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Decision-Making and Quantitative Risk Analysis using @RISK

This hands-on course is designed for anyone who takes business decisions under uncertainty (risk) as part of their daily activities. The course will explain how quantitative risk analysis facilitates decision quality with all industries and modelling requirements catered to. While mainly using common examples such as project cost estimation and discounted cash flow models to help explain the software and techniques, the knowledge gained can be applied to any application involving uncertainty.

Attendees will be introduced to the concepts and methods necessary to develop a risk assessment and to make a defensible decision under uncertainty using Palisade Corporation software. Discover how to translate deterministic Excel analysis into an @RISK model that can be used to quantify exposure and test mitigation strategies. The importance of correlation is discussed, as well as how to implement it in spreadsheet models. Business and modelling decisions will be compared using special @RISK functions and charts. Several key modelling concepts will be introduced, as well as creating report templates. Examples will be presented and created which will demonstrate how to effectively use the software and to interpret the results.

Please note: Participants bring their own laptops. (No laptops are provided.)

Prerequisites:

Experience of building models with Excel
Minimum requirements include knowledge and experience of the following:

  • Opening, saving and closing Excel files
  • Entering data and creating formulas
  • Copying formulas, using relative and absolute referencing, range names
  • Formatting cells
  • Recommended - completion of applicable software tutorials on the Palisade website
  • Recommended - some familiarity with basic statistics

Day 1:

8am-4pm

An introduction to risk analysis using @RISK, including adding uncertainty to models and interpreting output.

  1. Introduction to Probability, Monte Carlo Simulation and Statistics
  2. Exploring the @RISK environment
  3. Adding uncertainty to deterministic models
  4. Simulating and simulation settings
  5. Output and results interpretation

Day 2:

8am-4pm

Extends on the concepts of the first day, including making defensible distribution selections and adding risk registers to models.

  1. Reporting simulation results in Excel using @RISK Simulation Statistics functions
  2. Discrete distributions
  3. Applying risk registers to models (different examples)
  4. Model logic
  5. Choosing the ‘right’ distribution
  6. Fitting distributions to data

Day 3:

8am-4pm

Explores the importance of correlations when building realistic models, examines how to perform scenario analysis, and model uncertainty in a time series. The day finishes with a run through of the companion products in the DecisionTools Suite (subject to time).

  1. Justifying expert opinion using Alternate Parameters
  2. Scenario analysis using the RiskSimTable and stress analysis
  3. Correlation – its importance and implementation
  4. Stochastic time series forecasting
  5. Demonstration of companion tools in the DecisionTools Suite: TopRank, PrecisionTree, Evolver, RISKOptimizer

Program Level: Intermediate

Prerequisites: Familiarity with Microsoft Excel. No Advanced Preparation required.

These courses are Group Live Offerings. Credits available per hour of instruction: 1 PMI Professional Development Unit, 1 PDH toward AACEI certification.


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Palisade Corporation
130 East Seneca Street
Suite 505
Ithaca, NY 14850
800 432 RISK (US/Can)
+1 607 277 8000
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