering, a nationwide U.S. engineering, design, and project management firm, provides independent cost estimating, scheduling, and risk analysis services for the Massachusetts Bay Transportation Authority (MBTA). Given the uncertainty of cost and schedule duration estimates, the best way to display them is with probability distributions. Patrick Engineering uses @RISK to assess cost and schedule contingency needs based on project or program risks.

Patrick worked on the Downtown Crossing Vertical Upgrade project recently, part of the MBTA’s program to upgrade elevators and meet accessibility requirements of the Americans with Disabilities Act. The first step for the project was risk identification. “To do this, you need to work collaboratively with the client, with the designers, with the project management team, with anyone who will have insight into the project – you want them all involved,” explains Kim Kozak, Sr. Project Manager for Patrick Engineering. The full team for the Downtown Crossing station project included six organizations and approximately 20 team members.

From here, Patrick Engineering holds a Quantitative Risk Workshop with all the players. “We try to get people thinking, to encourage discussion, as even a small detail could lead to a giant risk,” said Kozak. “Similar to the situation with the Titanic – what seems like a minor detail could be enough to sink the entire ship.”

“The final results of Palisade’s @RISK models help us, and our clients, understand where projects could go – not where they will go,” explained Kozak. “And we know that if a risk does occur, we’re well prepared as we’ve already identified it.”

» Read the Full Case Study

MRAG AP Quantifies Illegal Fishing in the Pacific Islands with Palisade’s @RISK

MRAG LogoMRAG Asia Pacific (MRAG AP) is an independent fisheries and aquatic resource consulting company based in Brisbane, Australia. An international leader in the field of aquatic resource consulting, the company is dedicated to promoting sustainable use of natural resources through sound integrated management policies and practices. MRAG AP used Palisade’s @RISK software to estimate the volume, species composition and value of illegal, unreported and unregulated (IUU) fishing in Pacific Islands tuna fisheries. The outcome of their study provided recommendations on ways to strengthen monitoring, control and surveillance arrangements, to help minimize the future financial impact of IUU on Pacific Island economies.

Illegal, unreported and unregulated (IUU) fishing is a global problem that results in significant financial losses every year. Previous attempts to estimate the damages put the value between US$707 million and more than US$1.5 billion per year in the Western Pacific Ocean area alone. However, IUU fishing by its very nature is secretive, making it extremely difficult to accurately quantify the nature and extent of potential damages, as well as plan for effective Monitoring, Control and Surveillance (MCS) activities.

As part of a European Union-funded project, MRAG AP was commissioned to estimate the volume and value of IUU fishing in the tuna fisheries of the Pacific Islands region. The company took a ‘bottom up’ approach to the study, analysing detailed information at a local scale in an effort to build a more accurate picture of IUU fishing activity, particularly the variation in the nature and scale of IUU activity associated with each IUU risk in each main fishery. Estimates obtained in this way were then added together to develop an overall estimate of IUU catch and value.

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According to Duncan Souter, CEO of MRAG AP, “The challenge with this approach is that it is time-consuming and information is often very patchy and hard to collect. There are therefore many gaps to fill that require analytical methodologies of varying degrees and complexity.” For this study, the company broke down the ‘IUU problem’ into discrete, quantifiable units – volume, species composition and value – before aggregating them up to produce a regional scale estimate.

“@RISK is very user friendly, considering the complex analytical techniques we were undertaking, and provided useful outputs that allowed clear presentation of our results,” said Souter.

» Read the full case study
» MRAG AP’s report: Towards the Quantification of Illegal, Unreported and Unregulated (IUU) Fishing in the Pacific Islands Region

The Department of Energy and Climate Change uses @RISK for UK carbon emission targets

DECCThe UK government’s Department of Energy and Climate Change (DECC), is tasked with maintaining secure and economic energy supplies for the UK, while ensuring that the UK’s greenhouse gas emissions meet international targets set to combat climate change.

Under the Climate Change Act, the UK has a legal obligation to meet several national emission targets, called carbon budgets, including cutting UK greenhouse gas emissions by at least 80% by 2050 (which requires sourcing at least 15% of energy from renewable sources by 2020).

To monitor carbon budgets, the Central Modelling Team at the DECC undertakes annual projections of energy use and emissions by modelling both overall UK energy demand and the electricity supply system and calculating the emissions based on the fuels used. These projection figures are uncertain however, due to variation in each of the economic and technical inputs used in the models.

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DECC uses @RISK to explore the overall effects of these uncertainties and estimate the probabilities of not meeting the carbon budget.

“@RISK has all the sophisticated functionality required for Monte Carlo modelling, but is straightforward to use,” explains Dr Roger Lampert from the DECC Central Modelling Team. “Before adopting Monte Carlo modelling, the custom was to use scenario analysis. Using @RISK we can now use the statistical properties of the input data to better represent the full spectrum of possible model inputs. Consequently. we have more insight into the spectrum of outputs. The statistical rigour of the modelling gives us much more confidence in the level of uncertainty of our emissions estimates and therefore the UK’s ability to meet the carbon budgets.”

» Read the full case study

Rusnano uses The DecisionTools Suite for Nanotechnology Investment Decisions

Rusnano private equity firm uses the DecisionTools Suite for Nanotechnology Investment Decisions

RUSNANO is a private equity firm focused on the development of the nanotechnology industry in Russia. Using government funds, it invests in nano projects that have significant economic or social potential, across a variety of industries. Having provided capital for a company, RUSNANO works with it for five to seven years to develop the business before it is bought by strategic investors.

The hi-tech nature of these enterprises means that RUSNANO often has to make an investment decision at the R&D phase, before a product is on the market. This introduces a high level of risk, so the company looked to the discipline of risk management, adopting a modern and comprehensive approach through risk modelling.

RUSNANO uses the complete Palisade DecisionTools Suite toolset, with a focus on TopRank and @RISK. The tools help RUSNANO to model projections of different KPIs on two management levels: portfolio management level and investee management level. This allows it to calculate the right value of investment based on the risk it entails and understand the overall liquidity of the portfolio using risk analysis.

Using Palisade’s tools, risk managers at RUSNANO can communicate uncertainty to the company’s senior executives; the key factors, risks and projects that have the most impact on the company and project KPIs. Modelling risks also helps RUSNANO to understand the different micro factors that are outside the control of the investment team. The insight provided is in-depth and indicates when the impact of those factors is potentially a significant threat, therefore requiring risk mitigation action planning and model changing accordingly for the portfolio or the project to be successful.