@RISK 5.0.1 is Now Available
@RISK 5.0.1 is a significant maintenance update to @RISK 5.0. It features the following enhancements:

• New button that fits a distribution to simulation results
• Faster RISKOptimizer engine
• Support for common @RISK 4.5 macros
• And more

All @RISK 5.0 users with current maintenance plans are entitled to this update, and all copies of the DecisionTools Suite 5.0 include @RISK 5.0.1.

» More information and to download your update

See Palisade on YouTube
Palisade is pleased to announce the debut of its YouTube video channel! See what Palisade customers have to say about @RISK and DecisionTools software. Learn about real-life applications of @RISK and how it can be used. The channel is continually updated, so check back often.

» Watch Palisade on YouTube

Free Live Webcasts
Insurance Loss Modeling Using Simulation
Presented by Dr. Domingo Castelo Joaquin
Associate Professor, Illinois State University
» 26 June 2008, 11:00 AM – Noon ET

Application Integration for Graphical Solution Report
Development: RISKOptimizer + MapPoint
Presented by Dr. Elliot Bendoly, Associate Professor of
Information Systems and Operations Managment, Emory University
» 17 July 2008, 11:00 AM – Noon ET

@RISK for design optimization within DFSS-based
product development
Presented by Jeff Slutsky
Global Director of DFSS, Bausch&Lomb, Inc.
» 24 July 2008, 11:00 AM – Noon ET

» Learn more about webcasts and register

VAIR Financial Courses Featuring @RISK
Financial Statement Modeling and Analysis with Excel
and @RISK 5.0 - June 23-24 New York City
This class demonstrates efficient model creation and how these financial models should guide commercial discussions. Participants learn how to "negotiate off the financial model." This course is indispensable to the effective use of financial spreadsheets for any industry or sector.

» More information or Register

Project Finance Advanced Modeling with Excel and @RISK 5.0 -
June 25-27 New York City
This is a master-level class and focuses on project finance and its related modeling issues. After reviewing some basic elements of project finance, the participants are given a full suite of project documents and macroeconomic information that are indicative to any infrastructure project. Immediately following is a step-by-step procedure of building a complex equity case model. The final phase of this module uses sophisticated model techniques with @RISK to help the practitioner price the deal.

» More information or Register

Cranfield University uses @RISK and
Sub-Sea Oil & Gas Model to Demonstrate Benefits of Investing in Product Reliability
Cranfield University is a wholly postgraduate institution with a worldwide reputation for excellence and expertise in aerospace, automotive, defense, engineering, environment and water, health, management, and manufacturing.

A recent project focusing on sub-sea equipment for the oil and gas industry at Cranfield University provided evidence to business managers that a better return on investment (ROI) is achieved through enhancing a product's longterm reliability as a result of spending time and resources early in the product design lifecycle.

Cranfield's School of Applied Sciences uses @RISK software to calculate the likelihood of sub-sea oil and gas production equipment failing, and the overall cost throughout the project life cycle, should it do so. Sub-sea oil and gas equipment can be required to function in excess of 2000m below sea level. This means that the failure of any product, or product component, has huge ramifications. @RISK enables Cranfield to integrate the critical elements of the two core risk analysis techniques commonly used in the engineering field, RAM (Reliability, Availability, Maintainability) and Lifecycle Costing analysis (LCC).

» Read the full case study

Oil & Gas:
Exponential Decline
This model examines the familiar production forecasting model for oil and gas wells, the exponential decline curve. No longer do we just want a distribution of numbers for output. Instead we want a distribution of forecasts or graphs. The worksheet has two input cells, IP and Decline, and a column of outputs for the Rate of production in STB/YR over 15 years.

» Example model: Band.xls

Value at Risk (VAR) using @RISK Goal Seek
Anybody who owns a portfolio of investments knows there is a great deal of uncertainty about the future worth of the portfolio. The concept of value at risk (VAR) has been used to help describe a portfolio's uncertainty. The example also demonstrates how buying puts can greatly reduce the risk in a stock. The two outputs represent the range of the percentage gain if we do not buy a put vs. the percentage gain if we do buy a put. @RISK Goal Seek can be used to determine the reduced put to share ratio that will yield a minimum desired profit.

» Example model: VarGoalSeek.xls

The release of @RISK 5.0 has spurred tremendous response from our users. Every day customers ask us, “What’s new in @RISK 5.0?” To help answer this question, this series highlights key new features in @RISK 5.0. You can always see a complete list of new features, including short 30-second movies, here:

» What's New in @RISK 5.0

Browse Graphs with Tab Key
You can use the Tab key to pop up @RISK graphs of distribution functions or simulation results as you browse through your spreadsheet. Graph “callouts” point to the cell or cells where the input or output is located. This makes it easy locate @RISK functions and illustrate model logic, uncertainty definition, and results to other stakeholders.

» See how browsing with the Tab key works

 

The PERT Distribution

The PERT distribution (meaning Program Evaluation and Review Technique) is rather like a Triangular distribution in that it has the same set of three parameters: minimum value, most likely value, and maximum value. Technically it is a special case of a scaled Beta (or BetaGeneral) distribution. In this sense it can be used as a pragmatic and readily understandable distribution. It can generally be considered as superior to the Triangular distribution when the parameters result in a skewed distribution, as the smooth shape of the curve places less emphasis in the direction of skew. As for the Triangular distribution, the PERT distribution is bounded on both sides, and hence may not be adequate for some modeling purposes where it is desired to capture tail or extreme events.

RiskPert(minimum, most likely, maximum) specifies a PERT distribution (as special form of the beta distribution) with a minimum and maximum value as specified. The shape parameter is calculated from the defined most likely value.

Examples

RiskPert(0,2,10) specifies a beta distribution with a minimum of 0, a maximum of 10, and a most likely value of 2.

RiskPert(A1,A2,A3) specifies a PERT distribution with a minimum value taken from cell A1, a maximum value taken from cell A3, and a most likely value taken from cell A2.

Brain Function
Artificial Neural Networks Analyze Brain Function
Technique: Neural networks   » see NeuralTools 5.0
Source: Developing Intelligence, June 16, 2008

Using data from students in an executive training course, a neural network analysis was applied to the important mental activity of “updating” memory.

Cancer Diagnosis
Pancreatic Cancer and Machine Learning
Technique: Decision trees   » see PrecisionTree 5.0
Source: 7thSpace Interactive, June 11, 2008

Decision trees improve the classification and diagnosis of pancreatic cancer by reducing the number of dimensions in data on this cancer.

Computer Chips
Achieving Success with New Leading-Edge Chip Manufacture Technique: Monte Carlo simulation   » see @RISK 5.0
Source: EDN.com , June 12, 2008

Monte Carlo statistical simulations guide designers in creating chips that will work properly even when their transistors vary as much as three standard variations from production mean.

Conservation
Fishermen's Knowlege Contributes to Better Marine Reserves
Technique: Optimization   » see Evolver 5.0,
@RISK 5.0 Industrial with RISKOptimizer 5.0
Source: UQ News, June 11, 2008

Researchers from UQ's Centre for Applied Environmental Decision Analysis found that incorporating information from local fishermen in optimization models resulted in improved design of marine reserves.

Detecting Invasive Species
Technique: Neural networks   » see NeuralTools 5.0
Source: The Engineer, June 9. 2008

To detect invasive species, particularly insects, before they enter the country, an engineering professor at York University developed a computational bioacoustics system that incorporates neural networks.

Corporate Sabotage
Insider Attacks and How to Stop Them
Technique: Neural networks   » see NeuralTools 5.0
Source: ComputerWeekly.com, May 30, 2008

A recent report recommends that businesses use advanced analytics, such as neural networks, to detect patterns of fraud by employees.

Energy Budgeting
Balancing Energy Cost and Supply
Technique: Monte Carlo simulation   » see @RISK 5.0
Source: Earthtimes, June 16, 2008

One firm that helps corporations balance energy supply and cost builds @RISK 5.0 into its custom applications.

Internet Searching
The Semantic Web vs. Search Engine
Technique: Neural networks   » see NeuralTools 5.0
Source: Ars Technica, May 29. 2008

Researching ways to create a “semantic web” that understands the meanings of words better than a search engines, scientists are harnessing neural network analysis to MRI images of the brain.

Investment
Portfolio Planning and the Lost Decade
Technique: Monte Carlo simulation   » see @RISK 5.0
Source: Seeking Alpha, June 13, 2008

One commentator uses Monte Carlo simulation to put a decade of low returns into perspective.

Mathematics Education
Use of Video Tutorials in a Mathematical Modeling Course
Technique: Decision trees   » see PrecisionTree 5.0
Source: RedOrbit, May 28, 2008

Virginia Commonwealth University is using video tutorials in a mathematical modeling course. One of the stars of these videos is Palisade’s PrecisionTree.

Public Health
Tuberculosis Screening for International Travelers
Technique: Decision Analysis   » see DecisionTools Suite 5.0
Source: 7thSpace Interactive, June 5, 2008

Public health consultants used a decision analysis model to compare the cost-effectiveness of four difference strategies to screen travelers for tuberculosis when they are bound for high-incidence countries.

Smoking Cessation
Failure to Quit Smoking Attributed to Genetics
Technique: Monte Carlo simulation   » see @RISK 5.0
Source: MedPage Today, June 3, 2008

NIH researchers used Monte Carlo simulation to identify genetic structures that predicted difficulty quitting smoking.

Weather Prediction
Crude Oil: Monte Carlo and Forecasting Hurricanes
Technique: Monte Carlo simulation   » see @RISK 5.0
Source: CattleNetwork.com, June 11, 2008

Monte Carlo simulation boosts the power of storm prediction to insulate businesses from storm-related oil price surges.

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.

» Join or view the Palisade Forums

Recent topics include:

» High serial correction in @RISK
» Actual simulated correlation coefficients in @RISK