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Palisade Risk Conference
Best Practices in Risk and Decision Analysis
November 11-12, 2015 New Orleans
2015
2015
  PALISADE

Palisade Risk Conference

Best Practices in Risk and Decision Analysis

November 11-12, 2015 • New Orleans

Palisade’s 2015 Risk Conference New Orleans Focuses on New Developments in Risk and Decision Analysis

The 2015 Palisade Risk Conference in New Orleans brought together over 150 decision-makers to discuss the latest trends and best practices in risk and decision analysis. The forum took place November 11-12 at the Hilton Riverside Hotel and Conference Center.

Sam McLafferty, President and CEO of Palisade, gave an overview of the latest developments in risk analysis software. VP Randy Heffernan followed with “Risk Management 2.0,” exploring new approaches to strategic risk. It’s all about seeking opportunities, making nimble decisions, and incorporating risk management across multiple disciplines – not just disaster avoidance.

Over 35 sessions were held across four conference tracks, including software training on @RISK and the DecisionTools Suite as well as real-world industry case studies. Case studies encompassed a wide range of applications, including a description of AECOM’s risk analysis process featuring @RISK, new insights into quality control at CH2M Hill using BigPicture, civil works infrastructure risk assessments at USACE, and many others.

The conference keynote was delivered by Phil Miclea and Amy Hedgecock of Amway Corporation. Miclea and Hedgecock described Amway’s cooperative effort with Palisade in developing a decision-making tool so that manufacturing management can quickly answer questions when evaluating the risk in future capacity needs. The new software allows management to run up to 20 different “what-if” scenarios independently or simultaneously, making for a powerful strategic tool that takes a current process of 2-3 months and condenses it to 2-3 hours.

View the keynote presentation

Conference attendees were also able to meet with Palisade consultants in one-on-one Expert Sessions. Participants took advantage of this opportunity by sharing their own models with the consultants to garner their advice on improvements and other applications of Palisade software that may be useful.

View presentations from the 2015 Palisade Risk Conference in New Orleans

Quotes from Past Attendees

“Excellent conference. If there are numbers that vary, you should be here.”

George Chiang, Independent Cost Analyst, Boeing Company

“Very good conference with good usage of time.”

Mark Mendonca, Program Risk Management, Ernst & Young

“We saw and discussed methods that directly apply to our problems, and learned to build upon them to come up with solutions.”

Michael Watson, PMP, Senior Staff Integrated Planning, Lockheed Martin

“Excellent conference. Very informative. Great topics.”

Laurie Rutherford, Director, Enterprise Risk Management at CenterPoint Energy

Join a Global Group

The 2015 Palisade Risk Conference is part of a global, annual series of meetings where professionals share ideas and advance the practice of risk and decision analysis. Events in 2015 include Toronto, Chicago, New York, San Francisco/San Jose and Calgary.

Information about 2015 Conferences

Schedule

  General Sessions      
  Software Presentations      
  Industry Case Studies

Wednesday 11 November 2015 · New Orleans

Schedule is subject to change without notice.

 

8:00 - 9:00
Registration and coffee - Quarterdeck B
9:00 - 10:00
Welcome - Chart BC

Palisade Overview, and Risk Management 2.0
Sam McLafferty and Randy Heffernan
Palisade Corporation

Chart A
Quarterdeck C
Quarterdeck A
Starboard
10:10 - 11:00
SOFTWARE PRESENTATION
Chart A

Introduction to @RISK
Fernando Hernández
Palisade Corporation

CASE STUDY
Quarterdeck A

AECOM's Risk Analysis Process
Umut Asikoglu and Marilisa Stigliano
AECOM

CASE STUDY
Starboard

Diamonds on the Line: Profits through Investment Gaming
Clay Graham
DePaul University

11:00 - 11:30
Break - Quarterdeck B
11:30 - 12:20
SOFTWARE PRESENTATION
Chart A

Introduction to the DecisionTools Suite
Fernando Hernández
Palisade Corporation

CASE STUDY
Quarterdeck C

How DecisionTools Helps to Map a Coal/Wood Pellet Co-firing Strategy
Dr. William Strauss
FutureMetrics

CASE STUDY
Quarterdeck A

Resource Loaded @RISK and its Ability to Assess the BigPicture
James Knapp and Mike Gallagher
Tecolote Research

12:20 - 1:20
Lunch - River Room
1:20 - 2:10
SOFTWARE PRESENTATION
Chart A

Decision Strategies and Data Exploration with BigPicture
Michelle Jackson
Palisade Corporation

CASE STUDY
Quarterdeck C

Forecasting Alberta Electricity Prices
Olaf Tomiuk
ENMAX Energy

CASE STUDY
Starboard

Pricing with Dynamic Variables and Simulations
Allan Woodward and Brady Manifold
eviCore Healthcare

2:20 - 3:10
SOFTWARE PRESENTATION
Chart A

What's New in @RISK and DecisionTools Suite 7
Sam McLafferty and Erik Westwig
Palisade Corporation

CASE STUDY
Quarterdeck C

Mid-Term Energy Hedging in the ERCOT Nodal Market
Glen Justis
Acclaim Strategies, LLC

CASE STUDY
Quarterdeck A

Using @RISK for Optimal Transformer Sparing Strategy at SRP
Bob Hess and Brady Conrad
Salt River Project

CASE STUDY
Starboard

Optimizing Revenue Generation on Former Industrial Land
Leigh Hostetter and Tim Havranek
Cardno

3:10 - 3:40
Break - Quarterdeck B
3:40 - 4:30
4:30
Welcome Reception - River Room

Thursday 12 November 2015 · New Orleans

 

8:00 - 9:00
Registration and Coffee - Quarterdeck B
9:00 - 10:00
Keynote - Chart BC

Scenario Thinking Made Easy
Phil Miclea and Amy Hedgecock
Amway Corporation

Chart A
Quarterdeck C
Quarterdeck A
10:10 - 11:00
SOFTWARE PRESENTATION
Chart A

Decision Tree Modeling with PrecisionTree and BigPicture
Erik Westwig
Palisade Corporation

11:00 - 11:30
Break - Quarterdeck B
11:30 - 12:20
SOFTWARE PRESENTATION
Chart A

Introduction to Project Risk Management with @RISK
Dr. Javier Ordóñez
Palisade Corporation

12:20 - 1:20
Lunch - River Room
1:20 - 2:10
SOFTWARE PRESENTATION
Chart A

Finding Optimal Solutions with RISKOptimizer and Evolver
Gustavo Vinueza
Palisade Corporation

2:20 - 3:10
SOFTWARE PRESENTATION
Chart A

Data Analysis and Prediction with StatTools and NeuralTools
Erik Westwig
Palisade Corporation

CASE STUDY
Quarterdeck A

Supercharge Your Project Performance Using @RISK
Susan Parente
S3 Technologies

3:20 - 4:10
SOFTWARE PRESENTATION
Chart A

Exploring Oil and Gas Applications with the DecisionTools Suite
Dr. Reinaldo Gonzalez
Palisade Corporation

CASE STUDY
Quarterdeck C

Correlated Forecasting of Gold and Silver Prices Using @RISK
Dr. William McKibbin
Capella School of Business and Technology

4:10 - 4:15
Conference Wrap-Up Chart BC

Randy Heffernan
Palisade Corporation

4:15
Closing Reception - Drago's Restaurant

Presenters

  Umut Asikoglu

Consultant
AECOM

Umut Asikoglu is a Risk Consultant in AECOM’s Transportation Group. Functioning as a Risk Analyst, he supports the Risk Management Team by preparing risk documents, performing quantitative and qualitative risk assessments and formulating risk mitigations. He performs contingency budgeting, project controls and cash-flow analysis. He specializes in probabilistic modeling and progress analysis to improve client decision making processes. He has the ability to prioritize and manage multiple projects simultaneously. He is experienced in the construction management field with project management expertise. He has worked on multiple projects, namely Second Avenue Subway in New York, Tappan Zee Bridge (NNYB) in New York and, Red and Purple Line Modernization in Chicago. He holds a BS degree in Civil Engineering and a MA degree in Economics and Finance from Bogazici University. He also holds MS degree in Construction Management from Columbia University.

  Neil Barnes

Founding Member
IEPM Group, LLC

Neil Barnes is a founding Member of IEPMG LLC and a Founding Member of Strong Rock Energy LLC both founded in 2014. Neil holds a BS in Geology from LSU in 1978 and an MBA from Millsaps College in 1989. Neil has worked for Texaco in New Orleans from 1978 -1982 and worked for ANR Production Company/Coastal Oil and Gas from 1982-1991. Neil was also an independent petroleum geologist from 1991- 1995 and from 1995-1997 he was in business development for Skytel. Prior to being a founding member of IEPMG and Strong Rock, Neil worked in 1997-2014 for Tellus Operating Group LLC as a geologist and exploration manager. Neil has research interests in investment decision processes in the upstream oil and gas industry.

  Brady Conrad

Sr. Engineer
Salt River Project

Brady Conrad is a Sr. Engineer at the Salt River Project with 5 years utility-engineering experience. He provides performance reporting services analysis support for generation business. He also develops reliability metrics and provides decision support, both using Monte Carlo simulation techniques. He holds a BS degree in Electrical Engineering from Arizona State University.

  Mike Gallagher, MBA, PMP

Consultant
Tecolote Research

Mike joined Tecolote Research in 2007 after being honorably discharged from the United States Air Force. He has over 13 years of program acquisitions experience with an extensive background in directing and supervising a variety of technical and programmatic operations. He is a skilled program manager teaming with military and private sector organizations to ensure seamless collaboration with multiple departments to accomplish DoD milestones.

Mike is a certified Project Management Institute (PMI) Project Management Professional (PMP) and is skilled in Strategic Planning, Cost Estimating, Risk Mitigation Management, Integrated Master Schedule Development/Analysis, and Quantitative Schedule Risk Analysis. He earned a BS in Management from the United States Air Force Academy, where he was a three-year football letterman and holds an MBA with honors from Webster University.

  Clayton Graham, MBA

Professor
DePaul University

Clay Graham is currently an adjunct Professor at DePaul University teaching courses in statistics, economics and business analytics. He’s a management consultant with Advantage Analytics, LLC specializing in analytical and graphic econometrics. He has a BS from Purdue and graduate degrees in Economics (MA) and Business (MBA - Kellogg School of Management, Northwestern University). He was a NASA Scholar (National Aeronautical and Space Administration) during his PhD studies at Northwestern (concentration in advanced large scale computer modeling and mathematical simulation). Clay has functioned in various advisory capacities to Purdue and Northwestern Universities. Prior to his current undertakings, he was CEO of an upstart aerospace, laser mapping and engineering firm. He also owned and operated a metal finishing firm in the Chicago area. He has introduced effective statistical process control technology to many firms including: Motorola, Siemens and Ford.

Prior to running his own companies, Dr. Graham worked as management consultant with Deloitte & Touche and A.T.Kearney, lnc. Clay and his companies have been the subject of articles in Forbes, Business Week, Modern Metals, Industrial Finishing and Arthur Andersen's Small Business Forum. In addition, the methods incorporated in the management of his firms have been utilized in academic case studies in the United States and Western Europe. He was selected to speak on “The Management of Professional Advisors” before a joint session of the American Bar Association and American Institute of Certified Public Accountants.

He has served as an Advisor to the White House, Members of Congress in the areas of economics, environmental control and management strategy. More recently, he consults in the investment gaming industry and with Major League Baseball teams.

  Dr. Reinaldo Gonzalez

Applied Mathematician
Palisade Corporation

Reinaldo J. Gonzalez is an applied mathematician with an extensive and versatile trajectory in consulting, teaching, and training. He earned his bachelor’s degree in Mathematics from Universidad Simon Bolivar (Caracas, Venezuela), and his PhD in Applied Mathematics from Universidad Central de Venezuela (Caracas). Mainly focused on the oil industry, Dr. Gonzalez has more than 25 years of experience applying mathematical and statistical methods to a wide range of geoscientific and engineering problems (geomodeling, integrated studies, risk analysis, data mining, oil & gas reserves evaluation, artificial intelligence, etc.). In addition to much experience instructing within the oil industry, Dr. Gonzalez has maintained affiliation with the academic world, with over 35 years of experience teaching undergraduate and postgraduate students. He is a retired Associate Professor from Universidad Central de Venezuela (School of Petroleum Engineering and School of Statistics) and currently teaches in the Petroleum Engineering program of the University of Houston as an adjunct Faculty Lecturer. His main interests are risk analysis, data analysis for pattern detection, uncertainty quantification based on predictive models, and reservoir modeling.

  Tim Havranek, MBA, PMP

Senior Consultant / Principal
Cardno

Mr. Havranek is Vice President and Manager of Cardno’s Environmental Business Strategies Group. This group is dedicated to helping clients identify optimum environmental project strategies, and implementing those strategies as efficiently as possible. Tim has over 30 combined years of experience in strategic planning and project management for the environmental remediation and oil and gas production industries. He holds an MBA degree from Carnegie Mellon University with concentrations in Strategy and Finance and a Bachelors Degree in Petroleum Engineering from Marietta College. He specializes in the application of multi-criteria decision analysis and probabilistic modeling for a wide range of environmental projects including remediation, restoration, decommissioning, sediment environmental restoration and alternative energy projects. Mr. Havranek is a Certified Project Management Professional (PMP) and author of the book Modern Project Management Techniques for the Environmental Remediation Industry.

  Amy Hedgecock

Senior Engineer
Amway Corporation

Amy is a Senior Engineer at Amway Corporation. Amy has 36 years of experience in manufacturing and engineering rising through the ranks from Production Crew Leader, to Industrial Engineer, to the critical roles of new product cost estimating and capacity analysis. Her career started in the Aerosol plant as a Production Crew Leader. That experience led her to a Plant Industrial Engineer in the Personal Care, Liquids, Laundry, Aerosol and Plastics plants with responsibilities to improve the processes in these manufacturing plants. This knowledge led her to being a key person in the corporation of recommending the manufacturing processes for new products. Her experience is crucial in providing the estimated costs for new products upon which business proposals are prepared. Amy has specialized in developing capacities for the manufacturing production lines and will be in even greater demand with this new Long Range Capacity Planning tool.

  Randy Heffernan, MBA

Vice President
Palisade Corporation

Randy Heffernan started with Palisade in 1997, and helped the company expand with its first overseas office in Plymouth, England, in 1998. Further geographic expansions included London in 2002 and Sydney, Australia in 2005. He has held a variety of roles in sales, marketing, and management, and currently oversees much of the corporate operations. Randy works closely with the sales staff to understand client needs and liaise with software development. Randy holds a BS degree in Business Management and Marketing, and an MBA, both from Cornell University.

  Fernando Hernández

Senior Consultant and Trainer
Palisade Corporation

Fernando Hernández' areas of expertise are banking, finance, manufacturing, project evaluation, market forecasting and pricing. Fernando currently owns and operates InfoMasters, a company geared towards training, consulting and developing financial applications and decision making models for financial and manufacturing companies, using Microsoft Office and Palisade software. He has developed and taught courses including Intro to Corporate Finance, and Financial Simulation and Investment Decisions. Since 1992, he has created financial models, risk analyses and feasibility studies using @RISK. Fernando earned his licentiate degree in Finance Administration from the University of Costa Rica. As a Fulbright scholar, he completed his MBA at Indiana University majoring in Finance & MIS.

  Bob Hess

Sr. Principal Engineer
Salt River Project

Bob Hess is a Sr. Principal Engineer at the Salt River Project with 38 years utility-engineering experience. He provides business analysis support for generation business, employing decision trees and Monte Carlo simulations. He also provides economic dispatch costs for power plants and failure analyses. He holds a BS degree in Mechanical Engineering from West Virginia University and is a registered professional engineer.

  Leigh Hostetter, PMP

Senior Economist
Cardno

Ms. Hostetter is a Senior Consultant in the Environmental Business Strategies Group of Cardno, with over 13 years of experience in management consulting and project management consulting working with both public and private clients on industrial, infrastructure and environmental projects. Leigh specializes in probabilistic modeling and earned value management with the goal of improving client decision making and project planning processes. Ms. Hostetter has a background in economics and environmental studies and worked in the financial industry prior to becoming a consultant. Leigh is a certified project management professional (PMP), is certified by Microsoft for Managing Projects in MS Project, and has presented findings from her work in numerous academic papers and conferences.

  Michelle Jackson

BigPicture Product Manager
Palisade Corporation

Michelle Jackson began her career with Palisade nine years ago when she joined Palisade’s Marketing Department. Following last year’s user conference where she had the luxury of meeting Palisade users, she was interested in interacting more directly with the end user. This newfound interest coincided perfectly with Palisade’s need to have a liaison between the developers and users of BigPicture. Today she handles the incoming questions and concerns from BigPicture users, and helps with the training and educating of how BigPicture can be a “go-to” tool for daily activities.

Michelle received a Bachelor of Science degree in Mathematical Computing with a primary focus in Statistics from Plymouth State University. She also holds a double minor in Computer Programming and Biology.

  Glen Justis

Founder/CEO
Acclaim Strategies, LLC

Glen Justis founded Acclaim Strategies in 2011. He serves as Chief Executive Officer of the firm and is personally involved in the design, quality assurance, and completion of client projects. Mr. Justis has twenty-seven years of combined consulting and industry experience.

Prior to founding Acclaim Strategies, Mr. Justis served as a Director in the Governance, Risk, and Regulatory Strategies practice of Deloitte & Touche LLP. His work at Deloitte focused on capital investment decisions, business intelligence, risk management strategy and analytics, and corporate development. Prior to Deloitte, Mr. Justis was a partner at R. W. Beck, Inc. and led multiple practice areas connected with capital investment analysis, commodity markets, and risk management.

Mr. Justis has conducted and overseen projects for over one hundred individual client organizations, encompassing private, publicly-traded, governmental, not-for-profit, and cooperative entities.

Mr. Justis holds an MBA with honors and a Bachelor of Science in Nuclear Engineering. He regularly invests in his capabilities by conducting independent research and participating in leading continuing education programs, the most recent of which was through The University of Pennsylvania’s Wharton School and the American Association of Collegiate Schools of Business Bridge Program.

  Krystal Joscelyne

Consultant
Lumiri

Krystal Joscelyne is a consultant at Lumiri, LLC where she specializes in combing strategic analysis and enterprise risk management for decision making. Krystal also provides training for clients in utility ratemaking, risk management, and financial analysis. She has 9 years of experience providing analysis primarily in the energy industry and for non-profits.

Prior to Lumiri, LLC, Krystal was with Sempra Energy where she performed and oversaw financial analysis in support of commodity trades, structured deals, capital investments, and long-term business planning and strategic analysis. Before joining Sempra Energy, Krystal was at Duke Energy where she provided risk analytics support to commodity traders, supply management and senior management. She has served on the Board of Directors as Treasurer for several non-profit organizations.

Krystal holds a Bachelor of Arts degree in Economics, a Master’s degree in Economics, and a Master’s degree in Financial Mathematics from North Carolina State University in Raleigh, North Carolina. She is a certified Professional Risk Manager.

  Ken Kallaher, PE

Corporate Fellow
Exp

Ken Kallaher has 37 years of engineering, project management, and project controls experience. He now works as a Corporate Fellow for exp (www.exp.com), a leading engineering consulting firm with a mission to understand, innovate, partner, and deliver professional, technical and strategic services. Today, close to 3,000 creative exp professionals across North America and around the globe continue the legacy which began in 1906, providing the expertise and experience needed to deliver successful projects for clients.

Ken has extensive experience in megaproject and large project development and execution, including Risk Management and Operations Readiness from an Owner's perspective. Ken was Alcoa’s VP Project Controls with overall responsibility for the creation, design, and implementation of the Alcoa APCS system which helped Alcoa achieve first quintile IPA IBC performance. He has been responsible for global project planning, controls, and stage gate functions on projects with a value of more than $18B across 16 countries on five continents.

During the past 5 years, Ken has led a group of specialists in the design and implementation of 6 very successful project development and execution systems, including working on the improvement of a system for the largest company in the world.

  James Knapp

Consultant
Tecolote Research

Jim is a former Acquisitions Officer for the United States Air Force. He has over 14 years of program experience with a background in Aircraft and Space Based operations. He is a skilled program manager who has worked with the DoD on numerous programs.

Jim is a certified Project Management Professional (PMP) and is skilled in System Engineering, Cost Estimating, Risk Analysis, Integrated Master Schedule Development and Quantitative Schedule Risk Analysis. He earned a BS from the United States Air Force Academy, MS from Boston University, and an MBA from the Naval Postgraduate School with a concentration in Systems Acquisition Management.

  Brady Manifold

Manager of Pricing
eviCore Healthcare

Brady Manifold is the Manager of Pricing & Underwriting at eviCore healthcare. He is responsible for funding model innovation, pricing policies, and risk contract analysis at eviCore. Prior to eviCore he worked on the provider side of healthcare serving as a capital analyst for LifePoint Health Systems. Prior to his healthcare career he spent 4 years in the Ernst & Young assurance practice providing financial assurance service to multiple clients in the financial, transportation, & healthcare industries. Brady has a BS in Accounting/Management from Belmont University.

  Sebastian Mathews

Project Manager
Navigant Consulting

Sebastian Mathews is a project manager focused on transformations and turnarounds across industry sectors. As senior consultant at the Navigant Group in South Africa and managing principal for strategic finance, he advised public sector agencies including the office of the South African president. Previously, as program director for economic development at a global partnership between the Mayor's Office, City of Atlanta and the United Nations Institute for Training and Research (UNITAR), he led best practice sharing programs around international infrastructure development, working with city officials and corporate executives from 50+ countries worldwide in support of the UN Millennium Development Goals. Prior to that, he was vice president at a corporate advisory firm advising multinational companies on privatization transactions across emerging markets in Africa and the Middle East. Sebastian began his career as process engineer at Anglo American, a global mining company. Sebastian holds a masters degree in international business from Georgia State University (USA), an MBA from Heriot-Watt University (UK), and a bachelor of commerce honors degree in finance, specializing in financial risk management and a bachelor of science degree in electrical engineering, both from the University of Witwatersrand (South Africa). He has a certification in asset based community development from the Coady International Institute, St. Francis Xavier University (Canada). Sebastian has been an associate lecturer of strategy with the Open University (UK) and presents at conferences regularly.

  Dr. William McKibbin

Consulting Financial Engineer
Capella School of Business and Technology

Dr. William J McKibbin is a consulting financial engineer specializing in risk analysis, stochastic modeling, pro forma forecasting, simulation, optimization, spreadsheet modeling, auditing, algorithmic programming, statistical analysis, and litigation support. Dr. McKibbin has been in professional practice serving companies in various capacities as consultant, analyst, auditor, programmer, and trainer since 1998. He holds a PhD from the School of Business & Technology, Capella University, and is a certified financial consultant and a Six Sigma Black Belt.

  Sam McLafferty

President and CEO
Palisade Corporation

Sam McLafferty is Palisade's founder, president, and CEO. He started the company in 1984 with the release of PRISM, a stand-alone Monte Carlo simulation package for DOS on the PC. PRISM later evolved into @RISK for Lotus 1-2-3, and then for Excel. Sam is Palisade's lead developer, with over thirty years of programming experience. He works closely with the technical and sales staff, ensuring that customer feedback is heard. He personally oversees the development and evolution of every one of the fifteen software products Palisade sells. Prior to Palisade, he was a risk analysis consultant.

  Phil Miclea MBA, CPIM, PMP

Senior Principal Engineer
Amway Corporation

Phil is a Senior Principal Engineer at Amway Corporation concentrating in Supply Chain analytical projects. His 34 year career at Amway began as a Distribution Engineer working in the Catalog operation and progressing through areas such as manufacturing supervision, facilities maintenance supervision, manufacturing engineering across multiple plants, capital project finance, and coming full circle back to supply chain analytical engineering.

Wide ranging strategic projects involving optimization of distribution centers in Amway’s largest affiliates, optimization of worldwide manufacturing operations, and inventory optimization have been the focus of his analytical work. Project management adventures have included a broad range of projects covering the analysis and installation of a multi-million dollar web printing press, to the analysis and implementation of enhanced mixing capabilities in the Cosmetics plant and to this recent Long Range Capacity Planning tool. Phil has an Industrial and Systems Engineering bachelor’s degree from The Ohio State University and an MBA from Western Michigan University specializing in Finance and Marketing. Phil was one of the early adopters of both the PMI (Project Management Institute) certification for PMP (Project Management Professional) and the CPIM (Production and Inventory Management) certification from APICS (American Production & Inventory Control Society).

  Dr. Javier Ordóñez, PMP

Director of Custom Solutions
Palisade Corporation

Dr Javier Ordóñez holds a BS in Civil Engineering from the Universidad de Cuenca, Ecuador and a MS in Project Management from the University of Maryland. Javier earned his PhD from the University of Maryland performing research on project risk analysis. His current research deals with cost and schedule integration and correlation issues through the use of Bayesian belief networks.

Javier's experience is in the areas of construction and project management, optimal project and capital investments selection, earned value management, engineering and project risk analysis, and operations research applications to engineering and management problems.

Javier has taught as an adjunct professor in the Project Management Program at University of Maryland and provides training in risk and decision analysis. He is also registered as a Project Management Professional (PMP).

  Susan Parente

Principal Consultant
S3 Technologies

Susan Parente is a Principal Consultant at S3 Technologies, LLC and an Associate Professor at Post University. She is an author, mentor and teacher focused on project and risk management. Her experience is augmented by her Masters in Engineering Management with a focus in Marketing of Technology from George Washington University, DC, along with a number of professional certifications. Ms. Parente has 17+ years’ experience leading software and business development projects in the private and public sectors, including a decade of experience implementing IT projects and Risk Management Programs for the DoD and Department of Commerce.

  Robert C. Patev

National Risk Advisor
Risk Management Center
Institute for Water Resources
US Army Corps of Engineers (USACE)

Mr. Patev serves as the National Risk Advisor to the Director of the Risk Management Center, US Army Corps of Engineers (USACE). In his current capacity, he supports Headquarters USACE, Divisions, Districts and other federal agencies in the development of methodologies for risk and reliability assessment of Civil Works Infrastructure Projects. Mr. Patev's professional experience and interests since joining the USACE in 1991 have focused primarily in the areas of risk and reliability assessment and asset management of the USACE Civil Works Infrastructure. In recent years, Mr. Patev has technically supported the USACE Dam and Levee Safety Programs, USACE Asset Management Program as well as Operations and Maintenance Divisions at Headquarters USACE. Mr. Patev currently works on international risk projects with other governmental agencies all over the world including Canada, Sweden, Germany, Netherlands, France, UK and Belgium. Mr. Patev has published numerous articles in both academic and industry journals and textbooks. Mr. Patev has two BS degrees (Geology and Geotechnical Engineering), a MS degree in Structural Engineering and is currently finishing his PhD in the Reliability Program at the University of Maryland.

  Ahmad R. Saadat

Associate Director of Finance
Sarepta Therapeutics

Ahmad R. Saadat is associate director of Finance at Sarepta Therapeutics. In his current role, he is responsible for long-term financial planning, and portfolio and strategic investment decision support. Ahmad has previously worked at Epizyme and Momenta in corporate development and strategy and as director of life science consulting at SmartAnalyst in support of partnering and M&A. Ahmad started his career in science as an enzymologist at Vertex Pharmaceuticals, Abbott labs and Chiron, where he contributed to research and development of drug candidates to treat a variety of indications in oncology and autoimmune disorders and co-authored multiple peer reviewed scientific publications. Ahmad obtained his Masters degree in Pharmacology from Northeastern University and MBA from Franklin W. Olin Graduate School of Business at Babson College.

  Adam Sharpe

Project Manager
CH2M Hill

Adam Sharpe is a project manager based in CH2M’s Raleigh office and focuses on long-range planning, asset management, advanced data analytics, probabilistic modeling, risk analysis and decision support. He has a BS in Biology from SUNY Cortland, an MS in Natural Resource Management from NC State University, and a Professional Certificate in Strategic Decisions and Risk Management from Stanford University. His range of experience with the Palisade DecisionTools Suite includes decision support for a 3,000-acre international logistics center, 50-year integrated water supply planning, watershed and riverine analysis, and asset management models for long-term renewal and replacement of plant equipment and structures.

  Jawahar Shah

Consultant
London Economics International, LLC

Jawahar is a consultant at London Economics International, LLC based out of their Boston office. He has over six years of experience in the energy sector, specializing in electricity and renewable energy projects in the US, Canada, and India. In his current capacity, he focuses on financial and econometric modeling for project valuation, economic analysis for litigation support and macroeconomic forecasting. He is also the lead electricity market modeler for Alberta, Canada.

Jawahar holds an MBA from TERI University, and a Master of Public Administration in Energy from Columbia University.

  Marilisa Stigliano

Consultant
AECOM

Marilisa is a Risk Consultant at AECOM working with the Risk Management Team in the Transportation business line. She performs Risk Management and Project Controls for multi-billion dollar projects and programs. She developed and implemented an integrated project control process to enhance project management evaluation and delivery of the final design. She performs various analytic tasks to support strategy, business/ financial planning. The tools developed include: earned value analysis, forecasting mechanisms, financial and performance reports and risk/opportunity assessment. Some of the projects and programs she worked on are: Riyadh Metro Project, NYC Build it Back, NYC DEP Resiliency Program, Purple Line in Baltimore, New Port Project of Doha, Southwest Light Rail Transit Project (Green Line Extension) in Minneapolis. She holds a Bachelor's degree in Civil Engineering and a Master’s degree in Structural Engineering from the University of Rome, a master’s degree in Construction Engineering and Management from Columbia University.

  JD Solomon

Vice President, Eastern US Strategic Consulting Practice
CH2M Hill

JD Solomon is the Vice President for CH2M’s eastern US Strategic Consulting Practice. He is a licensed PE in 3 states (NC, SC, and VA), a Certified Maintenance and Reliability Professional (CMRP), and Certified Reliability Engineer (CRE), a Six Sigma Black Belt, and is certified in Lean Management. In 2013, NC Governor Pat McCrory appointed JD to the State Water Infrastructure Authority (SWIA). In 2014, JD was appointed to the state’s Blue Ribbon Commission on Public Infrastructure.

  Dr. William Strauss, MBA

President
FutureMetrics

William Strauss is the President and founder of FutureMetrics, LLC. Bill is globally recognized as a leading expert in the renewable thermal power sector. Bill continues to be a thought leader in the sector and has published numerous papers on a variety of subjects relevant to the sector. He is also a founder and a Director of Maine Energy System, the largest manufacturer of European style automatic pellet fueled central heating systems in North America. Bill is the chief economist for the Biomass Thermal Energy Council (Washington, DC). He served as the chief economist on the Maine Governor’s Wood-to-Energy Task force in 2008. Bill is the 2012 recipient of the International Excellence in Bioenergy award. Bill has almost forty years of strategic and policy planning, project management, data analysis, and modeling experience in the power sector. He has an MBA (specializing in Finance) and a PhD (Economics, Earth Systems Science)

  Bruce Taber

Sr. Director Business Planning and Quality Systems
Terex

With a BS in Mechanical Engineering from URI, an MS in Mechanical Engineering from Carnegie Mellon, and an MBA from Centenary College, Mr. Taber has more than 30 years of experience in Product Development and Operations Management and more than 10 years leadership experience in Quality and Business Planning. He has been with Genie Industries, the aerial lifts segment of Terex, since 2004, where he is currently Sr. Director of Genie’s Quality System and leads their Sales and Operations Planning (S&OP) function within their Business Planning organization. He also heads Business Analytics and part of Marketing Intelligence.

  Dr. Sola Talabi

Consultant
Pittsburgh Technical

Sola Talabi has 14 years’ experience in the energy industry. He was the risk manager for the construction of Westinghouse Nuclear Power Plants in China, USA and UAE. He was also the Interface Manger for the Electric Power Research Institute (EPRI), and a member of the Westinghouse Intellectual Property and Innovation Committees. Sola is also a PMI certified Risk Management Professional, and has been recognized with leadership awards by the Society of Manufacturing Engineers and the National Black MBA Association. Sola has published several articles in peer-refereed journals on the subjects of engineering, energy and risk management. He holds the following degrees acquired at Carnegie Mellon University:

  • PhD in Engineering and Public Policy with a focus on risk management for large energy infrastructure projects
  • MBA with a customized focus on real estate, finance and operations
  • M.Sc. in Mechanical Engineering
  • B.Sc. in Mechanical Engineering from the University of Pittsburgh

  Olaf Tomiuk, MBA, CPA/CMA

Market Analytics Specialist
ENMAX Energy

Olaf has spent the last six years on the trade floor of a utilities company in Calgary, Alberta Canada. During his tenure he has become an expert on electricity and natural gas markets and has provided analysis in a variety of different areas. His experience and knowledge originates from the valuation of billion dollar capital investment opportunities, energy trading and hedging, and market and contract price forecasting. In his current role, he values derivative contracts, real options, and provides price forecasts for trading and long-term strategic planning.

Olaf earned an MBA in Finance and Global Energy Management from the Haskayne School of Business and also holds a professional accounting designation (CPA,CMA).

  Gustavo Vinueza

Consultant and Trainer
Palisade Corporation

Gustavo Vinueza is a Systems Engineer from University in Cuenca, Ecuador. He also earned an MBA from Torcuato Di Tella University in Argentina and a MS in Finance from Adolfo Ibáñez University in Chile. His main topics of interest include financial and operational modeling, including scientific and academic research into business practice as well as data mining relative matters. He has 16 years of experience and he’s been a consultant for companies in several industries: finance & banking, telecommunications, insurance and IT related services.

His experience includes managing project portfolios both operational and IT related, cost reduction programs, public purchases bidding, operational controls, capacity analysis and audit processes and software development projects, besides technological infrastructure implementation. He has also earned diplomas in Project Management, Usability, Business Process Management and Business Analytics.

  Erik Westwig

Software Engineer
Palisade Corporation

Erik Westwig received his BS in 1991 and MS in 1994 from the School of Applied and Engineering Physics at Cornell University. In 1998 he published the book Mathematical Physics with co-author Bruce Kusse, which was re-released in its second edition in 2006. Since 1995, Erik has worked as a software engineer at Palisade as part of the DecisionTools Suite development team.

  Allan Woodward

Vice President of Pricing & Underwriting
eviCore healthcare

Allan Woodward is the Vice President of Pricing & Underwriting at eviCore healthcare. He is responsible for funding model innovation and oversees pricing and underwriting for all managed care and transparency products at eviCore. Prior to eviCore he ran analytics for New Directions Behavioral Health, a managed care company who offers behavioral health, EAP and wellness products. In this role he primarily focused on Pricing, Decision Support, Predictive Modeling, and Network analysis. Prior to healthcare Allan was in the Telecom industry supporting operational finance and business case development.

Allan has a master’s in Business Administration with an emphasis on Finance from the University of Missouri.

  Dr. Francisco J. Zagmutt, DVM, MPVM

Managing Partner
EpiX Analytics

Francisco is a managing partner of EpiX Analytics LLC. He has a Masters from UC Davis, a PhD in epidemiological modeling from Colorado State University, and is an honorary lecturer at the University of London. Francisco has led simulation, risk modeling, optimization, and decision-analysis projects in a wide variety of industries on every continent. Examples of his consulting work include strategic forecasting and optimization of inventory under high uncertainty, modeling of catastrophic events, and risk modeling for government rulemaking. His experience working with a diverse clientele allows him and his team to use cutting edge methods to customize solutions to the specific client’s needs while also being able to effectively communicate the applicability and strategic value of the work with senior management.

Abstracts

Download zip file of presentations from the Palisade Risk Conference in New Orleans
(Individual presentations are also linked below.)

Plenary Sessions

  Welcome: Palisade Overview, and Risk Management 2.0

Sam McLafferty, Randy Heffernan
Palisade Corporation

Palisade President Sam McLafferty reviews goals of this year’s conference and ways you can benefit from the event before giving some context and background about Palisade as a company. Then, Sam will touch on some of latest innovations in the new version 7 release of @RISK and DecisionTools Suite software, and will explain the added insights these tools bring to risk and decision analysis. More in-depth exploration of @RISK and DecisionTools Suite can be found in the Software Presentation track.

Following Sam's overview, Palisade Vice President Randy Heffernan will present "Risk Management 2.0."

As memories of the recession fade, some decision makers worry that 2009-era reactive risk management policies are impeding growth and profits without much gain. Many businesses are fundamentally rethinking the role of risk management in their organizations.

According to a recent piece in Harvard Business Review, risk management has traditionally focused more than half of its time on legal, compliance, and financial reporting functions. That’s starting to change as companies realize that the vast majority of big losses in market value occur because of mismanaged strategic risks. 91% of companies plan to reorganize or reprioritize risk management in the next three years and have already begun increasing budgets to that end. With an emphasis on seeking opportunities, making more nimble decisions, and incorporating risk management across multiple disciplines, companies are going beyond mere disaster-avoidance.

Randy will share Palisade’s unique perspective on this trend, including some examples of clients leading this transformation.

  Scenario Thinking Made Easy

Phil Miclea
Amway Corporation
Amy Hedgecock
Amway Corporation

» Download the presentation

With an international manufacturing presence supporting over 100 countries, 10 domestic manufacturing plants, 3 international manufacturing plants, and $10B in sales, understanding your operational capacity is mission critical. Getting a solid grasp on all the variables that affect the manufacturing utilization in over 240 manufacturing lines, and knowing when it’s time to add, change, or consolidate capacity takes a tremendous amount of analytical effort. The leadtime to make capacity additions can take up to 18-24 months or longer, which requires timely and comprehensive analyses to meet changes in demands. Amway embarked upon a cooperative effort with Palisade to incorporate variables in demand, output rates, new products, run sizes, etc. to develop a tool that we can work with manufacturing management to quickly answer any potential questions that come to mind when evaluating the risk in future capacity needs. Allowing for up to 20 different “what-if” scenarios to be run independently or simultaneously represents the opportunity to insert a strategic tool in the decision making process that will take a current process of 2-3 months and condense it to 2-3 hours.

Software Presentations

  Introduction to @RISK

Fernando Hernández
Palisade Corporation

This introduction to @RISK will walk you through a risk analysis using various example models. Key features of @RISK will be highlighted. You will experience the intuitive interface of @RISK as you define distributions, correlations, and other model components. During simulation you will be able to see all charts, thumbnails, and reports update in real time. View results with a variety of graphing and reporting options. There’s so much to see, we’ll cover as much as time permits.

  Introduction to the DecisionTools Suite

Fernando Hernández
Palisade Corporation

This session will show you how to use the elements of the DecisionTools Suite as a comprehensive risk analysis, decision-making, and statistical analysis toolkit. Each of the products in the Suite — @RISK, BigPicture, RISKOptimizer, Evolver, PrecisionTree, TopRank, StatTools, and NeuralTools — will be presented as time allows, showing how they can be used to solve practical problems in the real world. Pick up hints and tips for using the products together. We’ll also point out interface improvements along the way that can save time and enhance ease-of-use.

  Decision Strategies and Data Exploration with BigPicture

Michelle Jackson
Palisade Corporation

BigPicture takes advantage of the fact that humans are visual animals - we tend to grasp relationships and understand data better when they are presented in a diagram or map. This session will cover some of the basics of BigPicture and how it can be used for brainstorming, strategic planning, human resources analysis and data exploration. Learn how BigPicture can be incorporated into your everyday decision making processes and how it is a valuable complement to Palisade’s other DecisionTools Suite programs.

  What's New in @RISK and DecisionTools Suite 7

Sam McLafferty
Palisade Corporation
Erik Westwig
Palisade Corporation

See a demonstration of key new features in version 7. Version 7 of the DecisionTools Suite offers efficient frontiers, copulas, and graphical model sharing in @RISK. StatTools features many new graphs, including dendrograms as part of the Cluster Analysis report, score plots in the Principal Component Analysis report, and categorical bar charts. And it adds an entirely new Excel add-in: BigPicture, for mind-mapping and data exploration, which integrates directly with PrecisionTree.

  Selecting the Right Distribution for Use in @RISK

Gustavo Vinueza
Palisade Corporation

This session covers the choice of the appropriate distribution in @RISK. A variety of approaches are presented and compared, including pragmatic, theoretical and data-driven methods. The use of distributions to treat a variety of risk modeling situations is discussed, and some more advanced features such as bootstrapping, batch fitting, and the live fit function will be covered as time permits.

  Decision Tree Modeling with PrecisionTree and BigPicture

Erik Westwig
Palisade Corporation

PrecisionTree is a powerful visual and analytical tool for mapping out complex, sequential decisions using decision trees directly in Excel. Using nodes, branches, and probabilities, you can represent and organize decisions ranging from oil prospecting to site development to options analysis. This presentation combines an introduction to the PrecisionTree interface with demonstrations of how PrecisionTree can be used to analyze various problems in decision analysis. It also includes a brief introduction to the new BigPicture add-in, showing how PrecisionTree models can be viewed using BigPicture’s sophisticated presentation quality interface.

  Introduction to Project Risk Management with @RISK

Dr. Javier Ordóñez
Palisade Corporation

The aim of this seminar is to provide a basic understanding of how @RISK can help you manage uncertainty in your Microsoft Project schedules. Using Monte Carlo simulation, you will learn how to account for schedule and costs risks in a quick and comprehensive way. At last, here is a way to answer the question “What is the probability that my project will come in on time and within budget?” With @RISK, risk modeling of your Project schedules is much more flexible and powerful than ever before.

We will show you how to set up and run simulations, and how to interpret the results. You will learn how to use @RISK step by step, and become familiar with basic concepts and terminology. We’ll demonstrate powerful graphing and reporting that pinpoints where your risks lie and what their impact may be.

You will see how using @RISK for your projects enables you to:

  • Calculate the probability of success
  • Graph the margin of error around the most likely outcome
  • Quantify and prioritize the risk drivers
  • Quantify the amount ‘@RISK’

  Finding Optimal Solutions with RISKOptimizer and Evolver

Gustavo Vinueza
Palisade Corporation

RISKOptimizer and Evolver use powerful algorithms to perform optimization in Microsoft Excel. RISKOptimizer – an advanced analytical tool that comes with @RISK Industrial – builds on traditional optimization by adding Monte Carlo simulation to account for uncertain (stochastic), uncontrollable factors in your optimization problem. RISKOptimizer and Evolver employ genetic algorithms to arrive at solutions to nonlinear problems that are impossible to find using traditional methods, and they also offer different methods for quickly solving other types of problems.

This session introduces you to these powerful tools, showing you how to set up a model, define constraints within the model, and ultimately arrive at the optimal outcome. These steps will be illustrated by means of a detailed retirement portfolio optimization example.

  Data Analysis and Prediction with StatTools and NeuralTools

Erik Westwig
Palisade Corporation

In this session you will learn how to use Palisade’s two data analysis tools: StatTools and NeuralTools.

StatTools is a Microsoft Excel statistics add-in. This session will cover how to perform the most common statistical tests, and will include topics such as: Statistical Inference, Forecasting, Data Management, Summary Analyses, and Regression Analysis.

NeuralTools imitates brain functions in order to “learn” the structure of your data. Once NeuralTools understands the data, it can take new inputs and make intelligent predictions. The new predictions are based on the patterns in known data, and offer uncanny accuracy. NeuralTools can automatically update predictions when input data changes, and it can even be combined with Palisade’s Evolver or Excel’s Solver to optimize tough decisions and achieve desired goals. This session uses easy-to-understand examples to demonstrate applications of NeuralTools predictions. We will also touch upon some of the exciting new procedures in StatTools version 7.

Case Studies

  The Risk Review Process for a Public Private Partnership – A South African Urban Development Case Study

Sebastian Mathews
Navigant Consulting

Public private partnerships (PPPs) remain an attractive means by which the public sector can meet its obligations to communities for infrastructure provision, particularly in emerging economies. A PPP represents a contract between a public party and a private party in which the public party transfers the risk of the project to the private party and the private party is in turn optimally compensated with a risk-adjusted return. The optimization question generally centers on key tests that a PPP must pass; namely is it affordable, does it offer "value-for-money," and has substantial risk been transferred to the private party?

To address these tests, this presentation describes the risk review process surrounding the building, ownership, operation, and future transfer (BOOT) of an urban development zone (UDZ) in South Africa, structured as a PPP by a local municipality in response to a commitment by the president of South Africa to the community. Given concerns raised whether the PPP would optimally deliver returns commensurate with its risk profile – an all-important dilemma faced by designers of PPPs – a due diligence review of the project was commissioned by the South African government.

This presentation explores various facets of the review process, including the practical use of Monte Carlo-based risk adjusted scenario analysis using Excel add-on decision tools such as those developed by Palisade, in conducting the PPP tests described above. The presentation further demonstrates how a transparent review process aided in jointly adjusting key variables in the PPP model to arrive at a "win-win" solution, such that risks were transferred and returns distributed in a more equitable manner between parties, thus maximizing the value to the community.

  AECOM's Risk Analysis Process

Umut Asikoglu
AECOM
Marilisa Stigliano
AECOM

» Download the presentation

Every construction project or program includes a degree of uncertainty. Complex decisions are needed to address the uncertainty. The decisions require processing data, which unfortunately is often lacking or overwhelming, and there is limited time to process and select the most favorable options. AECOM’s Program/Project Risk Management efficiently drills down into the essential data and logically filters the information. This presentation will provide a brief overview and understanding of AECOM’s typical Risk Analysis Process.

The presentation will walk through an integrated cost and schedule model which features @RISK software.

Key components of the analysis include:

  1. Cost Estimate Uncertainty;
  2. Cost Risk Events;
  3. Schedule Impact Cost;
  4. Escalation Projection;
  5. Schedule Delay and;
  6. Comparison between mitigated and unmitigated cases.

The model shows the project’s risk exposure at different confidence levels.

The presentation will also address:

  1. The advantage of an integrated model and;
  2. The unique tools developed by AECOM’s Risk Management Team to facilitate analysis process based on studies on over 10 multi-billion dollars of construction projects.

  Diamonds on the Line: Profits Through Investment Gaming

Clay Graham
DePaul University

» Download the presentation

With over a trillion dollars being risked on worldwide sports gambling every year, the interest in modeling game performance in general, and baseball in particular, has gained growing popularity. Integrating baseball game modeling with analytically-based gambling allows for these two elements to be exploited with a single objective: profiting from the marketplace inequities between the game (production) and betting markets (price and lines). Two questions will be addressed: First, can an accurate baseball gaming model be derived and used to calculate the probability of winning and the economic consequence predicated upon the betting line? Second, what is the optimal bet size based upon the risk tolerances (operational constraints) of the investor? Included will be the derivation of a production function which can be used to calculate the probability of a winning team. Defining the implication of the betting line will address cost, payoffs, and the implied probabilities of winning. Expected Return on Investment and Betting Edge will provide an economics perspective.

  How DecisionTools Helps to Map a Coal/Wood Pellet Co-firing Strategy

Dr. William Strauss
FutureMetrics

» Download the presentation

The analysis looks at all the coal-fired power plants in the US and determines a ranking from most to least optimal for being part of a strategy to co-fire wood pellets with coal. Co-firing is how most of western Europe, the UK, Canada, and South Korea are lowering carbon emissions from power plants. The US's Clean Power Plan is the policy that will support that strategy in the US beginning in 2020. There are many inputs to the optimization algorithm, with some uncertain and some non-linear. The results yield locations that end up with a very low incremental increase on power costs (less than a penny per kilowatt-hour), no loss of jobs (in fact an increase in jobs), and significant reduction in carbon emissions. We will show how RISKOptimzer in conjuction with @RISK can be used to work out the best plants (and therefore the best states) to target for focused action to educate power plant operators, utilities, coal producers, regulators, policymakers, and environmental groups on how this strategy benefits all the stakeholders.

  Resource Loaded @RISK and its Ability to Assess the BigPicture

James Knapp
Tecolote
Mike Gallagher
Tecolote

» Download the presentation

In recent years, the Department of Defense (DoD) and Department of Energy (DOE) have begun to mandate resource loaded Integrated Master Schedule (IMS) deliverables by not only prime hardware and software developers, but also service-based contracts. Historically, service contracts have been regarded as Level of Effort (LOE), but due to high head counts and large contract values, some Systems Engineering and Integration (SE&I) contractors are required to provide resource loaded IMSs to identify the quantity and types of resources producing each deliverable.

This presentation will share experiences from past DoD and DOE programs and illustrate how the government assigned risk to resource pools to evaluate the likelihood of cost, schedule, and technical risk. In addition, we will discuss how Tecolote Research utilized @RISK® and BigPicture® to provide our customer with cost impacts and resource allocation recommendations. Analysis results not only helped establish the correct resource skill mix for current work, but also generate resource workload estimates for future fixed price contracts.

  Uncertainty Modeling in Integrated Business Planning: It isn’t Black and White, It’s Grey

Bruce Taber
Terex

This presentation explores the consensus-forming value of range estimates and confidence intervals rather than single-point estimates to answer the questions, “How much demand is there for our product or services?” “How much capacity should we have?” and “How much should we produce?” Specifically it demonstrates the use of range estimates in Demand and Capacity Planning, and how Terex employs the Delphi Method and Monte Carlo simulation to help drive consensus, and thus improves their answers to those questions.

  Forecasting Alberta Electricity Prices

Olaf Tomiuk
ENMAX Energy

» Download the presentation

ENMAX is a vertically integrated, municipally owned utility company operating in one of North America’s only deregulated marketplaces. Its diverse portfolio of generation assets include coal, combined-cycle natural gas, simple cycle natural gas, and wind.

The hedging and trading group is responsible for locking in returns, reducing risk, and optimizing positions to take advantage of perceived market inefficiencies. This presentation explores the complexities of price forecasting and how Palisade’s @RISK Monte Carlo simulation software facilitates the process.

  Development of Custom Event Tree and Fault Tree Applications for Use in the Risk Assessment of Civil Works Infrastructure at USACE

Dr. Javier Ordóñez for Robert C. Patev
Palisade Corporation

The presentation will discuss the @RISK software tools that were developed to assist USACE engineers in providing a consistent method of analysis in their risk assessments and uncertainty analysis of critical Civil Works infrastructure. We'll examine the methodologies developed for the @RISK event tree and fault tree tools, and demonstrate their current capabilities, including uncertainty modeling that will greatly assist with risk assessments of critical infrastructure.

  Pricing with Dynamic Variables and Simulations

Allan Woodward
eviCore Healthcare
Brady Manifold
eviCore Healthcare

» Download the presentation

eviCore pricing models are very large and complex, incorporating dozens of assumptions. The assumptions cover a wide range of areas, including expected utilization levels, and management impacts rates. Historically, the pricing team would present the assumptions used in our modeling, and any relevant information as to why we selected the value we chose. All of the financial projections were based off of the aggregate results of static assumptions. At most the pricing team would do some sensitivity around a particular variable of which we were not confident. These sensitivity analyses were at most 3 different static variables: Best Case, Most Likely, and Worst Case. At the beginning of 2014, we proposed the introduction of dynamic variables in modeling our assumptions. These variables would offer a range of results based on a given distribution. We would then use @RISK Monte Carlo analysis to simulate multiple iterations of our proposed pricing. Instead of a final product that was one fixed dollar amount, we are now able to show the probability of certain outcomes (i.e. likelihood of an operating loss). The new methods have altered the way we look at, quantify, and monetize risk, allowing our executive team to more closely mirror pricing proposals with internal risk tolerance.

  Mid-Term Energy Hedging in the ERCOT Nodal Market

Glen Justis
Acclaim Strategies, LLC

» Download the presentation

The subject company is a municipal electric utility located in the ERCOT power market area of Texas. They own coal and natural gas-fired generation, some of which has operating costs near prevailing wholesale market prices. This creates frequent "make or buy" decisions. In addition, the utility has experienced significant periods of costly energy shortfalls due to combinations of high load conditions and generation outages. This presentation showcases how the company is applying @RISK and other components of DecisionTools Suite to analyze their energy volume and market price exposure, and make optimal energy hedging decisions. A key element is treatment of locational differences in market prices relating to ERCOT's transition to a nodal pricing model.

  Using @RISK for Optimal Transformer Sparing Strategy at SRP

Bob Hess
Salt River Project
Brady Conrad
Salt River Project

» Download the presentation

Salt River Project (SRP) has developed stochastic methods for determining the optimum sparing strategy for its power plant generator step-up transformers. Step-up transformers are essential to enable generators to connect to the power grid and deliver power to customers. Representing a single point of failure, a transformer can fail unexpectedly and catastrophically, rendering a generator inoperable until a spare can be installed. Replacement may require a month’s time if a spare is available, but could take up to a year for a new transformer to be manufactured, shipped, and installed.

Various @RISK Monte Carlo simulation models have been developed to simulate potential failures and their consequences for our fleet of power plants. The results provide insights into possible failure scenarios and the benefits of single or multiple spare transformer acquisitions. The analysis has proven to be particularly beneficial as a single spare can support multiple, similarly-sized generators. Multiple generator failures require multiple spares to prevent extended periods of lost production. Also, the long delivery time creates the risk exposure that newly installed spares could fail prior to arrival of replacement transformers, which is part of the modeled risk.

The simulation results include probability distributions of failure events, lost production values and the range and certainty of the value of adding additional spares. The number of spares of each type can be optimized to achieve the minimum total cost, which includes outages and the investment in spares. Available output charts show the distribution of net present value of various sparing strategies and inform the sparing decision by providing the confidence of receiving sufficient value for incremental investments in additional spares. Other results show the reduction in the risk profile when spares are added to the inventory. As the fleet ages and probability of failure increases, rerunning the model with updated failure-related distributions of will provide guidance on the need to change the strategy over time.

  Optimizing Revenue Generation on Former Industrial Land

Leigh Hostetter
Cardno
Tim Havranek
Cardno

» Download the presentation

Industrial facilities often require large tracts of land on which to operate. In addition, companies operating in this sector often own additional land surrounding operation centers to act as a ‘buffer zone’ from neighboring communities and businesses. When operations cease, and environmental remediation activities are complete, companies are often left with large properties that are unused or underutilized. Cardno has developed an approach to identify the “highest and best use” of available property by finding innovative ways to monetize the various land assets associated with the facility. This monetization can take the form of new ways of generating revenue from available land assets, the reduction of current operation costs, or a combination of both. Cardno’s approach includes a combination of traditional decision analysis techniques, probabilistic modeling using Palisades’s @RISK and the application of the RISKOptimizer tool.

The proposed case study involves identifying the highest and best use for a former manufacturing facility located on more than 3,000 acres of land. Cardno conducted a framing session with the client to identify alternative uses of the property that were economically and technically feasible, environmentally friendly, and acceptable to client investment tolerances. GIS techniques and internal knowledge was used to divide to property into 8 distinct areas having different environmental properties. A facilitated brainstorming session was then conducted to identify potential alternative uses for each area. Probabilistic models were created for each alternative use in each area to capture uncertainty around timing, costs and revenues to generate net present values. RISKOptimizer was then used to define constraints (some alternatives could be performed in tandem while others could not), and to find the best combination of alternatives for each area of the site. The identified optimal strategy is estimated to generate tens of millions of dollars in net revenue for the client over the next 30 years.

In addition to presenting the model structure, optimization structure and results examples, the presentation on this topic will include discussion of best practices and considerations for alterative generation, screening and data gathering. This case study is based on a recently-performed project, but details have been modified to protect client confidentiality.

  A Clearer View of the Unknown – Upstream Oil and Gas Investment Decision Making in a World of Uncertainty

Neil Barnes
IEPM Group, LLC

The upstream oil and gas industry is very capital intensive. Many factors make actual amount of capital to be invested, as well as performance of the capital investments, substantially uncertain. Uncertainty impacts all metrics – financial, reserves, and operating attributes. In spite of this substantial uncertainty, common industry practice, and most commercially available economic analysis packages, utilize single point input values – deterministic calculations. Occasionally scenarios using single point computations may expand such an analysis. Might investment decisions improve if analyses captured broad and inherent uncertainty?

A simple calculation of nominal return for an investment is presented. From this simple starting point a more realistic and robust computation is developed. Uncertain inputs are identified and sources of fair descriptions of uncertainties presented. Emphasis is given to the uncertainty of well production performance.

Deterministic investment analyses can calculate performance metrics but cannot characterize how likely such outcomes are. Investment analyses with uncertainty can present both: metrics and likelihood of those metrics. As powerful as this additional clarity of the uncertain future is, it comes with a price: a substantial increase in complexity, and more importantly, much confusion among decision makers who do not know how to use the additional insight. A potentially huge, non-quantifiable advantage of using assessment with uncertainty is the communication among the parties to the analyses. @RISK software is used to build uncertainty analysis into the investment models presented, and to interpret the results for communication to others.

  Advanced Risk Management to Improve Project Delivery Certainty and Operational Effectiveness on Energy Infrastructure Projects

Dr. Sola Talabi
Pittsburgh Technical

Inadequate risk management is a significant cause of cost and schedule overruns in energy infrastructure projects. Many risks that affect project delivery are common across technologies and industries. When risks are not properly identified and mitigated, incidents occur that result in substantial costs to the involved company. Moreover, these incidents lead to regulatory “overcorrections” that increase expenses across the entire industry. The oil and gas and the nuclear industries have both recently come under significant regulatory and public scrutiny due to the recent Macondo and Fukushima incidents that occurred respectively in both industries. We provide a case study to demonstrate the benefits of the implementation of advanced risk management practices to improve project delivery performance and prevent risk incidents from occurring.

  Exploring Custom Solutions using Palisade Software: Examples from Finance, Manufacturing, Project Management, and More

Dr. Javier Ordóñez
Palisade Corporation

Palisade Custom Development has written dozens of different types of specialized applications using the functionality of @RISK, PrecisionTree, TopRank, and other DecisionTools Suite products. These applications run the gamut of industry sectors, and are specifically designed to accomplish just what the client needs. In this way, Palisade custom-designed applications simplify the rollout of powerful decision-making analytics within organizations by reducing learning curves and removing any potentially confusing options for users. Interfaces, model logic, and reports can all be tailored to the client’s exact specifications, driven by powerful Palisade analytics “under the hood.”

Most Palisade custom solutions run directly in Excel, using VBA and the Excel Developer Kit (or XDK) feature of the DecisionTools Suite programs. Some are built using the @RISK Developer Kit (RDK), a programming toolkit that runs outside the Excel platform and can be used on a web server.

This session will highlight a number of interesting examples of different types of custom applications we’ve done. They include cost estimation, risk registers, asset management, retirement planning, oil and gas prospecting, and more.

  Evaluating the Value-at-Risk of an Integrated Portfolio using @RISK to determine Enterprise Risk/Return Tradeoffs

Jawahar Shah
London Economics International, LLC

London Economics International (LEI) was engaged by a large electricity market participant to recommend an optimal risk reduction / returns enhancing investment strategy for its integrated portfolio. Using @RISK, LEI uncovered synergies between two unrelated parts of our client’s portfolio: (1) revenue streams from the sale of electricity into the wholesale electricity market from the client’s portfolio of power assets and (2) financial (fixed income and equity) investments. The power portfolio was determined to be an effective low-cost sink for reducing risk, while the investment portfolio was identified to be a relatively low risk strategy for enhancing returns.

The engagement required estimating the enterprise Value-at-Risk (VaR) over a multi-year period, accounting for the individual characteristics of each asset portfolio and the inter-relationships between the two.

LEI used @RISK’s distribution fitting feature to identify the “best-fit” for the underlying distributions of historical wholesale electricity prices, as well as the underlying distributions of historical prices for each investment asset. These best-fit distributions were used to isolate their statistical parameters. LEI used independently sourced forecasts for wholesale electricity prices and forward estimates of investment prices, which were then “sculpted” using the parameters isolated from historical data. LEI also estimated the correlations between forecast prices among each of the client’s assets, in part by using @RISK’s define correlations tool.

Using the sculpted price forecasts as well as the correlation matrix created by @RISK, LEI estimated the single-year and multi-year enterprise VaR for the client over a five year window. LEI also calculated the individual portfolio (power and investment) VaR. These tests were completed using 30,000 and 100,000 iterations of Monte Carlo simulations.

The analysis revealed that at the overall enterprise level, synergies exist between the power and investment portfolios that can be harnessed to create an optimal risk-reward metric for the client. Contrary to the traditional view that exposure to equity assets is risky, increasing equity exposure was found to be an effective way to increase returns. The additional risks from doing so could be more than counteracted by hedging a part of the power portfolio using forward electricity prices. When deployed together, these strategies resulted in an optimal (least cost, maximum return) investment strategy for the client.

  Going Beyond the Numbers - Drawing Critical Insights from Probabilistic Analysis

Adam Sharpe
CH2M Hill

» Download the presentation

Decision makers when faced with making high-stakes capital investment decisions often resort to the comfort of familiar, and oftentimes less vigorous, means of analysis, and excessive safety factors. The consequence can be decisions that never achieve their desired outcome, or deliver less-than-expected returns. The decision process can be a more informed data-driven discussion on a range of potential outcomes, using probabilistic analysis. Like most types of analysis, probabilistic analysis requres assumptions about future conditions that can be considered speculative. Even so, the insights developed from probabilistic analysis, and the dialogue around the potential range of outcomes, provides for more informed discussions on trade-offs and managing risk. This ultimately allows the final decision to be structured to achieve success.

This presentation will highlight the importance of going beyond just the numbers to draw critical insights that drive action from the decision process. Case studies will be provided, recapping some case studies reviewed in previous Palisade conferences, but focusing in on the insights drawn from analyses in support of making informed decisions. The case studies will include: (1) an economic development decision for a small municipality, (2) asset renewal and replacement funding decisions for a public utility with over $800 million in physical assets, and (3) energy efficiency improvement decisions for a private regional utility provider.

  A Novel Approach using @RISK to Address Portfolio Attrition when Valuing a Pharmaceutical R&D Pipeline

Ahmad R. Saadat
Sarepta Therapeutics

Pharmaceutical drug development is characterized by massive capital investments, very long timelines (>10 years) and significant risks. Recent statistics indicate a commercialization success rate of about 15 percent with estimated combined costs of $1 billion dollars for each product.

Diversification of risk through a portfolio of products is a widely used strategy for all pharmaceutical companies. The portfolio is comprised of drug development programs with varying level of investment, probability of success, and commercial opportunity. Net present value calculations from discounted cash flows are the widely accepted method to translate future outcomes into present value. However, while NPV is good at defining current value (in case of a purchase or sale), this metric does not describe future outcomes. In other words, the same NPV can describe different outcomes with different revenues, costs, and risks. Furthermore, the typical base case, worst case, best case analysis has major errors associated with outcome probability considerations.

This presentation proposes a novel method using @RISK simulation techniques that aim to optimize management decisions and answer many questions including but not limited to:

  • What are the likely outcomes?
  • Portfolio pay-off ratio is introduced as the optimum metric that combines risk and rewards
  • What is the optimum size of a portfolio, and how to prioritize investments?
  • How do partnering, M&A, and financing decisions impact value creation and risk profile?
  • What are the key variables, and what is their financial impact on future value?
  • How wrong can we be about the model assumptions and still make the same investment decisions?

  Exploring Oil and Gas Applications with the DecisionTools Suite

Dr. Reinaldo Gonzalez
Palisade Corporation

The DecisionTools Suite is widely used in oil and gas exploration, production, and project decisions. For decades, @RISK has helped engineers and finance managers estimate unknown reserves, value new projects against each other, and craft optimal strategies. PrecisionTree, another tool in the DecisionTools Suite, is commonly used for drilling strategy discussions, production siting problems, and other multi-stage, sequential decisions. RISKOptimizer comes into play when companies need to determine the best “mix” of projects in their portfolio in order to maximize overall returns.

In this presentation, we will demonstrate how @RISK and the DecisionTools Suite can be applied to common types of issues faced by oil and gas producers.

  Big Data and Mind Maps: Improving Decision Making Using NeuralTools and BigPicture

JD Solomon
CH2M Hill

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Two critical elements for quality decision making are having meaningful, reliable information, and having logically correct reasoning. Many resources are wasted in the pursuit of establishing both elements with a high degree of certainty. NeuralTools is a sophisticated data mining application that uses neural networks in Microsoft Excel, while BigPicture takes advantage of both visuals and spreadsheets in Excel to help decision makers grasp complicated information at a glance. The presentation will focus on the use of these tools to more effectively obtain meaningful, reliable information in combination with demonstrating logically correct reasoning.

This presentation will focus on two cases studies. The first is a large, multi-site energy efficiency program involving nearly 100 locations, where historical data had significant gaps and there were 4 major options at each location to meet program goals. The second involves the expansion of a large pharmaceutical company where it was necessary to fill historical data gaps while at the same time making realistic forecasts, projecting for product demand and project costs under multiple scenarios.

The attendee will gain a basic understanding of how NeuralTools and BigPicture can be used independently and in conjunction with one another. Both projects required some non-traditional thinking and creative solutions, and the attendee will gain unique and creative applications of both tools.

  Design of a Large Industrial Project Risk Tool – Calculating Risk and Opportunity Adjusted ROI

Ken Kallaher
Exp

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Exp recently completed a comprehensive qualitative and quantitative capital project risk system based on @RISK. It has been deployed globally in a large industrial company with more than $20B in annual sales, operating in more than 80 countries. The @RISK based model and risk process are now mandatory for all capital projects larger than $1M. Independent cost and schedule risks and opportunities are modeled using a classical risk register approach. A risk adjusted ROI is calculated for each capital project showing the net impact of all cost and schedule risks and opportunities. An approximation of the impact of each risk and opportunity is calculated and presented in an innovative graphical format. The risk tool information is used by company experts during internal reviews to shape and optimize projects. The tool ensures comparisons between competing projects from different regions and business units are factual and objective. Company executives are now using the risk tool results to strengthen the decision making process and optimize the capital project portfolio.

  Real-World Case Studies Using Bayesian Analysis with @RISK, and how to use Bayesian Analysis in Your Models

Dr. Francisco Zagmutt
EpiX Analytics

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Bayesian analysis allows combining data and knowledge (e.g. expert opinion) within a model, to inform complex decisions that are hard or impossible to solve using traditional methods. In the last decade, Bayesian analysis has moved from a niche technique reserved to academic circles, to the forefront of big data and predictive analytics. Companies such as Amazon, Apple and Google heavily rely on Bayesian methods to support their core business model, and a big part of this revolution has occurred thanks to better technology to build fast and accurate bayesian models.

Despite its rising popularity, understanding the practicalities of applying Bayesian analysis to a risk model can be intimidating, partly because the literature is largely biased towards statistical packages or specialized bayesian tools rather than general modeling tools like @RISK.

In this talk, an intuitive introduction to the principles of Bayesian analysis will be presented, followed by a series of applied examples using Excel with @RISK to demonstrate the value of Bayesian analysis in a variety of applied settings, based on real-life case studies and example models from the presenter’s work providing strategic risk modeling consulting and training to diverse organizations. The examples will emphasize how to incorporate Bayesian methods within a larger risk model without affecting its general structure.

This talk should appeal to practitioners new to Bayesian analysis as well as experienced risk analysts that would like to further their knowledge. Example models shown during the talk will be made available to the participants.

  Building Better @RISK Models: Case Studies in Product Forecasting and Strategic Analysis

Krystal Joscelyne
Lumiri

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Are your @RISK models effective at helping make critical decisions, or just seen as an interesting exercise to others? Analysis is only useful if it can be clearly presented and explained to the key stakeholders: inputs are calibrated correctly, the modeling is trusted, and the insights are readily apparent.

This presentation will focus on two cases studies. In the first, we will walk through an alternate way to set up an @RISK financial forecasting model of a new product as a vehicle to discuss strategies for calibrating inputs received by stakeholders, getting non-technical stakeholder buy-in, presenting results to executives, and showing model design best practices.

The second case study uses @RISK for strategic analysis, examining risk interaction across business units. This approach was presented to a Fortune 500 company’s Board of Directors, and showcases how Monte Carlo analysis can be presented to executives to answer high-level questions.

  Correlated Forecasting of Gold and Silver Prices Using @RISK

Dr. William McKibbin
Capella School of Business and Technology

Gold and silver prices have historically correlated positively with the US national debt and the US real money supply. Conversely, gold and silver prices have historically correlated negatively with the Dow Jones Industrial Average and US Dollar Index. Finally, gold and silver prices have historically held positive correlations with each other. But what of new indicators that seemingly portend the price of gold and silver, including the EU Central Bank Total Assets. This presentation presents data and analysis using the new correlated time-series in @RISK 7 to bring these factors into perspective as predictors of precious metals prices. The presentation uses current data from the past decade to analyze how analysts are leveraging correlated time-series techniques to forecast gold and silver prices in an economy that has recently punished commodities, including gold and silver. The presentation concludes with forecasts about the future of precious metals in today’s volatile equities environment.

  Supercharge Your Project Performance Using @RISK

Susan Parente
S3 Technologies

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You’ve identified your project risks and developed your risk register. What’s next? Now get the real value of Project Risk Management by using @RISK to pinpoint tasks with the greatest uncertainty and impact on your project schedule and costs. Risk Management is more than identifying risks. It’s noting which threat risks should be addressed, then: reducing them, avoiding them, or creating contingency plans which can be implemented should they occur.

Join this session to learn how to deliver projects on time, within budget, within scope, and with customer satisfaction, by using @RISK for project risk management!

The Hilton New Orleans Riverside Hotel

The 2015 Palisade Conference will be held at:

Hilton New Orleans Riverside
Two Poydras Street
New Orleans, LA 70140

To reserve your room:

- Reserve online here
- Call 504-561-0500 and mention the Palisade Risk Conference

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