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Palisade Risk Conference
Best Practices in Risk and Decision Analysis
November 15-16, 2017 Nashville
2017
2017




Palisade Risk Conference

Best Practices in Risk and Decision Analysis

November 15th-16th, 2017 • Nashville

Our Biggest Event of the Year – Palisade’s 2017 Risk Conference Nashville

Join Industry Leaders and Software Experts

The 2017 Palisade Risk Conference in Nashville will take place November 15-16 at the Renaissance Nashville Hotel. The conference offers multiple tracks, including software training sessions on @RISK and the DecisionTools Suite, and practitioner case study sessions. Case studies encompass a wide range of applications. Past events have included topics such as supply chain management with Amway, quantifying megaproject risk with Ontario Power Generation, communicating risk to decision makers with CH2M Hill, valuing R&D projects with Novelis, and many more.

The 2016 Palisade Risk Conference in New Orleans brought together over 100 decision-makers from a wide range of industries to discuss the latest trends and best practices in risk and decision analysis. This year’s event promises multiple tracks of real-world industry case studies, professional development, networking opportunities, and more.

Conference attendees will also be able to meet with Palisade consultants in one-on-one Expert Sessions. You’ll get a chance to bring your own models for the consultant to review.

Plus, you won’t want to miss all the networking opportunities included with your conference registration, including lunches, breaks, and a reception where you can share ideas and exchange business cards with other professionals facing similar challenges.

View the 2016 Risk Conference schedule and presentations

Quotes from Attendees

“The conference is filled with interesting sessions, brilliant people, and great professional opportunities.”

Susan Parente, Principal, S3 Technologies

“Very worthwhile use of time.”

Eric Ho, Senior Risk Manager, Arcadis

“This conference was the perfect jump start to my learning experience.”

Vy Kieu, Engineer, Salt River Project

“An excellent mix of statistical knowledge, application, and focust on development.”

Dominic Abadie, Senior Risk Analyst, Whitney Bank

“Always a tough decision deciding which sessions to attend.”

Kevin Weaver, Consultant, First Energy Corp

“As an introduction to the software, I thought this conference was eye-opening. As I get more familiar with the software, I can see future conferences being valuable in honing my skills and learning new tricks and different perspectives on using the software.”

Cory Forgrave, Economic Analyst in the DOI Division of Energy and Mineral Development

Conference Tracks - Learn from the Experts

The Palisade Risk Conference will offer various ways to maximize your experience.

Case Studies:

Hear users in the field describe how they apply @RISK and DecisionTools software to their real-life problems. Case studies come from a wide range of industries and disciplines.

Software Training:

Here’s your chance to get exposure to the latest in risk and decision analytics software and techniques. Get more from @RISK and each of the products in Palisade’s DecisionTools Suite. Sessions are taught by Palisade’s expert consultants and trainers. Learn direct from the source!

Expert Sessions:

Sign up for a one-on-one session with a Palisade consultant to get advice on your particular model or risk modeling issue.

Networking – Learn from Each Other

The Palisade Risk Conference will offer plenty of opportunities to mingle and share ideas with other delegates, presenters, and Palisade staff. Lunches, breaks and networking receptions are all included with your registration.

Join a Global Group

The 2017 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 2017 include Chicago, Columbus, Sydney, New Delhi, Mumbai, Munich, and more.

Information about 2017 Conferences

Schedule

  General Sessions      
  Software Presentations      
  Industry Case Studies

Wednesday 15 November 2017 · Nashville

Schedule is subject to change without notice.

 

8:00 - 9:00
Registration and coffee - Belmont Prefunction (Outside the Belmont Rooms)
9:00 - 10:00
Belmont 1 (Level 3)
Belmont 2 (Level 3)
Belmont 3 (Level 3)
10:10 - 11:00
SOFTWARE PRESENTATION

Introduction to @RISK
Dr. Raúl Castro
Palisade Corporation

CASE STUDY

Evaluating Plant Closure Options using @RISK
Tim Havranek
Optima Analytics, Inc.

11:00 - 11:30
Break - Belmont Prefunction (Outside the Belmont Rooms)
11:30 - 12:20
12:20 - 1:20
Lunch - Music City Ballroom (Level 2)
1:20 - 2:10
SOFTWARE PRESENTATION

Selecting the Right Distribution for Use in @RISK
Michelle Jackson
Palisade Corporation

2:20 - 3:10
3:10 - 3:40
Break - Belmont Prefunction (Outside the Belmont Rooms)
3:40 - 4:30
Keynote - Fisk (Level 2)

The Perception of Risk Through Rose-Colored Glasses
Robert Patev
US Army Corps of Engineers

4:30
Welcome Reception - Bridge Lounge (Level 3)

Thursday 16 November 2017 · Nashville

 

8:00 - 9:00
Registration and Coffee - Belmont Prefunction (Outside the Belmont Rooms)
Belmont 1 (Level 3)
Belmont 2 (Level 3)
Belmont 3 (Level 3)
9:00 - 9:50
SOFTWARE PRESENTATION
Belmont 1

Tips and Tricks in @RISK and The DecisionTools Suite
Michelle Jackson
Howie Duncan
Palisade Corporation

10:00 - 10:50
11:00 - 11:30
Break - Belmont Prefunction (Outside the Belmont Rooms)
11:30 - 12:20
SOFTWARE PRESENTATION
Belmont 1

Introduction to Project Risk Management with @RISK
Rafael Hartke
Palisade Corporation

CASE STUDY
Belmont 2

Capital Project Cost Risk Modeling
Eric Ho
Arcadis

12:20 - 1:20
Lunch - Music City Ballroom (Level 2)
1:20 - 2:10
SOFTWARE PRESENTATION
Belmont 1

Finding Optimal Solutions with RISKOptimizer and Evolver
Dr. Raúl Castro
Palisade Corporation

CASE STUDY
Belmont 2

Applications of Monte Carlo Simulation in Business Valuation of Physician-Owned Entities
Jarrod Barraza, Stuart Neiberg
Healthcare Appraisers, Inc.

2:20 - 3:10
SOFTWARE PRESENTATION
Belmont 1

Data Analysis and Prediction with StatTools and NeuralTools
Gustavo Vinueza
Palisade Corporation

CASE STUDY
Belmont 2

Agile Risk Management
Susan Parente
S3 Technologies

CASE STUDY
Belmont 3

Optimization of Vessel Speed Using Probabilistic Simulation Techniques
Brent Way
Marine Institute of St. John's

Presenters

  Jarrod Barraza, MSF

Senior Associate
HealthCare Appraisers, Inc.

Mr. Barraza is a Senior Associate in the Firm’s Nashville office where his practice focuses on business valuation in the healthcare industry. Prior to joining HealthCare Appraisers, Mr. Barraza served as an intern at the Denver‐based business valuation firm, Harper Hofer & Associates.

Mr. Barraza holds a Master of Science in Finance from the University of Colorado at Denver and a Bachelor of Science in Music/Music Business from the University of Colorado at Denver.  Mr. Barraza passed all three levels of the CFA Program and may be awarded the charter upon completion of the required work experience.

Full bio and information at HealthCare Appraisers, Inc. website

  Luisarturo Castellanos

Trainer and Consultant
Palisade Corporation

Luisarturo Castellanos earned a bachelor’s degree in Actuarial Science by the Instituto Tecnológico Autónomo de México (ITAM), and a master’s degree in Statistics by the University of Warwick in the United Kingdom. His labor experience has been developed mainly in marketing research industry, as well as in the insurance industry, both in the private and public sectors. Among his most important projects figure the statistical design of the Parametric Agriculture Catastrophic Insurance, several risk assessment models for agriculture and livestock insurances and the stochastic modeling of tropical cyclones in Mexico. He currently owns CatRiskMexico, a consulting firm specialized in Modeling Catastrophic Risks such as drought, hurricane, and earthquake. Luisarturo is also a Palisade trainer and consultant.

  Dr. José Raúl Castro Esparza

Consultant and Professor
Benemérita Universidad Autónoma de Puebla

José Raúl Castro Esparza is a consultant and a full time professor at BUAP (Benemérita Universidad Autónoma de Puebla) in Puebla, Mexico where he co-founded the career of Actuarial Sciences. He earned his bachelor’s degree as an Actuary from Universidad de las Américas, Puebla (UDLAP), an MBA at Universidad Iberoamericana (IBERO) and a Ph. D. in Finance from Universidad Popular Autónoma del Estado de Puebla (UPAEP). Dr. Castro’s experience accounts for over 10 years in the chemical industry, working in the areas of Financial and Logistics Planning for companies such as Ciba-Geigy, Novartis Crop Protection and Syngenta. In the academic field he has taught for over 20 years a variety of Risk Analysis and Computer Modelling courses at a graduate and undergraduate level.

  Howard Duncan

Software Engineer
Palisade Corporation

Howard has worked as a software engineer at Palisade since 1999. His areas of responsibility include: @RISK Library, @RISK Reports, Time Series, Advanced Tools, and Excel Graphs. He has been involved in software and product development for 36 years, as a design engineer at Eastman Kodak, and as a development manager for Smith Corona Corporation. He has several U.S. patents related to process control and data encoding, and holds a BS in Mathematics/Computer Science.

  Mike Gallagher, MBA, PMP

Director of Communications and Protection
Tecolote Research

Tecolote has been a leading provider of cost estimating, financial management, scheduling, risk analysis, and earned value management services for complex acquisition, construction, and integration projects in DoD, DOE, Homeland Security, NASA, and various commercial entities for over 40 years. Mike is a certified Project Management Professional (PMP), who joined Tecolote Research after being honorably discharged as a Captain from the United States Air Force in 2007. He has over 16 years of program acquisitions experience and is currently the Director of Communications and Protection for Tecolote’s Space Programs Group.

He earned a Bachelor of Science 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.

  Chandra Gannavarapu

Senior Manager in Global Risk Analytics
LyondellBasell Industries

Chandra Gannavarapu is currently serving the role of Senior Manager in Global Risk Analytics group at LyondellBasell Industries. He lead the effort to establish this Global Risk Analytics group, for providing centralized financial risk analytics support, and managing the development and maintenance of financial risk models. He manages all the quantitative-based financial risk assessments and @RISK modeling efforts in areas such as commodity pricing, foreign exchange, interest rates and liquidity risk. Chandra has 25 years of experience in process modeling, advanced process control and optimization. Prior to this role, he served as the Business Solutions Lead at LyondellBasell’s Olefins Optimization group, worked at other companies including, Aspen Technology Inc., APC Consulting, and Dow Benelux, focused in the areas of modeling and advanced process control. He holds a Ph.D. in Chemical Engineering from the University of Sydney, a Master’s degree from Indian Institute of Science, and Bachelor’s degree from Osmania University.

  Clayton J. Graham

Management Consultant
Advantage Analytics, LLC

Clay Graham is currently a management consultant with Advantage Analytics, LLC and serves as an adjunct Professor at DePaul University.

Prior to his current undertakings, he owned and operated metal finishing companies in the Chicago area where he introduced effective statistical process control and engineering modeling technology. After selling his companies, he became the CEO of a floundering aerospace, laser mapping and engineering firm. He turned it around and was featured in Forbes for his efforts.

Before running his own companies, Graham worked as management consultant with A.T.Kearney,lnc. where he introduced cutting edge computer and mathematical modeling.

He has published extensively in the areas of: profitability, control, marketing, financial risk, computer integrated manufacturing and technology. Recently his paper on Sports Gambling won the business track competition at the prestigious MIT Sloan Sports Analytics Conference.

His formal education includes a B.S. from Purdue and graduate degrees in Economics (M.A.) and Business (M.B.A. - Kellogg School of Management, Northwestern University). He was a NASA Scholar (National Aeronautical and Space Administration) during his Ph.D. studies at Northwestern (concentration in advanced large-scale computer modeling and mathematical simulation.)

He has served as an Advisor to the White House, Members of Congress in the areas of economics, environmental control and management strategy.

  Dr. Huybert Groenendaal

Managing Director
EpiX Analytics

Dr. Huybert Groenendaal is a managing director at EpiX Analytics, a consultancy that helps clients use Monte Carlo simulation and probabilistic modeling in a broad range of industries and fields, ranging from financial risk analysis, business development, marketing, budgeting, inventory optimization, and pricing, to risk analysis in health. Dr. Groenendaal has extensive experience in risk modeling and analysis for business development, financial valuation, R&D portfolios and portfolio evaluations in pharmaceuticals and medical devices. Dr. Groenendaal also teaches a variety of risk analysis training courses including Financial Risk Modeling for Pharmaceuticals, Quantitative Risk Analysis, and Corporate Finance Risk Analysis and customized on-site courses. Dr. Groenendaal has an MBA in Finance from the Wharton School of Business and PhD from Wageningen University and is an adjunct faculty at Colorado State University.

  Rafael Hartke

Oil and Energy Industry Consultant
Palisade Corporation

Rafael Hartke is an Oil and Energy Industry Consultant at Palisade Corporation, where he works in the development and strategy of quantitative risk analysis methods. He has particular experience in the energy industry, having served as a Financial Engineer in Risk Management at Brazilian-based energy corporation, Petrobras in the Financial Planning and Risk Management department.  There, he created risk models for complex investments and assessed project risks for medium and large projects, including Brazilian Pre-Salt giant fields, projects in the Gulf of Mexico, and offshore infrastructure projects.  

Rafael has an MSc degree in Mechanical Engineering and is also a Global Association of Risk Professionals-certified Energy Risk Professional.
Rafael’s main interests and activities include:

  • Development of mathematical models in engineering and finance
  • Modeling of complex investment projects (risks, options, real options)
  • Monitoring, econometric modeling and forecasting of time series (commodity prices, commodity demands and financial series)
  • Research and training in risk analysis and Monte Carlo simulation

  Timothy J. Havranek, MBA, PMP

President
Optima Analytics, Inc.

Mr. Havranek is the president and owner of Optima Analytics, Inc. He has over 30 years’ experience providing strategic planning, project management, and management consulting services to the environmental remediation, natural resources, and manufacturing industries. He specializes in the application of multi-criteria decision analysis and probabilistic modeling for a wide range of projects including remediation, restoration, decommissioning, and alternative energy projects. He is a certified Project Management Professional (PMP) and author of the book Modern Project Management Techniques for the Environmental Remediation Industry published in 1999 by CRC Press.

  Randy Heffernan, MBA

Chief Operating Officer
Palisade Corporation

With over two decades at Palisade, Randy Heffernan has seen the company transform from a US-based provider of industry-leading Excel tools to a global powerhouse in the field of risk analysis and decision science. His history at Palisade has included management of sales, marketing, operations, infrastructure, legal and other functions. Randy spearheaded a number of notable company expansions, including the establishment of offices in Europe and Australia. More recently, his focus has shifted into product development and support, as well as strategic planning.

Randy holds a BS degree in Business Management and Marketing, and an MBA, both from Cornell University.

  Eric Ho

Senior Risk Manager
Arcadis

Eric Ho is a Senior Risk Manager with extensive experience in the construction consulting field, including roles in risk management, project management, cost management, scheduling, and project oversight. He has experience on various capital projects in an assortment of sectors, including infrastructure megaprojects. At Arcadis, he manages project life cycle risks and uses QRA to develop project contingencies, risk based project audits, and risk based design evaluations. He is a certified Risk Management Professional (PMI-RMP) and is currently serving on the CMAA sub-committee for risk management. He has a Master of Engineering (Meng) in Construction Engineering & Management and a Bachelor of Science in Engineering (BSE) in Civil & Environmental Engineering, both from the University of Michigan.

  Michelle Jackson

@RISK Product Manager
Palisade Corporation

Michelle Jackson began her career with Palisade 10 years ago when she joined Palisade’s Marketing Department. Within the last few years she has shifted her focus to Palisade end users ­- initially with BigPicture ­- and now with @RISK. She is a liaison between the developers, sales managers, trainers and users of @RISK and BigPicture. She also helps with providing consistent webinars to help share the many features @RISK has to offer. 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.

  James Knapp, MBA, PMP

Consultant
Tecolote Research

Jim is a former Acquisitions Officer for the United States Air Force. He has over 17 years of program experience with a background in Aircraft and Space Based operations. He is a skilled program manager who has worked with the government 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.

  Brendan McGrath, CFA, CPA

First Vice President, Director of Credit Risk Analysis
Federal Home Loan Bank of Indianapolis

Brendan McGrath is a First Vice President, Director of Credit Risk Analysis in the Enterprise Risk Management department at the Federal Home Loan Bank of Indianapolis, one of 11 U.S. government sponsored entities that support housing finance by providing liquidity to its member financial institutions. Brendan joined FHLBI’s investments team in 2000 and has experience in trading, fixed income portfolio management, mortgage analytics, risk management, and credit, market and operational risk modeling.

Mr. McGrath earned a CFA charter and a CPA license and for six years sat on the Board of Directors for the CFA Society of Indianapolis, including serving as its President from 2009-2010. Mr. McGrath earned a BS in Finance and an MS in Accounting from Indiana University’s Kelley School of Business and is also a member of the Beta Gamma Sigma honor society.

  Stuart A. Neiberg, MAcc, CPA, CFA

Partner
HealthCare Appraisers, Inc.

Mr. Neiberg is a Partner with HealthCare Appraisers and has an extensive background in healthcare business valuation and financial analysis.  His nine years of experience includes valuation of ambulatory surgery centers, healthcare systems and life sciences companies.  Prior to joining HealthCare Appraisers Mr. Neiberg held positions as manager of valuation services at WTAS, LLC in West Palm Beach, Florida, and as an associate with Deloitte and Touche.   

Mr. Neiberg holds a Master of Accounting from the Fisher School of Accounting at the University of Florida and a Bachelor of Science in Management with concentrations in Finance and Accounting from the A. B. Freeman School of Business at Tulane University.  He is a CFA charter holder and a certified public accountant (CPA) licensed in the State of California* and is a member of the Florida Institute of Certified Public Accountants, the American Institute of Certified Public Accountants and the CFA Society of Miami.

Full bio and information at HealthCare Appraisers, Inc. website

  Susan Parente

Principal Consultant
S3 Technologies, LLC

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 risk management, traditional and agile project 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 18+ years’ experience leading software and business development projects in the private and public sectors, including a decade of experience implementing IT projects for the DoD.

  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.

  Adam Sharpe

Project Manager
HDR Inc.

Adam Sharpe is a Utility Planning Practice Lead for HDR 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 Suite includes decision support for a 3,000-acre international logistics center, 50-year integrated water supply planning, long-range infrastructure planning, watershed and riverine analysis, and asset management models for long-term renewal and replacement of plant equipment.

  JD Solomon, PE, CRE, CMRP

Vice President
CH2M Hill

JD Solomon, PE, CRE, CMRP is a practice area leader and senior consultant with CH2M/Jacobs focusing on risk, reliability, and strategic decision making. Some of his areas of practice include infrastructure health and prognostics, financial management, operations and maintenance (O&M) optimization, and master planning. JD’s 2017 book, Communicating Reliability, Risk, and Resiliency to Decision Makers, is a practitioner’s guide for bridging the gap between technical analysis and decision making. He is a Certified Reliability Engineer (CRE), Certified Maintenance and Reliability Professional (CMRP), is certified in Lean Management, and is a Six Sigma Black Belt. JD has a Professional Certificate in Strategic Decision and Risk Management from Stanford, an MBA from the University of South Carolina, and a BS Civil Engineering from NC State University.

  Jan B. Smith, P.E., BSME

Senior Reliability Consultant
Zachry Industrial, Inc.

Jan B. Smith, P.E., BSME, is Senior Reliability Consultant with Zachry Industrial, Inc. He has a 50 year career in reliability engineering in the process industries. This includes establishing and managing reliability engineering departments for major companies as well as an independent reliability consulting company that he formed and managed for 16 years. His principle work includes RCA; finite element analysis; statistical and probabilistic analysis; vibration analysis; capacity and availability measurement and forecasting; FMEA; and RCM. He has chaired national and regional conferences on plant reliability, authored several technical papers on the subject, and has organized and taught seminars on reliability issues. He holds 3 patents based on new probability methods for repairable system availability and capacity.

  Dr. William Strauss

President
FutureMetrics, LLC

William Strauss is the President and founder of FutureMetrics, LLC www.FutureMetrics.com. Bill is globally recognized as a leading expert in the wood pellet sector. Bill continues to be a thought leader in the sector and has published numerous papers on a variety of subjects relevant to the wood pellet sector. He is also a founder and a Director of Maine Energy Systems www.MaineEnergySystems.com, the largest manufacturer of European style automatic pellet fueled central heating systems in North America. Bill has been named as one of the most influential leaders in the biomass sector in 2016 and again in 2017 by Argus Media, and is the 2012 recipient of the International Excellence in Bioenergy award. Bill is the chief economist for the Biomass Thermal Energy Council (Washington, DC). Bill has more than forty years of strategic and policy planning, project management, data analysis, operations, and modeling experience in the renewable energy sector. He has an MBA (specializing in finance) and a PhD (economics, earth systems science).

  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

  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.

  Brent Way

Instructor
School of Ocean Technology, Marine Institute of St. Johns, Newfoundland

Mr. Way is a professional engineer and instructor with the School of Ocean Technology at the Marine Institute in St. John’s, Newfoundland, Canada, where he is involved predominantly the Institute’s technology management degree programs. He is also a doctoral candidate with the Faculty of Engineering at Memorial University of Newfoundland, and his current research is focused on strategies for risk management in Arctic shipping and operations.

  Dr. Francisco J. Zagmutt, DVM, MPVM

Managing Director
EpiX Analytics

Francisco is a managing director of EpiX Analytics LLC. 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. Francisco has a Masters from UC Davis, and a PhD from Colorado State University, where he is also an adjunct professor.

  John Zhao

Risk Manager
Riskcore Ltd.

As a project professional, I have held positions of field engineer, construction coordinator, senior field cost engineer, and project risk and quality manager over the past 27 years in Middle East, Europe and Canada with contractors, EPC and owner firms. I am confident my experiences and knowledge in project interfaces, cost management, risk management and contracts administration will add values to organizations that wish to advance, expand and continuously improve itself.

As a freelance consultant or an independent contractor, I am confident that my rich experience and learning will add substantial values to your organization in the field of project management systems, project controls and project risk management.

Abstracts

Plenary Sessions

  Palisade Overview and the Next Generation of Risk Management

Randy Heffernan
Palisade Corporation

Palisade COO Randy Heffernan opens the conference by reviewing the event’s goals and how you can maximize your conference experience. He’ll give an overview of Palisade as a company for those who may not be familiar with us, and touch upon some of the most recent innovations we have brought to market through our @RISK and DecisionTools Suite products.

Next, Randy will shift focus to the larger field of risk management in general to see where it’s heading. From a traditional emphasis on compliance, insurance, financial reporting and legal risks, more and more firms are moving toward a strategic view of risk as it relates to many different functions. What’s more, companies are beginning to look at risk itself as an opportunity, revealing unexpected ways to enhance profits rather than just avoiding loss. Randy will share Palisade’s perspective on this trend, including some examples of clients leading this transformation.

  The Perception of Risk Through Rose-Colored Glasses

Robert C. Patev
US Army Corps of Engineers

The keynote will discuss how risk is perceived through the spectrum of decision makers within the US Army Corps of Engineers (USACE) risk programs. Insights will allow fellow risk assessors to see the levels of complexity needed to enter the reality of risk-informed decision making on critical civil works of infrastructure projects. This complexity delves down to how decision makers see and apply risk in their own worlds, and how we can use the basic building blocks to come to a common understanding of the nature of risk.

Software Presentations

  Introduction to @RISK

Dr. José Raúl Castro Esparza
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

Rafael Hartke
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.

  Selecting the Right Distribution for Use in @RISK

Michelle Jackson
Palisade Corporation

» Download the presentation

This session covers choosing 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.

  Exploring Custom Solutions using Palisade Technologies

Gustavo Vinueza
Palisade Corporation

Palisade Custom Development has written dozens of different types of specialized applications using the functionality of @RISK, PrecisionTree, TopRank, and other DecisionTools 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.

  Tips and Tricks for @RISK and The DecisionTools Suite

Michelle Jackson
Howie Duncan
Palisade Corporation

While many of the common features of @RISK have been explored in depth, there are some advanced and underutilized features that can add a lot of value to your modeling. This session will explain a number of tips and tricks, including: fitting distributions to output simulation data, custom reporting, filtering, and storing simulation data.

  Decision Modeling with PrecisionTree and BigPicture

Michelle Jackson
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

Rafael Hartke
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

Dr. José Raúl Castro Esparza
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

Gustavo Vinueza
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.

Case Studies

  Evaluating Plant Closure Options using @RISK

Timothy J. Havranek
Optima Analytics, Inc.

» Download the presentation

This business example demonstrates the use of @RISK to evaluate asset disposition alternatives for a copper mine nearing the end of its useful life. The challenges to developing an effective plan included uncertain future copper prices, uncertain remediation/restoration costs, ambiguous lease agreement language, community acceptance, and regulatory requirements. The alternatives that were evaluated included closure in one year; continued operations for the next ten years and then closure; and expanding mine operations.

@RISK was utilized to develop probabilistic financial and multi-criteria models for each alternative. The results showed the best strategy not only provided the highest stakeholder value, as determined by multi-criteria score, but also provided a savings of tens of millions of dollars over the next best alternative. The presentation will include a review of the model’s structure, inputs and the results obtained.

  Forecasting Asset Health and Renewal & Replacement Using @RISK

JD Solomon
CH2M Hill

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Owners of facilities and public infrastructure continue to be challenged to renew and replace their assets in the face of economic pressures. Most of the common models for asset renewal and replacement (R&R), or asset health management, rely on deterministic approaches with finite, best approximation inputs. Unfortunately, these deterministic approaches yield results that greatly overestimate, or in many cases greatly underestimate, uncertainty and risk. They have limited practical use and leave much value on the table. Probabilistic approaches using the Palisade DecisonTools Suite, including @RISK, provide a more meaningful and preferred methodology.

The presentation will include an overview of key technical considerations for modeling and forecasting asset renewal and replacement for facilities and public infrastructure. Both capital spending and maintenance funding aspects will be highlighted. Case studies from both the public and private sector will be provided, including review of forecasted and actual results 3 to 5 years after the original forecast for two of the case examples. A live demonstration of one of the models will be used to kick-off the presentation.

  Quantifying the Risk of Negative Outcomes in the Japanese and South Korean Industrial Wood Pellet Markets

Dr. William Strauss
FutureMetrics

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Approximately 16 million metric tonnes of industrial wood pellets will be used as a substitute for coal in large utility power plants to mitigate CO2 emissions. The majority of the market is currently in western Europe and England. However policies in Japan and S. Korea are driving rapid growth in demand for pellets in those countries that could double global demand in the next 5 years. This presentation will discuss those markets and the policies that support the substitution of pellets for coal. The presentation will show how the levelized cost of energy (LCOE) is calculated for a typical pulverized coal (PC) power station running on 100% coal. The LCOE is then calculated for the plant co-firing pellets with coal at 10% and 20% pellets/coal and also on 100% pellets. The revenues from power sales are enhanced by the policies in Japan and S. Korea to compensate for the higher cost of generation with wood pellets. But there are risks. We estimate probability distributions for a number of inputs to the model and we use @RISK to estimate the probability of the utility's bottom line going negative. This information is important to producers of industrial wood pellets. The buyers in Japan and S. Korea will need engage in long-term contracts so that the hundred's of millions of dollars in capital cost for new production capacity can be justified. Before those investments can be made, producers need to understand the risk that counterparty in the offtake contract face.

  Using @RISK for the Early Identification of System Failures of Interest and Long Term Trends in Failure Time Data

Jan Smith
Zachry Industrial, Inc.

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Analysis of repairable system failures traditionally happens after a problem has been identified and is not analyzed prior to there being a specific reason. This paper presents a concept and supporting methodology for a more value-added proactive data analysis approach now being used. This requires analysis before an issue is recognized in order to identify statistically significant issues at the earliest possible time.

The new failure data analysis method, using the Poisson distribution as a null hypothesis, allows Poisson probability values to flag data and data trends as potential issues of interest with probability values providing statistical strength of evidence. As new data arrives, analysis is done contemporaneously, not because there is a problem of interest, but to see if there may be a problem of interest.

The process must be efficient and automated to monitor thousands of assets in a typical petrochemical plant to find the few failures of interest each day. Each individual asset data set can be extremely small and problem trends are detected with typically one or a very few data points. This makes the probability distribution around the p-values of consideration. The combined flexibility of Excel with @RISK allows a single @RISK simulation to generate all probability distributions for p-values. For an asset with n number of failure times in its data set, the number of Poisson p-values and probability distributions x is x=n2/2, so the number of distributions can be quite large; therefore, efficiency is necessary for the large volume of analyses.

As with very short term trends above, the null hypothesis and Poisson analysis allows long term reliability growth or deterioration to be distinguished from random variation using data set residuals as a random variable. All Monte Carlo simulation that is possible is done within Excel, with results feeding what only @RISK can do. Again, a single simulation generates probability distributions to measure the likelihood that a trend can be explained by only simple random variation. Published data sets that proclaim to show long term trends are shown to be well within that produced by random variation alone.

  The Diamonds Edge: Using Evolver and NeuralTools to Make a Sport-Agnostic Betting Model

Clay Graham, Advantage Analytics, LLC
Dr. Sola Talabi, Pittsburgh Technical

With the additional lure of fantasy sports the proliferation of sports gambling has expanded worldwide to levels approaching $3 trillion annually . Modeling sports has become an essential element of the professional gaming investor. Multiple regression, Monte Carlo simulation, mega data bases and hot tips from the Gnome of Zurich have been widely popularized for predicting game outcomes.

Such traditional methods can yield fine results yet be cumbersome in structure and quite time consuming to implement on a daily basis. Likewise, these techniques are usually sport dependent, i.e., a baseball model will not necessarily be compatible with one designed for basketball.

A ubiquitous model has been created by integrating artificial intelligence (AI) in the form of a neural network (modeling the game) and genetic programing to optimize the dynamics and economics of profit. The model(s) may be applied to any sport with a significant number of games over the season, e.g., baseball, basketball and hockey.

The art and science of constructing a model utilizing Neural Tools and Evolver will be detailed. Operational results from “AI” will be compared with respect to more traditional methods.

  Determining Contingencies for Megaprojects with @RISK

John Zhao
Riskcore Ltd.

» Download the presentation

To provide an appropriate contingency for a complex $7 billion mega project requires the combination of competent QRA practitioner and a reliable Risk Model. Neither specific risk ranging method nor systemic risk quantification alone would work in this case, as the project stretches 700 miles long with a variety of contract models, and had to be broken into four distinct subprojects attracting geopolitical uncertainties, engineering challenges and execution risks.

Using the Riscor Model, which is built on Palisade @RISK simulation platform, the author integrated qualitative risk register with quantifiable systemic risks to derive aggregated cost impacts to each subproject's objectives using Binomial Distribution. Numerous risk workshops were facilitated to select, range and simulate specific risks related to each subproject's cost estimate variables, such as quantities, productivity, exchange rates, design hours or materials quotes.

Contingency also captured extra costs due to construction schedule delays. The SRA results were taken as inputs to Riscor Model, and contingency amounts dedicated to schedule delays were convincingly derived.

The combined final project contingency at a given confidence level from systemic risks, specific risks and schedule delays was a mixture of positive and NEGATIVE contingency which is very rare in capital project world. The paper explains how the difficult interfaces, integration and unpredictable human behaviors are successfully incorporated into one massive Quantitative Risk Analysis (QRA) for an independent audit review and board approval.

  Can you mix apples and oranges? Populating your models with diverse sources of information

Dr. Francisco J. Zagmutt
EpiX Analytics

» Download the presentation

Data is king…, except when scarce, unavailable, or irrelevant to what you want to predict, which is not an uncommon situation to any risk modeler. For example, you may have 30 years of very accurate sales records but those data don’t incorporate the effect of a new competitor’s product that is about to launch, or new regulations, which you know are key to your mid-term sales forecast. How can you leverage these data with insight from your internal experts?

One of the differentiating aspects of simulation modeling is its potential to incorporate various sources of evidence, but the methodology to blend evidence is often obscure and fast evolving. During this hands-on talk, we will use real-life examples and practical models to demonstrate how to combine multiple sources of data, blend expert opinion with data, combine different expert estimates, and even how to incorporate competitive distributions into your @RISK model.

  Risky Enterprise: How to Perform Risk Assessments on Enterprise Schedules Lessons Learned using @RISK on DoD and DOE Projects

James Knapp
Michael Gallagher
Tecolote Research, Inc.

» Download the presentation

Enterprise schedules are moving forward as a key discriminator in how large portfolio management is accomplished. We intend to express the importance of portfolio management and demonstrate how @RISK has been a key tool in how cost, schedule, and technical risks are conveyed to all levels of management. Moreover, our goal is to state how that by using @RISK, we are able to provide senior leaders the ability to make better informed, data driven decisions, that have a direct impact across the enterprise.

This presentation will share past Department of Defense (DoD) and Department of Energy (DOE) experiences related to enterprise schedules. We will share how Tecolote utilizes @RISK to perform enterprise schedules risk assessments. Additionally, we will convey how the outputs generated by @RISK offers valuable insight to our government customers to successfully manage their portfolios.

  Exploring Oil and Gas Applications of @RISK and the DecisionTools Suite: Examples from Petrobras and Others

Rafael Hartke
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.

For many years, Rafael Hartke solved these types of problems at Petrobras, the state oil company of Brazil and one of the world’s largest producers. He will draw on his experiences to demonstrate how @RISK and the DecisionTools Suite can be applied to common types of issues faced by oil and gas producers, such as: estimation of unknown reserves, analysis of multi-play concessions, structure of complex partnership agreements, optimization of uncertain project portfolios, and more.

  Using NeuralTools: A Practitioner's Guide to Unleashing the Power of Artificial Neural Networks

Brendan McGrath
Federal Home Loan Bank of Indianapolis

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Artificial neural networks (ANNs) have become one of the most powerful methods used in the field of artificial intelligence and modern-day analytics. Machine learning has given many businesses a competitive advantage but typically requires significant technical knowledge and expertise. However, NeuralTools gives users the power of machine learning combined with the ease of use and familiarity of Excel.

This presentation will provide an easy-to-understand overview of NeuralTools and ANNs. You will learn about what types of problems they are effective at solving, their biological inspiration, fundamental concepts of how they work, their potential advantages and disadvantages, and examples of real-world applications. To illustrate the mechanics and advantages of ANNs, this presentation will also show you how to use NeuralTools to perform handwriting analysis and recognition in Excel, analyze bank failure data, and more.

  Using Time-Series Features in @RISK for Advanced Modeling

Chandra Gannavarapu
Lyondell Basell

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The time-series modeling provides a powerful statistical way to understand the behavior of an entity, and to forecast it's future behavior. When it comes to oil and gas industry, where future commodity prices are critical to business decisions, the time-series models are even more important. However, there are several challenges to fitting a decent time-series model to the data. The objective of this study is to provide a systematic procedure to build time-series models in @RISK software, and also suggest some future development options that could bring more value to this exercise.

  Insurance and Reinsurance Applications of @RISK: Examples from Agroasamex and the World Bank

Luisarturo Castellanos
CatRiskMexico / Palisade Corporation

@RISK is one of the most widely used tools by actuaries in the insurance and reinsurance industries. In surveys, the only software more commonly used in the sector are Microsoft Office and proprietary, in-house actuarial programs.

@RISK has a number of applications in this area, among them:

  1. the determination of optimal insurance and reinsurance strategy;
  2. setting the appropriate premiums to charge; and
  3. estimating the proper amount of capital to have in reserves to pay out future claims.

Luisarturo Castellanos has been using @RISK for these types of applications for many years. He has worked as an actuary and risk manager planning for catastrophic risks at Agroasamex, the state agricultural insurance agency of Mexico, and on projects for the World Bank and other clients. In this session, Luisarturo will draw on his experience to walk through a number of real-life examples demonstrating how @RISK can be used to make better insurance decisions.

  Capital Project Cost Risk Modeling

Eric Ho
Arcadis

» Download the presentation

Risk modeling is often used on large capital projects to predict potential outcomes to a project’s cost and schedule. The primary purpose for the quantitative risk analysis is to set the project’s cost and schedule contingencies, and to identify the top risks and uncertainties to the project. However, proper techniques regarding modeling of risks and uncertainties, and the need to have an integrated cost and schedule, are not often followed.

The aim of the presentation is to show a step-by-step process of a cost risk model using @RISK. The process will (1) outline the need to validate and strip the baseline cost estimate, (2) ranging of the uncertainties to the deterministic values, (3) uncertainty factors for productivity, (4) uncertainty factors for market conditions, (5) discrete risks from a risk register, and (6) integration with a schedule risk model.

The presentation will use a generic project estimate to show how @RISK can model the risks and uncertainties. Output data from a schedule QRA will be incorporated into the cost model to show how it can be integrated with the cost model.

  Making Effective Use of DecisionTools Graphics: Tips, Pointers, and Pitfalls

Adam Sharpe
HDR Inc.

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You have just spent weeks doing a complex analysis. The results are in. The conclusions are significant. It is now “show time” – that big meeting where you must share your work with decision makers and cross-functional team members who understand little about what you do. Will those default graphics in the Palisade DecisonTools Suite be enough to effectively communicate your point?

This presentation will provide tips, pointers, and pitfalls related to the graphics associated with the Palisade tools, including @RISK, PrecisonTree, BigPicture, and StatTools. Case examples from the finance, energy, water, and biopharmaceutical sectors will be utilized. The presenter will use live demonstrations in the DecisionTools Suite to show how to develop and modify key graphics. A summary handout of tips and pointers will be provided.

  Applications of Monte Carlo Simulation in Business Valuation of Physician-Owned Entities

Stuart Neiberg
Jarrod Barraza
HealthCare Appraisers, Inc.

» Download the presentation

Business valuation often involves generating financial projections and discounting these projections to a single present value using a “discount rate” to estimate the economic value of a business or business interest. Within the healthcare industry, business valuation faces additional challenges due to the sophisticated and dynamic regulatory framework the industry operates within, creating a need for expertise and defensible business decisions. One must also consider the “human element” in healthcare, given that care is delivered on a personalized scale by individual providers such as doctors, physician assistants, and nurse practitioners. Businesses regularly face decisions such as whether to expand to additional service lines, add locations, change staffing structure, and the like, creating path dependent scenarios for which Monte Carlo Simulation can be an effective analysis tool. To that end, we present a brief case study in which we utilized @RISK software in our business valuation analysis of an ambulatory surgery center facing multiple path dependent scenarios.

  Getting more value out of @RISK: Lessons from several case-studies

Huybert Groenendaal
EpiX Analytics

» Download the presentation

@RISK has broad applicability with rich features to enable modeling in a wide range of situations and industries. The talks during this conference provide us with many interesting and practical examples.

But the value of @RISK is not primarily in its features. The true value is informed and improved decision-making within your organization. Why, then, are so many important decisions with uncertain outcomes not supported by Monte Carlo simulations?

In our experience, users of @RISK often fail to reach their full potential in decision support. In this presentation, we will examine several case-studies that highlight opportunities for improved use of @RISK as a decision support tool. Attendees will get a range of practical modeling tips and higher-level insights into how their organizations can capture even more value through smart use of @RISK.

  Agile Risk Management

Susan Parente
S3 Technologies, LLC

» Download the presentation

In today’s world of fast paced technology and continually changing requirements and project scope, the need for Agile Project Management has greatly increased. This calls us to ask how do standard critical project management methodologies like Risk Management fit into Agile Practices.

What is Agile Risk Management and when does it make sense to use it? How Qualitative Risk Analysis relates to Agile and how it is incorporated into Agile Practices will be evaluated. Recommendations for implementing Agile Risk Management will be provided along with best practices and how organizations are applying this into practice.

Risk Management is not only a practice and discipline, it is an Art. Knowing the tools and techniques is not sufficient for success. The nuances of how Risk management is incorporated into agile practices is what generates project success. When requirements and environmental conditions are in flux, our ability to anticipate Risk and plan for it, is critical to managing projects with agility.

  Optimization of Vessel Speed Using Probabilistic Simulation Techniques

Brent Way
School of Ocean Technology, Marine Institute of St. John's

While previous studies have examined the economics of shipping from Europe to Asia via the Northern Sea Route (NSR) versus the Suez Canal Route (SCR), most have not adequately accounted for the variability in input parameters such as the cost of fuel or the amount of ice encountered on a voyage. Furthermore, no prior study has attempted to utilize speed optimization as part of the analysis.

Because the rate fuel consumption for propulsion is intrinsically linked with vessel speed, reducing speed can create the potential for large savings in fuel costs, along with the added benefit of reduced emissions. However, the reduced speed means a longer transit time, meaning increases in other time based costs, such as daily pay for a ship's crew. The question then becomes what is the optimal speed?

This paper examines the use of speed optimization to determine whether it is potentially more profitable for a container shipping company to ship from Rotterdam to Yokohama through the SCR year round (Option A) or to ship through the NSR during the months it is passable while using the SCR for the remainder of the year (Option B). A probabilistic Monte Carlo model is presented (using @RISK) to determine average per trip profits for both options A and B. This model is used in conjunction with a simulation optimization technique (RiskOptimizer) to determine the optimum speeds to maximize average per trip profitability for each option. The results show that probabilistic simulation optimization of vessel speed may better inform shipping companies as to the financial impacts of the speeds that they choose to use for shipping and thus enable better decision making as it pertains to both route choice and ships' speeds. The analysis indicates that speed optimized container shipping year round through the Suez Canal appears to be the more profitable of the 2 options.

Renaissance Nashville Hotel

The 2017 Palisade Conference will be held at:

Renaissance Nashville Hotel
611 Commerce Street
Nashville, TN 37203

Book your Special Rate room for the Palisade Risk Conference

The special rate is $259/night, available 11/12 - 11/17
Book by 10/20 - Limited rooms available.

- Reserve online here
- Call +1 615-255-8400

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