case study:
At Pantektor, @RISK Responds to Fire Safety
Safety management is an essential element in averting disaster in the event of fire. Although the majority of premises will never have a serious fire, the consequences of such an event are so severe that it is critical that fire safety procedures are rigorously planned for. Managing fire safety begins with the initial design of a building but also includes safety systems and plans to minimize damage.

:: @RISK Helps Reduce Fire Risk
Pantektor AB, a Swedish-based global construction consultancy company,

@RISK and Pantektor Catch the Attention
of UK Press

The Pantektor story has caught the interest of the UK press. Building Engineer and What’s New in Building, two influential journals for the building trades, have scheduled publication of the complete story of @RISK and fire safety. The software’s capacity to simulate the likelihood of fire is of particular interest in the UK right now because builders there are concerned about complying with tighter new legal standards for fire safety enacted last year.

specializes in risk analysis associated with fire, the handling of flammables, explosives and chemicals, and dust explosions. Pantektor fulfills the specific needs of each client while meeting local building code requirements.

The fire risk of a building is calculated from the likelihood of fire occurring, and from the impact of fire on a building or facility and its people. Pantektor determines this using @RISK.

Fire management variables are input into an @RISK model, along with other historically typical ‘fire starters’ and their likelihood of occurrence. Examples of fire management variables include: fire resistance of surface material lining; load-bearing capacity of structures under heat; and heat generated by machinery. Other factors are also built into the model including, for example, the attitudes of facilities managers.

The resulting @RISK analysis enables Pantektor to define the best and most cost-effective fire protection strategy. @RISK’s sensitivity analysis, which identifies the variables that have the greatest impact if they are changed, augments the analysis.

:: @RISK Helps with Building Modernization
In addition to ensuring safety standards are met for new buildings, Pantektor also assesses fire safety for existing structures and facilities. A growing number of environmental restrictions and stringent national regulations that were not in effect when older buildings were first erected must now be accounted for. Analysis with @RISK determines the initial fire risk, and enables Pantektor to recommend suitable measures that will bring the building up to required regulatory standards.

:: @RISK Builds in Uncertainty for More Accurate End Result
Pierre Palmberg, Fire Protection Engineer and Senior Consultant at Pantektor explains: “It is human nature to want to reduce risk to zero, but life is built around uncertainty and risk analysis tools must be flexible enough to allow for this. One of @RISK’s key strengths is that it measures probabilities in terms of variables rather than fixed numbers – so the probability of X event occurring is expressed as a distribution function. If uncertainty is not factored in from the start of a project, the eventual result can be hugely inaccurate - and therefore potentially fatal.” Palmberg concludes: “@RISK’s power and flexibility, though not completely removing the risk of fire, help us with the critical task of managing that risk in a cost-effective way.”

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INDUSTRY APPLICATION:
Palisade Software in Agriculture
Agriculture is one industry where the business selling the product doesn’t set the price point. Prices result from a complex set of factors that include weather, government, and international trade. Small wonder, then, that corporate farmers, the consultants who advise them, and agricultural economists often turn to Palisade software to get a more accurate fix on agricultural prices and farm income.

:: Anticipating Prices
In Australia, for example, wool is crucial to the national economy, and vast amounts of it are sold in individual lots via auctions across the country. Both wool producers and buyers want to know what to expect at auction time. Wool comes in so many different types and “sizes,” that sales information from the auctions amounts to vast datasets. Taking advantage of all this information, one industry analyst uses NeuralTools to work through the huge volume of sales data and to model the prices that can be anticipated for various types of wool at particular auction locations. NeuralTools “learns” pricing patterns on a limited set of the data, applies these patterns to a much larger dataset, and generates numerical predictions for the prices of various types of wool. With each addition of new sales data, the NeuralTools network becomes denser and more sophisticated, and its predictions more accurate.

:: Predicting Farm Income
In South America, large family-held farm corporations use @RISK to help them plan their crop operations for each year. Borrowing a strategy from investment advisers who create portfolios of stocks and bonds to manage risk and opportunities, these businesses use @RISK to create similar analyses of their farming operations. They use inputs for weather, type of crop, planting technique, land costs, and historical price data, to model the yield and return across their entire “portfolio” of farming operations. The @RISK models guide their decisions on how much land in which areas to farm, what to plant, and the amount of income to expect.

In the U.S., government programs are a supplementary source of income for farmers and are used to both reduce farming risk and enhance its rewards. Some programs provide price protection, others give a direct subsidy, and still others subsidize the purchase of crop insurance. Which of these schemes is most effective? Economic researchers at Purdue and Cornell used @RISK to model the effects of a number of individual programs on farm income and then to simulate the outcomes if all the programs were combined. The @RISK results demonstrated that crop insurance subsidies would be most effective, but even more important, the simulations revealed how the programs interact with each other.

:: Expanding Simple Models
One thing these examples from agriculture make clear is the capacity of the Palisade tools for easy expansion and refinement. The users have started with simple models and added information until the resulting models accurately reflect the complex forces at work throughout the agricultural markets.

read Cornell/Purdue case study
learn more about NeuralTools
learn more about @RISK
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Product Spotlight:
@RISKAccelerator Puts the “Pedal to the Metal” Available by Itself or with @RISK Industrial
@RISKAccelerator is designed to handle large, time-consuming @RISK simulations quickly and efficiently by maximizing the use of available hardware. By using @RISKAccelerator in conjunction with @RISK for Excel, users can not only run simulations on large models in a timely fashion, they can also generate mission-critical data for on-the-spot decision making.

:: Incredible Speed Increases and Ease-of-Use
Large models with long recalculation times will especially benefit from @RISKAccelerator's speedup. @RISK simulations are "split up" and sent out to available computers over a network or to multiple CPUs within a single machine. @RISK Industrial includes @RISKAccelerator functionality for multiple CPUs within the same machine. By "scaling" @RISKAccelerator up to 2, 4, 10 CPUs or more, users will see an incredible speedup in simulations. Although actual speed increases will vary depending on the model type and computer, network and server configurations, all @RISKAccelerator users will experience a marked decrease in simulation runtimes.

Using @RISKAccelerator is as simple as using @RISK. After loading your @RISK model, click the Simulate icon to start a simulation and @RISKAccelerator takes over. Any valid @RISK for Excel model can be used with no changes or extra setup required. No hardware modifications are required for computers on the network or server utilized in the simulation.

:: How @RISKAccelerator Works
@RISKAccelerator uses the technique of "parallel processing" for speeding up simulations, either by using the multiple CPUs found in a single machine or over a network. Each computer runs its portion of the simulation concurrently with the others, sending results back as they are completed. When the entire simulation is completed, all results are merged back together and the results are displayed just as they are in a standard single-processor version of @RISK.

During the simulation, an @RISKAccelerator monitor window appears showing the status of the available CPUs in real time. This enables you to see how many iterations of your simulation have been run on each CPU, and lets you watch as @RISKAccelerator "delegates" the simulation to various CPUs as they become available.

:: @RISKAccelerator Features

• Use multiple processors in the same machine or in different machines over a network.
• @RISK Industrial includes @RISKAccelerator functionality for multiple CPUs in the same machine.
• Simulation results the same as those obtained from a standard single-processor version
  of @RISK.
• Simulations are as scalable as possible, so increasing the number of processors reduces the simulation time proportionally.
• Multiple users may submit simulations to the same group of PCs running
  @RISKAccelerator simultaneously.
• As easy to use as @RISK.
• All work is transparent to user.

learn more about @RISKAccelerator
learn more about @RISK Industrial

2007 User Conference North America continued from above
Beautiful, sunny Miami Beach provides the backdrop for the 2007 Palisade User Conference North America on October 25 and 26. The event will feature keynote speaker Dr. Wayne Winston, as well as a cadre of risk professionals and luminaries from around the world.

:: World Class Setting, World Class Delegates
Hosted at the Alexander All-Suite Oceanfront Resort, this year’s venue is located on Millionaire’s Row and is only minutes from South Beach, Bal Harbour, and the Art Deco district. The hotel’s elegant meeting space and setting act as an ideal complement to this two-day risk and decision analysis forum.

Experience real-world case studies from industry experts, hands-on software training, and best practice sessions. Rub elbows with top level consultants and industry leaders from across the spectrum of business and research. Register now for the special early-bird rate of only $295 – that’s $200 off the regular price. Book your room at the Alexander now and enjoy the special conference rate of only $199 per night – over 35% off the regular rate! Call the Alexander at 800-327-6121 or
e-mail your request, and be sure to mention the Palisade User Conference.

:: Keynote: Dr. Wayne Winston
Palisade Corporation is delighted to introduce Dr. Winston as keynote speaker. Dr. Winston is a professor in the Operations and Decision Technologies department at the Kelley School of Business at Indiana University in Bloomington. He has been teaching for thirty years, and consistently receives national recognition for excellence in business education. He specializes in spreadsheet modeling and DecisionTools Suite software applied to operations research. The author of several books, Dr. Winston regularly teaches Excel to Microsoft staff, and is a highly-regarded consultant for Fortune 500 outside of the academic community. He has degrees from MIT and Yale.

:: Why Attend?

• Experience DecisionTools Suite 5.0 and @RISK 5.0.
• Learn how to use NeuralTools neural networks software for predictive spreadsheet models.
• See how StatTools statistical analysis software can help make better decisions.
• Explore case studies to apply real-world solutions to your problems.
• Bring your own modeling questions for expert advice.
• Network with other professionals facing similar issues.
• Come away with new innovative approaches to your own persistent problems.
• Provide feedback directly to Palisade development staff.
• Extend your stay and explore the wonders of Miami.

:: Meet Palisade Engineers
Palisade’s top software engineers will be on-hand for exciting roundtable discussions. You’ll be able to provide feedback about Palisade tools and seek advice for your particular modeling issues. So bring your wish list and get to know the people behind @RISK, the DecisionTools Suite, and NeuralTools.

learn more about the conference
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Ask Amy continued from above

“Multicollinearity” is defined as “the presence of a fairly strong linear relationship between two or more explanatory variables”, and it can make estimation difficult. Consider the following example. It is a very simple example, but it definitely serves the purpose of demonstrating the warnings of and how to deal with and recognize multicollinearity.

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KnowledgeBase articles about Palisade Software

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