Professor Hooked on @RISK Brings its Benefits to Cal State Monterey Bay
Dr. Sumadhur Shakya, Assistant Professor of Operations Management & Agribusiness at California State University, Monterey Bay (CSUMB), has used @RISK in his own academic research and as a teaching tool in his classes, Operations Management and Supply Chain Management. Indeed, thanks to his championing of the software, 360 students at CSUMB will use @RISK, annually, either in Dr. Shakya's classes, or in other business courses such as Commodity Trading.
Dr. Shakya says he 'got hooked' on Palisade's software when he was in his Master's program at North Dakota State University, and later in his Ph.D. at the Upper Great Plains Transportation Institute. He used it to apply 'real option model' for the valuation of random genetic traits, such as drought tolerance, in crop plants to determine their viability at various stages of development. @RISK was useful in accounting for the assorted uncertainties involved in these kinds of prospects, such as the size of the capital investment to develop the traits, rate of adoption post commercialization stage, and expected return to farmers/users in case drought occurs. Through using @RISK's simulation models, Dr. Shakya's research concluded that, after a few years of what looked like out-of-money (financial losses) option, the traits ultimately became profitable after passing the third stage of development, and later during commercialization. "Had it not been for this model I developed via @RISK, most people would not have invested in the development of trait because in the first and second stage of commercialization, the option looked like it was a loss," says Dr. Shakya.
Now, as a faculty member at CSUMB, Dr. Shakya has advocated for and introduced @RISK for his and other classes, so that students can learn the benefits of quantitative risk analysis in business and operations management. With support of CSUMB, he is in the process of helping to develop a bachelor's program in AgBusiness program that will be a unique program focusing on supply chain management, perishable and non -perishable agricultural commodities, precision agriculture, alternative Ag technology (like vertical farming, genomics, water management etc.) and sustainability while covering subjects like viticulture and Ag tourism to meet the needs of the Salinas Valley and beyond. It will complement the programs at UC Davis and Cal Poly, San Luis Obispo. This new program will have a rigorous training in using @RISK to evaluate and model uncertainties in crop rotation plans, inventory management, and the dynamics within the perishable commercial agriculture supply chain. "Our plan is to not just @RISK, but also the DecisionTools Suite," says Dr. Shakya. "Particularly, we would use StatTools."
If approved, this new Bachelor's program would be active and running by 2017.
» Read Dr. Shakya's paper that got him hooked on @RISK
» More about the DecisionTools Suite
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
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Agricultural Planning Under Uncertainty
Excerpted from Decision Making Under Uncertainty with
by Wayne Winston, published by Palisade Corp.
At the beginning of each season farmers must determine how to utilize their land. The weather is highly uncertain and one strategy might be best for a dry season and another strategy may be best for a wet season. In the presence of uncertainty about climate, how can a farmer determine a land utilization strategy that maximizes his/her
» Download example file and step-by-step instructions
Turning Inputs On and Off in @RISK
Q: Is there an easy way to turn input variables on and off? I would like to try a simulation with some of the variables turned off, but I don't want to replace the distribution formulas with constants because I will want the distributions to vary again in later simulations.
Yes, you can lock any input. To lock an input, do any of these:
- In the Model Window, right-click the input and select Lock Input from Sampling. (You can select multiple distributions with shift-click or ctrl-click, and lock all of them in one operation.)
- In the worksheet, right-click the distribution and select Define Distributions. In the Define Distribution dialog, click the fx icon near the top right to open the Properties dialog. On the Sampling tab of that dialog, click Lock Input From Sampling.
- Edit the distribution formula in the worksheet to insert a RiskLock( ) property function.
During a simulation, a locked input always returns its static value (if specified) or alternatively, its expected value, or the value specified through the options under When a Simulation is Not Running, Distributions Return of the Simulation Settings dialog.
» View other Techniques and Tips here
The DecisionTools Suite is part of complex analyses published in white papers.
Valuing New Random Genetically
Modified Traits in Corn
Sumadhur Shakya, William W. Wilson, and Bruce Dahl; 'Journal of Agricultural and Resource Economics' - April 2013.
There are numerous genetically modified traits currently being developed for corn, which include, but are not limited to, drought tolerance, cold tolerance, and nitrogen use efficiency. The authors of 'Valuing New Random Genetically Modified Traits in Corn' used @RISK and Monte Carlo simulation to capture the risks and returns associated with some of these traits by using real-option methodologies versus the more conventional net-present-value methods. The authors' approach views how managers approach R&D investment decisions through time; and how they confront uncertainties and decisions about whether to continue, wait, or abandon at each phase of development.
Read the full paper here
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
» Professor Hooked on
@RISK Brings its Benefits
to Cal State Monterey Bay
» Licensing Options
» Teaching Tips &
» Tech Tip
Turning Inputs On and Off
» Featured White Paper
Valuing New Random
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