@RISK Helps Columbia University
Students Tackle Global Risks
Students in Professor Roy Nersesian’s Quantitative Methods in Energy and Policy Analysis course gain hands-on experience in the development and interpretation of quantitative models for project evaluation and policy assessment. The students develop cash flow and market models using Palisade’s @RISK.
According to Professor Nersesian, “We start by building a static model, and not surprisingly, the results look great. Then we add risk into the model using @RISK for a proper risk analysis, and the picture changes. The students quickly learn that there are possible negative outcomes.”
How important is risk analysis and @RISK to the quantitative analysis course? “With @RISK they quickly turn static models into dynamic, probabilistic models that show all the possible outcomes.” Nersesian adds, “Students find @RISK easy to use – it takes very little time to become proficient.” When the students complete the course, they understand risk, they understand how @RISK can be used to analyze risk, and once they understand the scope of risk, they have the tools to come up with a plan to mitigate risk.”
The case for risk analysis and risk management is pretty compelling. One example used in the course is a financial analysis of an oil production project in a developing nation. A static model suggests that the project is a slam dunk. However when uncertain factors such as future oil prices and interest rates are added using @RISK, the model becomes much more interesting. The students learn how the impact of variables such as the global price of oil and lending rates can turn a sure thing into a fiasco. The lesson is to identify risks, understand their impact through modeling, and then implement appropriate changes to the structure of the financing to mitigate risk.
» Read the full case study
» More about Prof. Nersesian, his courses, and publications
I don’t see how a manager can be
effective without considering the risks
inherent in any business decision. In other
words, I don’t know how they live without
Prof. Roy Nersesian,
Over 60,000 students use the DecisionTools Suite annually in their MBA and graduate level programs. In 2011, 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:
||California State University, Fresno|
Harvard Business School
Penn State Great Valley
Pennsylvania State University
Southern Utah University
University of Delaware
University of Houston - Clear Lake
University of Minnesota
University of Utah
Worcester Polytechnic Institute
||Asian Institute of Technology - Thailand |
BS Grupo - Peru
Cardiff University - United Kingdom
Chalmers University of Technology - Sweden
Escola Politécnica da UFRJ - Brazil
Fernando Ferreira - Brazil
Indian Institute of Management Bangalor - India
ITESM - Mexico
Lancaster University - United Kingdom
Macquarie University - Australia
School of Economics, UQ - Australia
Singapore Management University - Singapore
The University of New South Wales - Australia
The University of Western Australia - Australia
Universidad de Talca - Chile
Universidad Francisco Marroquín - Guatemala
Universidad San Francisco de Quito - Ecuador
Universitaet Duisburg-Essen - Germany
University of Portsmouth - United Kingdom
Wageningen University - Netherlands
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 6.0 for your course by contacting:
Palisade Academic Sales
800-432-7475 / 607-277-8000
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
Professor Asher Drory
University of Toronto
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.
Insuring Against High Heating Oil Costs
Excerpted from @RISK Bank Credit
and Financial Analysis, by Roy Nersesian, published by Palisade Corporation
This example demonstrates how to determine an
insurance premium and necessary reserves for a fictitious situation
built around actual data. While the heating oil price history is not upto-
date, the general approach to determining an insurance premium
and adequate reserves remains the same.
A school board is contemplating insuring against high heating oil
costs for the school district. You have $250,000 in reserves and are
thinking of offering an insurance policy as a means of adding to
income. The object is to first determine the breakeven insurance
premium in order to be in a position to offer a more rewarding
premium to the school district.
Download the example spreadsheet and
@RISK Browse Mode
The Browse mode is started by clicking the Browse Results icon on the @RISK toolbar. Browse mode is automatically turned on at the end of a run if you select to popup a graph during a simulation.
In Browse mode, @RISK pops up graphs of simulation results as you click on cells in you spreadsheet, as follows:
- If the selected cell is a simulation output (or contains a simulated distribution function), @RISK will display its simulated distribution in a callout pointing at the cell.
- If the selected cell is part of a correlation matrix, a matrix of the simulated correlations between the inputs in the matrix pops up.
As you click on different cells in your workbook, their results graphs pop up. Press <Tab> to move the Graph window among output cells with simulation results in open workbooks To exit the Browse mode, simply close the popup graph or click the Browse Results icon on the toolbar.
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.
Valuation: The Art and Science of
Corporate Investment Decisions
by by Sheridan Titman and John Martin
For upper-division undergraduate and MBA students as well as business professionals.
Seeing the economic realities of the modern corporation through an integrated approach.
Titman/Martin presents an integrated approach to both project and enterprise valuation, showing readers the economic realities that today’s modern corporations face. This text also goes beyond standard DCF analysis by including additional valuation methods that are commonly used in practice, such as comparables, simulations with @RISK, and real options.
The second edition includes an increased emphasis on enterprise valuation, a new chapter on financial forecasting, and enhanced examples and illustrations.
» Learn more from the publisher
» See a list of books bundled with Palisade software
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.
A participatory approach for
integrating risk assessment
into rural decision-making:
A case study in Santa Catarina, Brazil
Ivan Luiz Zilli Bacic, Arnold K. Bregt, David G. Rossiter
Agricultural Systems, Volume 87, Issue 2, February 2006,
Incomplete information is one of the main constraints for decision-making, which are then by definition risky. In this study, formal risk concepts were introduced in decision-makers’ meetings according to local demands and following a participatory approach, as a first step towards integrating risk assessment into rural decision-making in Santa Catarina, Brazil.
Semi-structured interviews and meetings were conducted with extensionists and farmers. The following information was presented and discussed: (1) the time series and frequency distribution of maize yield predictions, simulated by the GAPS computer program for 16 feasible planting dates, representing climatic risks, both within and between years; and (2) a simple economic analysis (gross margin) and income probabilities for seven land-use options over a recent five-year period, followed by an interactive exercise where probabilities of achieving user-supplied target gross margins were calculated according to participants’ actual information, using the computer program @RISK. This paper also investigates decision-makers’ attitudes towards risk, and how these were influenced by objective information.
Although results from a study such as this are not definitive, considering that the effects of the information on actual decision-making require some time to become evident, it was already possible to conclude that the risk-orientated information presented according to local demands and following a participatory approach had a positive impact on decision-makers’ understanding and perceptions. This approach should be further explored to effectively integrate risk assessment into rural decision-making.
Read the full paper here
Experts using Palisade software share examples and teaching tips. Register online at no charge.
Good Practices and Common Mistakes
To be presented by Dr. Huybert Groenendaal, EpiX Analytics
December 6, 2012, 11:00am EST (Eastern Standard Time)
Ever question if your Monte Carlo model is correct? Ever wondered how other organizations use @RISK, how to get the most value out of @RISK, and what are some of the most important best practices? Then this is the right free live webcast for you!
An increasing number of organizations are using analytical techniques such as quantitative risk analysis, value at risk (VaR), and risked NPV to help them improve decision making. However, all too often, these techniques may not be used optimally or accurately and their full value may not be realized.
During this presentation, Dr. Huybert Groenendaal will share his hands-on experience through hundreds of projects, and will discuss the following topics:
Good practices for the use of @RISK and risk modeling to support decision-making.
- Common mistakes in Monte Carlo simulation and how to prevent them.
All good practices and common mistakes will be discussed with the use of real-life risk modeling case studies and models based on EpiX consulting work.
» Read more details about the webcast and register here
Use of @RISK in Food Safety
To be presented by Charles Yoe, Notre Dame of Maryland
University and Charles Yoe Consulting
January 10, 2013, 11:00am EST (Eastern Standard Time)
In this complimentary live webcast, Prof. Charles Yoe will use the FDA/Center for Food Safety and Applied Nutrition’s report “Quantitative Risk Assessment on the Public Health Impact of Pathogenic Vibrio parahaemolyticus In Raw Oysters” in a demonstration and discussion of the use of @RISK in food safety risk assessment.
» Read more details about the webcast and register here
» See complete Webcast schedule
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
Story to Share?
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- How does Palisade software help you and your students?
- Any other comments.