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Palisade Corporation



In This Issue
What’s New
» Try @RISK 5.0 at the Palisade User Conference
» DecisionTools Suite for
Excel 2007

» Free Live Webcast:
Nonlinear Feedback Loops using @RISK

Case Study
» @RISK in Corporate
Finance at Illinois State

Product Spotlight
» Modeling in
@RISK for Project

Palisade Analytics
in the Press

» Browser Technology
» Consumer Banking
» Educational Testing
» Image Data Processing
» Finance
» Financial Planning
» Linguistics
» Public Health
» Sports
» Weather Forecasting

Ask Amy Tech Tips
» How do I view the effect of changes to parameters on more than one distribution?

2007 Palisade User Conferences
» Asia-Pacific
13-14 September
Sydney, AU
» North America
25-26 October
Miami Beach, USA
» Latinoamérica
el 26 y el 27 de noviembre
San José, Costa Rica
» Europe
22-23 April 2008
London, UK


Live chat Click
to chat live
with a sales
representative


Free Webcasts
Case Study
» Nonlinear Feedback Loops using @RISK: Adding Uncertainty to a Dynamic Model of Oil Prices
13 September
11am-12pm ET / 4-5pm GMT


Regional Seminars
» North America
St. Louis: 11-12 Sept
Chicago: 18-19 Sept
Toronto, ON: 27-28 Sept
Las Vegas: 4-5 Oct
Detroit: 9-10 Oct
San Antonio: 12-13 Nov
New York: 29-30 Nov
Portland: 3-4 Dec
Baltimore: 10-11 Dec

» Brazil
São Paulo, Brasil
  (no português):
  3-5 Setembro
Salvador, Brasil
  (no português):
  27-28 Setembro

» Europe
Frankfurt (auf Deutsch):
  13 Sept
Paris (en Français): 25 Sept
London: 27-28 Sept
London: 9 Oct
London: 25-26 Oct

» Latinoamérica
Guayaquil, Ecuador
  (en español):
  del 16 al 18 de octubre

» Asia-Pacific
Perth: 1-2 Nov
Sydney: 15-16 Nov
Melbourne: 22-23 Nov
Sydney: 13-14 Dec


Live Web Training
» Risk and Decision Assessment Training using @RISK, Part I
10-11 September, 1-5pm ET
1-2 October, 1-5pm ET
5-6 November, 1-5pm ET
10-11 December, 1-5pm ET

» Risk and Decision Assessment Training using @RISK, Part II
20-21 September, 1-5pm ET
4-5 October, 1-5pm ET
8-9 November, 1-5pm ET
13-14 December, 1-5pm ET

» Project Risk Assessment using @RISK for Project
1-2 November, 1-5pm ET


Trade Shows
» North America
PMI Global Congress 2007 – North America
6-9 October 2007
Atlanta, GA
Booth #711

Society of Actuaries Annual Meeting and Exhibit
14-17 October 2007
Washington, D.C.
Booth #506

INFORMS Annual Meeting 2007
4-7 November 2007
Seattle, WA

SPE Annual Technical Conference and Exhibition - 2007
11-14 November 2007
Anaheim, CA

38th Annual Meeting of the Decision Sciences Institute - DSI 2007
17-20 November 2007
Phoenix, AZ

» Europe
IRM Risk Forum
11-13 September 2007
Conference Hertfordshire, Hatfield, UK

FERMA
30 Sept - 3 Oct 2007
Geneva

BPPM
17-18 October 2007
Birmingham

European Banking and Insurance Fair
20-22 November 2007
Frankfurt

» Asia-Pacific
Risk Australia
25-26 September 2007
Sydney

ISEC Conference
26-28 September 2007
Melbourne

AIPM
7-10 October 2007
Hobart, Tasmania

PMI New Zealand
17-19 October 2007
Wellington, NZ

International Conference on Operations and Quantitative Management
17-20 October 2007
Bangkok, Thailand

AusBiotech 2007
21-24 October 2007
Brisbane

SPE Asia Pacific Oil and Gas Conference
30 Oct - 1 Nov 2007
Jakarta, Indonesia

RMIA
25-27 November 2007
Gold Coast


Free Trial Versions
Palisade software is available in fully functional free trial versions. Try @RISK or any of our software today!

The DecisionTools Suite
The complete risk and decision analysis toolkit

@RISK
The world's most widely used risk analysis tool
@RISK
» @RISK for Excel
@RISK» @RISK for Project

PrecisionTree
Visual decision analysis for spreadsheets

NeuralTools
Sophisticated neural networks for spreadsheets

StatTools
Advanced statistical analysis for spreadsheets

RISKOptimizer
Optimization with simulation for spreadsheets


The DecisionTools Suite






Try @RISK 5.0 at the
Palisade User Conference
Miami, October 25-26, 2007
Still Time for Papers; Book Room for $199 Now
The brand-new @RISK 5.0 will be presented at the Palisade User Conference in Miami by Palisade President Sam McLafferty, and hands-on training sessions will be offered using the new software. Experience the stunning new interface, powerful analyses and unprecedented sharing capabilities of this exciting new release.

With sessions already planned on topics like utilities regulation, demand forecasting, environmental cleanup, and energy risk assessment from companies like Suncor, BC Hydro, and FutureMetrics LLC, attendance is on track to beat last year. Check out the program and register today.

There are still a couple slots available for presenting case study applications of Palisade software. If you have a case study you’d like to share on your use of @RISK, PrecisionTree, NeuralTools, or any other product, we’d love to hear from you.

Submit case study proposal
» View conference schedule
» Register today for only $495 $295

$199 Hotel Rooms Going Fast
Book your room today at the beautiful Alexander All-Suites Oceanfront Resort, site of the Palisade User Conference. Suites are available for only $199 per night, but are very limited! Reserve yours today:

» reservations@alexanderhotel.com
   800-327-6121 or 305-865-6500


DecisionTools Suite for Excel 2007
The DecisionTools Suite is now compatible with Excel 2007. Existing users with current maintenance plans can get a FREE update for their covered software. Students and faculty can also get a free update. This update applies to all editions of the DecisionTools Suite—Standard, Professional, and Industrial—as well as both commercial and academic versions.

The DecisionTools Suite 4.5.7 update will make the following component products compatible with Excel 2007:

  • @RISK 4.5
  • PrecisionTree
  • RISKOptimizer
    (Industrial edition of DecisionTools Suite only)
  • BestFit
  • RISKview

Updates for these products are also available individually.

If your maintenance plan has lapsed and you are not a student or faculty member, there is a $500 charge for this update.

Trade Shows

100% Excel
@RISK simulations are calculated 100% within Excel, supported by Palisade sampling and statistics proven in over twenty years of use.
Palisade does not attempt to rewrite Excel in an external recalculator to gain speed.
A single recalculation from an unsupported or poorly reproduced macro or function can dramatically change your results. Where will it occur, and when? Palisade harnesses the power of multiple CPUs and multi-core processors to give you the fastest calculations. Correct results—and fast—using @RISK!


Free Live Webcast:
Nonlinear Feedback Loops using
@RISK: Adding Uncertainty to a
Dynamic Model of Oil Prices
Learn about nonlinear feedback loops that add uncertainty to your models in this FREE live webcast on Palisade.com. Presented by William Strauss, President, FutureMetrics. Nonlinear feedback loops describe many of the processes that make up the real world, with resulting rising and falling patterns with overshoot (feast or famine). The oil sector is best modeled using systems of differential equations due to positive and negative feedbacks and the slow responses of the supply side (exploration, production) to price signals and shocks. Long-term trends are accompanied by cyclic price fluctuations that also influence demand. Interacting feedback loops make the system complex. Using @RISK, we'll see the many potential future oil price paths along with more or less probable outcomes.

Register now for FREE Live Webcast:
"Nonlinear Feedback Loops using @RISK:
Adding Uncertainty to a Dynamic Model of Oil Prices"
13 September 2007, 11:00am - 12:00pm ET / 4:00 - 5:00 pm GMT


Case Study

@RISK in Corporate Finance
at Illinois State
Dr. Domingo Castelo Joaquin at Illinois State University teaches Advanced Corporate Finance in a special MBA program for executives and managers from Archer Daniels Midland and other neighboring firms such as Caterpillar. Students use @RISK to learn advanced financial analysis techniques using Monte Carlo simulation.

Dr. Joaquin holds advanced degrees in theoretical statistics and business administration, and he is an advocate of Monte Carlo simulation and @RISK because they offer a pragmatic approach to dealing with the uncertainties that are inherent in any business decision. He guides students in using @RISK to address an array of thorny problems in real options analysis—his area of research specialization—as well as in capital budgeting, cash budgeting, capacity planning, and international portfolio diversification.

» Find out how Dr. Joaquin answers questions like “Which distribution do I use?” and “How do I convince my boss that the simulation is credible?” Plus: test your knowledge on a capital budgeting problem.


Product Spotlight

Modeling in @RISK for Project
Have you ever worked on a multimillion-dollar project where the project plan was little more than a collection of guesses? Projects are always finishing late or over budget because the project manager had no tools to assess and manage risk. @RISK for Project helps project managers realize the effects of uncertainty, communicate realistic project forecasts and allocate resources effectively.

@RISK for Project is an add-in to Microsoft Project that uses Monte Carlo simulation to represent thousands of different outcomes in your project plans. More than any other software package, @RISK for Project makes representing your project easy—and accurate.

38 Distribution Functions - @RISK for Project offers 38 probability distribution functions to help to accurately describe uncertain costs, durations, or other variables.

Distribution Fitting – Not sure which distribution function to use? @RISK for Project can read historical data on a particular variable and give you the exact distribution function that best fits your data.

Probabilistic Branching - Probabilistic branching lets a project branch from one task to any number of other tasks during simulation. Account for chance events in your project plans and see the impact on your outputs.

IF/THEN Conditional Branching - Build logic into your project plans. With IF/THEN Conditional Branching, if a pre-defined condition occurs during simulation, @RISK for Project will change a project value or branch to another task. Control values and branching between tasks using logic statements that you define.

Probabilistic Calendars - Often you need to model the probability of work stoppages due to weather, strikes, or other unforeseen events. By setting up Probabilistic Calendars with @RISK for Project, you can apply working and non-working probabilities to any calendar event in Project.

» Find out more about @RISK for Project


Palisade Software Techniques in the News

Browser Technology

» A search engine "listens" to music to help you
find new tunes

Technique: Neural networks   » see NeuralTools
Source: Ars Technica, August 14, 2007

Help for those looking for new music may be on the way in the form of a search tool funded by the National Science Foundation that is claimed to identify aesthetic similarities between pieces of music. It is a “similarity search engine,” based partly on neural networks.

Consumer Banking

» Banking Contact Centers Beat Internet for
Customer Service

Technique: Neural networks   » see NeuralTools
Source: CRMToday, August 22, 2007

A large internet-based service provider found that, in the UK banking industry, it is faster to phone contact centers for basic information than to use the internet. Furthermore, only 30% of banks had implemented natural language eService solutions that use neural network technology to analyze questions in order to find the best response.

» Terminal-Based Debit Fraud Control
Technique: Neural networks   » see NeuralTools
Source: DigitalTransactions.net, August 30, 2007

Seeking to contain a growing form of payment card fraud - debit transactions - the NYCE Payments Network LLC has called upon Fair Isaac’s fraud alert system, which uses neural networks to identify suspect transactions. The pattern-based profiling system updates continually and therefore becomes ever smarter.

Educational Testing

» Artificial examiners put to the test
Technique: Neural networks » see NeuralTools
Source: BBC.co.uk, August 24, 2007

The University at Buffalo, New York, is developing software to fully automate the essay-marking process. Exam scripts are scanned into the computer, the software reads the handwriting and uses neural network technology to translate it into computer type and grades the response as an examiner would.

Image Data Processing

» Image processing a booming market
Technique: Neural networks   » see NeuralTools
Source: Engineering News Online, August 30, 2007

Starting in 2010, smart cameras with neural networks are expected to have the capability of categorizing objects into many different classes – an important feature when it comes to automatic sorting.

Finance

» Leveraging Your Gains
Technique: Monte Carlo simulation » see @RISK
Source: Forbes.com, August 22, 2007

In the mortgage banking industry, property owners that owe more than their properties are worth are described as being “underwater.” We'll follow a leveraged investment as it builds equity, loses value, goes underwater and then recovers. Using Monte Carlo simulation we can estimate the probability of going underwater.

» Online Service for CDO Industry Incorporates
Monte Carlo Simulation

Technique: Monte Carlo simulation » see @RISK
  Genetic programming » see Evolver
Source: Bob's Guide, August 5, 2007

In the mortgage banking industry, property owners that owe more than their properties are worth are described as being “underwater.” We'll follow a leveraged investment as it builds equity, loses value, goes underwater and then recovers. Using Monte Carlo simulation we can estimate the probability of going underwater.

Financial Planning

» Lack Of Flexibility Can Hurt Retirement Plans
Technique: Monte Carlo simulation  » see @RISK
Source: The Chicago Tribune, August 12, 2007

Setting up a retirement income plan based on a single age of death is one of the biggest mistakes savers make. With the Baby Boom generation bearing down on retirement, investment firms are working on new computer calculators that will apply Monte Carlo simulation strategies on age as well as market returns.

Linguistics

» Is Language Innate or Learned?
Technique: Neural networks   » see NeuralTools
Source: MIT Technology Review, August 2, 2007

Researchers have designed a novel computer program using neural networks that, through listening to samples of speech, sheds light on how human infants learn language.

Public Health

» Decision Tree Controls Vaccination for
Foot and Mouth Disease

Technique: Decision trees  » see DecisionTools Suite
Source: PR Newswire, August 10, 2007

In response to the recent outbreak of foot and mouth disease in England, the Department for the Environment, Food, and Rural Affairs confirmed its contingency planning protocol. It stipulated that any decision to vaccinate is based on a veterinary assessment of risk and follows the FMD vaccination decision tree in the contingency plan.

Sports

» Cricket batsmen in virtual studio
Technique: Neural networks   » see NeuralTools
Source: The Sydney Morning Herald, August 3, 2007

Sports development experts are using performance-predicting neural network software, which has the ability to learn from its own mistakes. "You feed information into it and get it to predict outcomes like when players might be injured, or averages, or results…”

Weather Forecasting

» Beijing warned of lighting during Olympic season
Technique: Neural networks   » see NeuralTools
Source: The China Daily, August 17, 2007

Two meteorologists warned that Beijing would encounter a possibly high frequency of lightning during the Olympic season next summer. The China Meteorological Administration will use neural networks to identify areas most vulnerable to lightning strikes.

 

Ask Amy Tech Support

Expert Answers to Technical Questions

Dear Amy,

How do I view the effect of changes to parameters on more than one distribution?

—D.S.

Dear D.S.,

I recommend using the Overlay Graph feature in @RISK to view the effect of changes to parameters on various distributions. To use this feature begin by clicking on the ‘Define Distributions’ icon in the @RISK toolbar. Then click on the button labeled, ‘Dist…’ to bring up the Distribution Palette. Click on the distribution that you would like to use as your primary distribution and enter values for the parameters. Once the primary distribution is displayed, right-click on the distribution graph and select ‘Add Overlay’. The distribution palette will appear once again. Click on the distribution that you’d like to use for the overlay graph. You’ll see the overlay added to the graph. The parameter values for the overlay graph will now appear to the left of the graph and you can adjust them as you like.

 

 


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E-mail comments or suggestions to:
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2007 Palisade Corporation, 798 Cascadilla Street, Ithaca, NY 14850 USA
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