Palisade Corporation
University of Buenos Aires Analyzes Agricultural Portfolios with @RISK

University of Buenos Aires Analyzes
Agricultural Portfolios with @RISK

With the advent of corporate farming, analysts at large agricultural companies have begun to apply the same kinds of risk analysis techniques that their counterparts in the manufacturing and finances sectors use, to the powerful uncertainties of market prices and the natural world. Ariadna Berger, professor of Farm Management at the University of Buenos Aires, has introduced a portfolio approach to assessing and balancing the risks and opportunities of large cash cropping operations in Argentina. She began using @RISK when she was a graduate student at Cornell University and reports that it is the perfect tool to show her clients how to manage the risks in their large-scale farming operations.

» Read the full case study

@RISK By accounting for a nearly limitless variety
      of uncertainties in our work, @RISK adds
      tremendous value.  Trial Versions

                            Prof. Ariadna Berger
                            University of Buenos Aires

Recent School Adoptions

Over 60,000 students use the DecisionTools Suite annually in their MBA and graduate level programs. In 2010, over 800 universities worldwide adopted the DecisionTools Suite. Professors in business, engineering, OR, and other fields keep their students on the cutting edge by teaching the latest analytical techniques from Palisade. Some major schools with programs and courses that standardized on the DecisionTools Suite last month include:

US and Canada:

  Cornell University
Emory University
Indiana University
Kansas State University
Louisiana State University
Oregon Health & Science University
Texas A&M University
Texas Tech University
University of California, Davis
University of Connecticut
University of Maryland
University of Notre Dame
University of Texas at El Paso
University of Utah
Utah State University
Virginia Tech


International:

  ESADE Business School (Spain)
Friedrich Schiller University of Jena (Germany)
Gordon Institute of Business Science (South Africa)
Hochschule Lausitz (FH)
Hogeschool Rotterdam (Netherlands)
HS Lausitz (Germany)
HS Zürich (Switzerland)
Indian School of Business (India)
Kingston University (UK)
National University of Singapore (Singapore)
Petroleum institute (UAE)
Ruhr-Universität Bochum (Germany)
Sri Venkateswara Veterinary University (India)
Stirling University (UK)
Technical University of Denmark (Denmark)
Technische Universitaet Braunschweig (Germany)
Technische Universiteit Eindhoven (Netherlands)
Universitaet Bielefeld (Germany)
University College London (UK)
University of Melbourne (Australia)
Yeditepe University (Turkey)
ZHAW Zürcher Hochschule f. Angew.Wissensch.(Switzerland)

Spotlight

Palisade is happy to showcase professors who implement our tools into their teaching. This month we would like to introduce you to Asher Drory from the University of Toronto.

Dr. Asher Drory
University of Toronto

Understanding how to use Monte Carlo simulation to account for risk in decision-making is quickly becoming a required skill for today’s business leaders, says Asher Drory, Adjunct Professor of Finance at University of Toronto’s Rotman School of Management.

“Many leading corporations are now using Monte Carlo simulation in their business cases,” Professor Drory says. “Students who want a leg up with such corporations should seek out all opportunities to get experience in working with Monte Carlo simulation.”

In his Financial Management course, Drory uses @RISK to teach some 200 graduate students each year how to use Monte Carlo simulation in analyzing working capital and capital budgeting decisions. Monte Carlo simulation furnishes the decision-maker with a range of possible outcomes and the probabilities that will occur for any choice of action.

For example, Drory's classes use @RISK and Monte Carlo simulation to look at:

  • How forecasts of financial statements are needed to determine future funding requirements in working capital decisions.
     
  • How forecasts of future free cash flows are required and risk must be assessed in capital budgeting analysis.
Separately, Drory and his students use Palisade’s PrecisionTree software in modeling decision tree analysis for new product development. The students have access to the entire DecisionTools Suite which is loaded on all of the computers in the Rotman Finance Laboratory.

“All key financial decisions such as investing, operating and financing decisions can benefit from Monte Carlo simulation,” says Prof. Drory, who has taught at the University of Toronto for 21 years. “I ran across @RISK about 5 years ago when I was looking for PC-based Monte Carlo simulation tools. @RISK has a straightforward and easy-to-use interface.”

» Click here for more information on Asher Drory

Licensing Options

There are three easy ways to get the DecisionTools Suite for your students:

 

Course Licenses available from Palisade. These are economical, annually renewing bulk licenses for both
network lab and laptop installation.
» Learn more

Student Versions from Palisade. These are 12-month versions available for purchase individually by students through either the Palisade web site or the school store.
» Learn more

Textbook Editions available bundled with textbooks.
These are time- and model-limited licenses.
» Learn more

Get DecisionTools Suite 5.7 for your course by contacting:

AddressPalisade Academic Sales    
800-432-7475 / 607-277-8000
academic@palisade.com

@RISKWe use @RISK to explain quantitative risk
      analysis in contrast to discrete event
      simulation. We appreciate @RISK because
      it is very easy to define different
      distributions and we also like the way
      results are presented.  Trial Versions

      Ines Eckart - Friedrich Schiller University of Jena (Germany)

Teaching Tips & Examples

The DecisionTools Suite is a great way to present quantitative techniques in a straightforward, easy-to-understand way. Each month we feature an example or tip illustrating how students can gain “real world” benefits by implementing quantitative analysis.

Estimating Volatility
Excerpted from Financial Models Using Simulation and Optimization II by Wayne Winston, published by Palisade Corporation

In a real options analysis the value of the option will depend crucially on the volatility of the underlying project or asset. Under the assumption that a stock follows a lognormal random variable, the volatility is the σ characterizing the stock’s lognormal price random variable. Most experts believe that the best way to estimate volatility of say, an Internet startup or a biotech drug is to look at the volatility the market has placed on companies in a similar line of business. It is therefore important to understand how to estimate the volatility of a stock.

Palisade Corporation Download the example spreadsheet and step-by-step instructions

Textbook of the Month

The DecisionTools Suite is included in dozens of major textbooks, and is a key component of more titles every year. Authors use the DecisionTools Suite to illustrate key analytical concepts and build examples demonstrating the value of quantitative techniques in business, OR, and engineering.

Introduction to Financial Models for
Management and Planning
By James R. Morris and John P. Daley

This text provides graduate level instruction on the development of models for financial management and planning. By working through the problems and models in this text, readers learn how computer based models should be structured to analyze a firm’s investment and financing. The authors emphasize modeling problems related to financial management, firm valuation, forecasting, and security pricing. Monte Carlo simulation is emphasized and access to the Monte Carlo simulation software @RISK is included with the text. A solutions manual and PowerPoint lectures are available for instructors who adopt the text.

» Learn more from the publisher
» See a list of books bundled with Palisade software

Featured White Paper

Professors, PhD candidates, practitioners and others often use the DecisionTools Suite as part of a complex analysis to address important problems. These analyses are published in white papers. Each month we will feature a different academic white paper addressing a wide range of issues.

Using Simulation to Support the Reinsurance
Decision of a Medical Stop-Loss Provider

by Lina S. Chan, FSA, MAAA, FCA Managing Partner, CP Risk Solutions, LLC, and Domingo Castelo Joaquin, Illinois State University, from the journal "Insurance Markets and Companies: Analyses and Actuarial Computations" Volume 1, Issue 2, 2010

This article illustrates how simulation modeling can be employed to support the reinsurance decision of a medical insurer. We do this in the context of a simplified but realistic example, where a medical insurer is evaluating a request for proposal to provide stop-loss coverage for a trust, which provides comprehensive medical coverage to employees of a major conglomerate. Simulation is employed to evaluate alternative reinsurance options for the stop-loss provider. We incorporate uncertainty about the true loss distribution through the use of alternative distributions to model total claims.

Palisade Corporation  View the full paper

Academic Live Webcast

Professors using Palisade software share examples and teaching tips they've used in class in Palisade's Academic Webcast series. Register online at no charge.

Teaching Decision Making in MBA Classes
Presented by Phil Rogers, Clinical Assistant Professor at the C.T.
Bauer College of Business at the University of Houston
April 27, 2011, 1:00pm ET

In this complimentary live webcast, Phil Rogers, Clinical Assistant Professor at the C.T. Bauer College of Business at the University of Houston, will discuss the business modeling and decision making courses he teaches to MBA and Executive MBA candidates at the University of Houston.

Dr. Rogers’ courses deal with the practical application of spreadsheet modeling and management science techniques to the solution of complex problems. Although the emphasis on applications is on problems in the energy industry, the tools and techniques taught are applicable to problems in virtually any area of any corporate or government entity. Aspects of decision making covered are: spreadsheet modeling, handling uncertainty, identifying objectives and alternatives, simulation, setting priorities, allocating resources, planning, resolving conflict and making group decisions. Topics are explored by learning how to solve a wide variety of problems taken from the text used (Practical Management Science) and the instructor’s own experience. Two highlights of one of the courses are the development and presentation of student projects based on problems from the students’ own working experiences, and the opportunity the students have to learn their personal communication styles and to gain an understanding of how those styles impact communication with others, thus improving the chances that when the results of their analysis are shared with others, they will be understood and accepted.

Topics covered in the webcast will include the textbooks and software used, the leverage gained from the use of software tools, the nature of the student projects, and how the decision-making course is taught as an intensive short course in the Executive MBA program the University of Houston runs in Beijing.

» Register now

» See complete Webcast schedule

Palisade Corporation
The Academic Global Leader in
Risk and Decision Analysis
Palisade Corporation is the world’s leading provider of risk and decision analysis software and solutions. Founded in 1984, its products @RISK and the DecisionTools Suite are used by over 95% of the Fortune 100, in nearly every industry around the world. Palisade is headquartered in New York State, and has offices in London, Sydney, Rio de Janeiro, and Tokyo.

What is The DecisionTools Suite?

The DecisionTools Suite is the world’s only integrated set of risk and decision analysis programs. The Suite includes @RISK for Monte Carlo simulation, PrecisionTree for decision trees, and TopRank for “what if” sensitivity analysis. In addition, DecisionTools Suite comes with StatTools for statistical analysis and forecasting, NeuralTools for predictive neural networks, and Evolver and RISKOptimizer for optimization. All programs work together seamlessly, and all integrate completely with Microsoft Excel for ease of use and maximum flexibility.

The Suite is offered in three affordable and flexible licensing options for those in academia: Student Versions, Course Licenses and Full Academic Versions.

» Schools using Palisade software
»
Textbooks using Palisade software

In This Issue

» University of Buenos
   Aires Analyzes
   Agricultural Portfolios
   with @RISK

» Recent School Adoptions

» Spotlight
   Dr. Asher Drory
   University of Toronto

» Licensing Options

» Teaching Tips &
   Examples

   Estimating Volatility

» Textbook of the Month
   Introduction to Financial
   Models for Management
   and Planning

» Featured White Paper
   Using Simulation to Support
   The Reinsurance Decision of
   a Medical Stop-Loss Provider

» Academic Live Webcasts

» About Palisade and the
   DecisionTools Suite

Keep in Touch
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Risk Conferences

2011 Palisade Risk Conferences
Industry experts present real-world case studies about innovative and interesting approaches to risk and decision analysis. Also, ever-popular workshops and training delivered by Palisade consultants, and sneak previews of new software.
» Amsterdam: 29-30 March
» Mexico City: 1-2 June
» Rio de Janiero: 14-15 Sept
» Las Vegas: 10-11 Nov

2011 Palisade Biotech & Pharma Risk Analysis Forum
Join decision-makers and practitioners from the pharmaceutical industry, biotechnology & life sciences, and academia at this exciting and informative one-day event.
» Boston: June 3, 2011

2011 Palisade Roadshow
These seminars are designed to show companies and individuals the benefits of using Palisade solutions – and will also show existing customers how the latest releases can add even more value to their business.
» Madrid: 4 May 2011
» Seville: 5 May 2011
» Glasgow: 11 May 2011
» Aberdeen: 25 May 2011
» Leeds: 26 May 2011
» Paris: 6 June 2011
» Marseille: 7 June 2011

Events

» Trade Shows
Palisade will be attending the following trade shows in the coming months.
US/Canada
SNEC-PMI
April 28th – 29th
Hartford, CT
ISPA/SCEA
June 7th – 10th
Albuquerque, NM
AACE International
June 19th – 23rd
Disneyland Hotel
Anaheim, CA
PMI Global Congress 2011
North America

October 22nd – October 25th
Dallas/Fort Worth, TX
SPE ATCE
October 30th – November 3rd
Colorado Convention Center
Denver, CO
INFORMS Annual Meeting
November 13th – 16th
Charlotte Convention Center
Charlotte, NC
DSI - Decision Sciences Inst
November 19th – 22nd
Boston MA
Europe
PMI EMEA Global
Congress 2011

May 9th - 11th
Dublin
MIOGE 2011
June 21st - 23rd
Moscow
58th ISI Congress 2011
August 21st - 26th
Dublin
Middle East
MEOS 2011
March 21st -23rd
Manama, Bahrain
 

» Training Seminars
Asia-Pacific
Perth: 11-12 May
Singapore: 24-26 May
Aukland: 30-31 May
Wellington: 2-3 June
Melbourne: 6-7 July
Sydney: 20-22 July
Brisbane: 24-25 August

Brazil
Belo Horizonte: 11-13 de maio

EMEA & India
London: 24-25 May
Copenhagen: 20-21 June
Moscow: 23-24 June
London: 27-28 June
London: 2-4 August

Latin America
Santiago, Chile: 3-5 de mayo
Panamá: 11-13 de mayo
México D.F.: 17-19 de mayo

North America
Phoenix: 19-21 April
Miami: 3-4 May
Chicago: 17-19 May
Calgary: 7-9 June
Mount Laurel, NJ: 21-22 June
Kansas City, MO: 6-7 July
Seattle, WA: 19-21 July
Toronto: 2-3 August
Jersey City: 16-17 August
 

» Live Web Training
Decision-Making and Quantitative Risk Analysis using @RISK
PART I

28-29 April, 9am-1pm ET
28-29 July, 1pm-5pm ET
PART II
12-13 May, 9am-1pm ET
10-11 August, 1pm-5pm ET

Decision-Making and Quantitative Risk Analysis using the DecisionTools Suite
PART I

31 May-1 June, 11am-3pm ET
PART II
15-16 June, 11am-3pm ET

Project Risk Assessment Using @RISK for Project
11 July, 11am-3pm ET
 

» Live Webcasts
These complimentary sessions are 30-60 minutes, held via web conference. See industry case studies, software demos, applications, and more.

Teaching Decision Making
in MBA Classes

April 27, 2011, 1:00pm ET
Phil Rogers,
Clinical Assistant Professor,
University of Houston
» Register

The Use of @RISK and
Economic Value Added
in Business Valuation

July 13, 2011, 10:00am ET
Marwaan Karame,
Managing Director,
Economic Value Advisors
» Register
 

Trial Versions

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

The DecisionTools Suite
The complete risk and
decision analysis toolkit

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

PrecisionTree
Visual decision analysis
for spreadsheets

NeuralTools
Sophisticated neural networks for spreadsheets

StatTools
Advanced statistical analysis for spreadsheets

Evolver
The Innovative Optimizer
for Windows


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