PalisadeRiskASQVT1

Dave Bristol, Eastern Region Sales Manager

800-432-7475 x333, [email protected]

http://www.palisade.com

Palisade Corporation

Risk modeling and analysis in Excel

Agenda

Palisade Corporation Overview

What is risk?

Using Excel modeling to better understand

how risk impacts our work

Palisade Corporation

Continuity and longevity:

Palisade Corporation is now in its 28th year as a provider of general

purpose quantitative decision-making tools and services, boasting the

same core development team since the initial release of @RISK:

World Headquarters: Ithaca, New York

Palisade Europe: London, England

Palisade Asia-Pacific: Sydney, Australia

Palisade LTA: Rio de Janeiro, Brazil

Palisade Japan: Tokyo, Japan

Sales, Marketing, Training/Consulting, and Ops/Fulfillment also have

team members with 10+ years service time.

Palisade is proud to be employee owned.

Palisade Corporation - Education

Solid Academic Backing:

Palisade products are used in curriculums at more than 100 MBA

programs worldwide, as well as in thousands of other academic

fields at the undergraduate and postgraduate levels.

Palisade software is the featured Monte Carlo simulation

product in dozens of academic textbooks.

Allied with professional development organizations:

Palisade is accredited as a PMI R.E.P. or Project Management

institute Registered Education Provider.

Palisade is registered with the National Association of State

Boards of Accountancy (NASBA) as a sponsor of continuing

professional education on the National Registry of CPE Sponsors.

Other alliances available as needed.

Thousands of companies worldwide in all

areas of business and industry, including a

majority of Fortune 500 companies -

amounting to hundreds of thousands of

users, make productive use of Palisade

software every day.

Vague term used in many ways by many people

In modeling, it can be positive (opportunity)

Uncertainty (estimate accuracy)

Variability (random or quasi-random)

Likelihood of occurrence, size of impact

Everybody knows about them!

Common most likely estimates are hedged

Software allows us to incorporate ranges into modeling

What is risk, exactly?

Everywhere! (Its a multi-tool, not a hammer)

Investment

Retirement

Currency/options/VAR/DCF/etc.

Insurance

Losses/premium pricing/choosing a plan

Energy

Futures pricing

Production capacity consumption projection

Manufacturing

Equipment lifecycle

Inventory Management

Pharma/Health Care

R&D

Disease transmission and response planning

Where do we find risks to model?

Integrated risk and decision analytics

All products add-in to Excel & include XDK

@RISK Simulation

RISKOptimizer and Evolver Optimization

PrecisionTree Decision Tree analysis

NeuralTools Neural network prediction

StatTools Statistical analytics

TopRank Sensitivity Analysis

DecisionTools Suite

The relative likelihood of all possible outcomes to your model.

The impact of variation within uncertain inputs has on the outcomes of your model.

A breakdown of the key drivers in your model:

What pushes profits forward? What leads to

losses?

A better understanding of where to focus your mitigation resources.

Clear, user-friendly graphs and reports to communicate findings to decision makers

regardless of statistical savvy.

@RISK combines Monte Carlo Simulation with other

statistical techniques to give you:

Included with @RISK Industrial and DecisionTools Suite Industrial

Combines @RISKs Monte Carlo simulation with genetic-algorithm based optimization

Allows for optimization of aspects of a distributed objective and solving of complex non-linear models

More robust than a deterministic optimization

Customers originally combined @RISK and Excels Solver for stochastic optimization

RISKOptimizer - Functionality

Portfolio optimization and allocation

Project selection

Capacity planning and production optimization

Scheduling (job shop, manpower)

Bidding

Inventory management

Prototyping/component interaction

RISKOptimizer - Applications

Decision trees can be built directly in Excel

Allows for large-scale options models to be built over underlying models

Evaluate tree by standard tree calc, objective function, worksheet calc, macro, etc.

Can be combined with @RISK for stochastic decision tree analysis

Customers originally combined @RISK and DPL/DATA

PrecisionTree - Functionality

Real Options

Exploration/Production

Game theory

Structural integrity planning

Resource management

Classification/evaluation

Diagnosis/treatment

PrecisionTree - Applications

Palisades first product to truly meld qualitative and quantitative analysis via Neural networks

Offers multiple neural network types and BestNet search to determine best network

Requires no neural network expertise

Verifies its own results with instant LiveUpdates

Analyze categorical data in concert with statistics

LiveUpdate works with RISKOptimizer to find optimal answers to questions based on your network

NeuralTools - Functionality

Credit scoring/loan underwriting

Market pricing/prediction (energy, etc.)

Environmental analysis

Fraud notification

Counter-terrorism

Medical diagnosis/treatment

Drug efficacy

NeuralTools - Applications

Collection of statistical processes in Excel for data analysis without leaving the spreadsheet

Forecasting & Regression

ANOVA/Correlation/covariance

Non-parametric tests

Much more

Replaces statistical processes identified by our clients as unstable or inaccurate in Excel

Supports up to 16 million data points/variable

Created Excel 2007 before 2007 existed!

XDK for custom function creation

StatTools

Utility for sensitivity analysis in Excel

Determine which model inputs drive volatility

Can be used on *any* Excel model

Cut down on model-building time by identifying the factors that require distributions for simulation

Risk analysis and mitigation in moments as well as elimination of supposed risks

TopRank

Simulation modeling in MS Project

Add uncertainty to:

Tasks

Durations

Calendars

Resources . . . anywhere in Project

Risk-adjusted Gantt chart w/criticality and cruciality

@RISK6 will blend @RISK for Excel and @RISK for Project into a single unified application for

cost/schedule risk analysis.

@RISK for Project

Questions?

Dave Bristol

[email protected]

802-876-7906