March 2008 Enews - Palisade Corporation

Try DecisionTools Suite 5.0
at the Palisade User Conference Europe
London, 22-23 April 2008
Representatives from blue-chip organizations like PricewaterhouseCoopers, Infineon, Unilever, Munich Re, London Business School, Chase Cooper, and Norsk Regnesentral will be among the witnesses for the unveiling of the brand-new DecisionTools Suite 5.0 at the Palisade User Conference in London by Palisade President Sam McLafferty. Delegates will take part in hands-on training sessions using the new software, and will experience the stunning new interface, powerful analyses and unprecedented sharing capabilities of this exciting new release.

Real world case studies on topics ranging from utilities regulation to brand management, demand forecasting to environmental cleanup, and energy risk assessment to traffic forecasting will greet attendees at the London headquarters of the Institute of Directors. Check out the program and register today.

� See the conference schedule
» Register today

Mark Your Calendar for the
Palisade User Conference North America
New York City, 13-14 November 2008
The 2008 Palisade User Conference North America will be held 13 – 14 November 2008 in New York City. The event will feature all-new case studies using DecisionTools Suite 5.0 and a keynote address from Dr. Kimberly Thompson, author and Professor of Risk Analysis and Decision Science at the Harvard School of Public Health. Watch for more details soon.

@RISK featured in Australian Mining Publication MiningNewsPremium.net
In the article “More than a roll of the dice,” MiningNewsPremium.net author Alex Forrest looks at how any mining project's viability ultimately hinges on minimizing risk. He analyzes the use of @RISK for solving mining problems.

» Read the full article

@RISK 5.0 World Tour
Free Live Demos and Discussion
Hundreds of professionals in all industries have been learning about @RISK 5.0 via free live demonstrations and Q&A sessions in cities around the world. Mark your calendars for upcoming @RISK 5.0 World Tour demo stops. Registration is encouraged but walk-ins are always welcome!

EUROPE
14 April 2008	Warsaw – Le Meridien Bristol Hotel
25 April 2008	Budapest – Le Meridien
22 May 2008	Rome – Le Meridien Hotel Eden
NORTH AMERICA
7 April	Philadelphia
16 April	Chicago
17 April	Chicago suburbs
6 May	Vancouver
7 May	Edmonton
8 May	Calgary

» Register today for free

Free Live Webcasts
Register to see these free Webex presentations demonstrating the use of @RISK for modeling oil prices and for Six Sigma applications.

Robust Dynamic Pricing of Perishable Products
Presented by Yu-jiun Tsai MS, Lehigh University
» 27 March 2008, 11:00 AM – Noon ET

Using Integrated Stochastic Process for
Strategic Project Selection Decision-making in Oil & Gas
Presented by John Zhao, MSc., Suncor Energy Services, Inc.
» 10 April 2008, 11:00 AM – Noon ET

Integrating @RISK into the DMAIC Process
Presented by Ed Biernat, President. Consulting with Impact, Ltd.
» 24 April 2008, 11:00 AM – Noon ET

Monte Carlo Simulations & Sensitivity Analyses for Assessing & Optimizing Design of Integrated Multi-Trophic Aquaculture Sites
Presented by Dr. Gregor K. Reid, Post–Doctoral Fellow,
University of New Brunswick and Department of Fisheries and Oceans
» 8 May 2008, 11:00 AM – Noon ET

» Learn more about webcasts and register

@RISK Quantifies Market Feasibility for Aerospace Leader Thales
Thales Group is a leading provider of mission-critical electronic information systems for aerospace, defense, and security markets around the world, developing products for dual markets in recognition that civil and military systems benefit from many of the same technologies and innovations. @RISK enables Thales to calculate the competitiveness of complex markets, measure probabilities for project costs, quantify rate of return, and even account for the effects of cumulative business, thereby providing decision-makers with the most complete picture possible.

» Read the full case study

Six Sigma DMAIC:
Roll Through Yield Analysis
DMAIC - or Define, Measure, Analyze, Improve, and Control - is a process used by Six Sigma practitioners to improve existing products or processes. Imagine you are a costume jewelry manufacturer, coating inexpensive silver with thin layers of gold. You import materials and components from China. A small number of components are always defective, but you don't know how many or how much it is costing. You need to reduce the number of defective units produced.

» Example model: SixSigmaDMAICRTY.xls

New Product Profitability:
Advanced Sensitivity Analysis
When a company develops a new product, the profitability of the product is highly uncertain. Simulation is an excellent tool to estimate the average profitability and riskiness of new products. Imagine Pigco is thinking of marketing a new drug used to make hippos healthier. The model below sets up the variables involved in marketing the new product, such as market size, use of the drug, whether competitors enter the market, etc. The bottom line is whether the new product will be profitable or not, and @RISK’s Advanced Sensitivity Analysis will help us decide which input factors to focus on.

» Example model: HippoSensitivity.xls

The Binomial Distribution

The binomial distribution is a discrete distribution returning only integer values greater than or equal to zero. This distribution corresponds to the number of events that occur in a trial of a set of independent events of equal probability.

RiskBinomial(n, p) specifies a binomial distribution with n number of trials and p probability of success on each trial. The number of trials is often referred to as the number of draws or samples made. For example, RiskBinomial(10,20%) would represent the number of discoveries of oil from a portfolio of 10 prospects, where each prospect has a 20% chance of having oil.

The most important modelling application is when n=1, so that there are two possible outcomes (0 or 1), where the 1 has a specified probability p, and the 0 has probability 1-p. With p=0.5, it is equivalent to tossing a fair coin. For other values of p, the distribution can be used to model event risk i.e. the occurrence or not of an event, and to transform registers of risks into simulation models in order to aggregate the risks.

Examples

RiskBinomial(5,.25) specifies a binomial distribution generated from 5 trials or “draws” with a 25% probability of success on each draw.

RiskBinomial(C10*3,B10) specifies a binomial distribution generated from the trials or “draws” given by the value in cell C10 times 3. The probability of success on each draw is given in cell B10.

Business School Curriculum
Darden School's Luckiest Student
Technique: Monte Carlo simulation » see @RISK, RISKOptimizer
Source: BusinessWeek, February 21, 2008

In Palisade consultant Sam Bodily’s decision analysis class, playing for high stakes show first-year MBAs the value of quantitative decision analysis.

Credit Card Fraud
VISA's Lucrative House of Cards
Technique: Neural networks » see NeuralTools
Source: San Francisco Chronicle, February 26, 2008

VISA –the membership association now recasting itself as a for-profit enterprise—was applying neural networks technology to reduce fraud as early as 1993.

Enterprise Resource Planning
ERP Risk and ROI Explained
Technique: Monte Carlo simulation » see @RISK
Source: IndustryWeek, March 14, 2008

An ERP system usually represents a large investment, and one expert recommends Monte Carlo simulation to assess the financial risks before purchasing or upgrading a system.

Experimental Computing
Quantum Computer May Be Capable of Showing the Big Picture
Technique: Neural networks » see NeuralTools
Source: Ars Technica, March 3, 2008

A new form of quantum computing that mimics a neural network promises to create more dynamic, robust pattern recognition.

Fire Safety
Research in the Wake of Nightclub Fire
Technique: Decision analysis » see PrecisionTree, @RISK, RISKOptimizer
Source: Medical News Today, February 20, 2008

Research on a tragic Rhode Island night club fire called for more computer-aided decision tools to assess the effectiveness of lifesaving regulations.

IT Integration
Connecting A to B: a decision tree approach
Technique: Decision trees » see PrecisionTree
Source: ITworld.com, February 21, 2008

Decision tree technology can help companies analyze information flow for better decisions about systems integration.

Medical Practice
Modeling for Resistance to Antibiotics
Technique: Monte Carlo simulation » see @RISK
Source: Science Daily, February 22, 2008

A Vanderbilt University mathematician has demonstrated how to use Monte Carlo simulation to optimize antibiotic use and cut down on overuse and resulting resistance.

Dual Screening Needed for Women Who Carry Breast Cancer Gene
Technique: Predictive modeling » see NeuralTools, StatTools
Source: Reuters, February 26, 2008

A new study based on predictive modeling showed that women who carry the BRCA1 gene should be evaluated by regular screening by both mammography and MRI.

Retirement Planning
How to Retire, Travel and Throw a Wedding
Technique: Monte Carlo simulation » see @RISK
Source: The Star-Ledger (Newark, NJ), March 9, 2008

For one couple with adequate income but very big retirement plans, a Monte Carlo simulation suggested how to balance their dreams with wealth preservation.

Robotics
Six-Legged Robots Will Swarm to the Rescue
Technique: Neural networks » see NeuralTools
Source: The Engineer, February 25, 2008

Agile rescue robots under development at the University of Edinburgh will rely on an artificial neural network to direct their insect-like appendages over rough terrain.

Semiconductor Manufacture / Quality Control
Facing the Grand Challenges of Nanofabrication
Technique: Neural networks » see NeuralTools
Source: Fabtech, February 25, 2008

Recent advances in nanofabrication are based on neural networks regulation of quality control.

Water Quality
Mapping Salt in Coastal Waters
Technique: Monte Carlo simulation » see @RISK
Source: International Science Grid, February 27, 2008

Using a three-dimensional grid based on Monte Carlo simulation, researchers are studying the sustainable management of groundwater.

The Palisade User Forums are online discussion boards where users are invited to post questions and share ideas on their use of @RISK and other Palisade software. It�s also a great place to check for announcements regarding updates of Palisade software. Forums are organized by products.

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