2019 Palisade Risk Conference

2019 Palisade
Risk Conference

San Antonio, Texas • November 12–13, 2019

Join us for two days of insights into risk modeling and decision making.

About

Discover the practices that move organizations from uncertainty to opportunity

Risk analysis is at the core of better, more informed decision making. The future is uncertain, and we all need tools to understand risk in our world. In complex business environments, decision makers need to assess risk in a quantitative manner. Risk and decision analysis professionals play a key role in helping to minimize potential impacts, and take advantage of opportunities.

San Antonio

Join risk professionals from across the world, and from diverse industries, to meet for the Palisade Risk Conference in San Antonio in November. Hear from fellow risk modellers, share in-depth examinations of novel solutions to complex problems, and be inspired to bring new insights and skills back to your models.

Past presentations have demonstrated how @RISK and the DecisionTools Suite are used for supply chain management at Amway, valuing R&D projects at Novelis, modeling capital appropriations at BorgWarner, decision making processes at Unilever, and project management at Lockheed Martin and NASA.

Testimonials

From previous events

  • We saw and discussed methods that directly apply to our problems, and learned to build upon them to come up with solutions.

    –Michael Watson, PMP, Senior Staff Integrated Planning, Lockheed Martin
  • A great opportunity to meet both experts from other industries and risk analyst professionals. I gained new insights both from presentations as well as discussions.

    –Joerg Guenther, IKB Deutsche Industriebank AG
  • Learned several things I will be able to take back and directly use.

    – Bob Hess, Senior Principal Engineer, SRP

Gallery

Memorable moments from previous events

Why Attend

  • Our biggest event of the year:
    2 full days, multiple tracks
  • Learn to enhance models using quantitative
    risk analysis–direct from modelers
    and problem solvers
  • Discover the techniques that lead to more
    confident business decisions
  • Network with 200 analysts and experts
    who solve similar problems
  • Take advantage of 1-1 Expert Sessions
    for insights into your models
  • Get 2 full days of risk modeling
    expertise at a great value

Agenda

(Agenda is tentative and subject to change)

  • 8:00 - 9:00
    Registration and coffee
  • 9:00 - 9:50
    Welcome and conference kick-off
    Randy Heffernan, CEO, Palisade
  • 10:00 - 10:50
    • Introduction to risk analysis using @RISK
      Dr. José Raúl Castro Esparza, Palisade
      Software presentation

      This introduction to @RISK will walk you through a risk analysis using various example models. Key features of @RISK will be highlighted. You will experience the intuitive interface of @RISK as you define distributions, correlations, and other model components. During simulation you will be able to see all charts, thumbnails, and reports update in real time. View results with a variety of graphing and reporting options. There’s so much to see, we’ll cover as much as time permits.

    • Using @RISK with Earned Value data to perform Cost Risk Assessment of an on-going Earned Value project
      Scott Berg, Managing Partner, ClearPlan Consulting
      Case study - Aerospace

      Managing cost risk for projects is a challenge. So many things can go sideways. Budgets are often tight. Efficient resources are often scarce. Suppliers can be unreliable. Project teams’ Estimate at Complete (EAC) can be distorted by optimistic assumptions and/or biases of the project teams, group think, or the attempts to hide poor performance. Cost Risk Assessment (CRA) can quantify potential variations, as well as identify the magnitude of project risks and opportunities. It can also provide an objective second look at the EAC of the project, based on current project performance, as well as objective historic performances of similar work.

      Earned Value provides the basis of objective risk assessment. By objectively measuring the project performance in the technical, cost and schedule aspects of the project Earned value facilitates the identification of the activity (what) and the responsible party (who). It makes easy the establishment of accurate best case/medium case/worst case cost estimates for any defined work scope.

      @RISK allows for the estimation of cost risk by work element, comparison of risks and identification of the riskiest aspects of the projects. @RISK is especially robust because it allows for the risk profile of specific scope to be tailored by probability distribution and variation. @RISK also allows for realistic correlation (both positive and negative) of related elements of the project. @Risk outputs are ley to allowing management to make more informed decisions regarding resource allocation, project execution techniques and management reserves.

    • Activity based costing + @RISK = profit enlightenment
      Edward Jaeck, Lowell Inc
      Case study - Operations

      In this case study, we will continue our presentation from last year's Palisade Risk Conference, where we shared some cost modeling we had started. Now, we have completed the product cost model build for the top ten customers. We then break apart each customer to see actual costs vs selling price to arrive at a profit estimate with 95% confidence bounds. To do this, we build a model in @RISK that parallels the process flow from our ERP system. Then we gather historical data for each of the process steps, fit the data using the fit distribution function and combine with our cell-based costing charges and run the simulation. The simulations quickly tell us where the variability is coming from based on the sensitivity plots and we use that to help determine where to apply our limited resources to improve profit drains.

  • 10:50 - 11:20
    Break
  • 11:20 - 12:10
    • Introduction to optimization, decision trees and sensitivity analysis using the DecisionTools Suite
      Rishi Prabhakar, Palisade
      Software presentation

      Palisade's DecisionTools Suite package provides a number of different tools for risk and decision analysis. In addition to @RISK, popular tools in the set include TopRank, a powerful program which allows fast and easy sensitivity analysis on any Excel model, PrecisionTree which allows users to build decision trees for evaluating options, and Evolver/RISKOptimizer for building optimization models. We will look at some example models that demonstrate the capabilities of each of these tools.

    • The Enigma Machine: Incorporating Creative Problem Solving with the DecisionTools Suite
      Brendan McGrath, Senior VP, Federal Home Loan Bank of Indianapolis
      Case study - Banking & finance

      How do you solve a problem with more than 150 million million million potential combinations on only one right solution? @RISK and the DecisionTools Suite are powerful tools to find the best solution to a problem, but what happens when a problem seems impossible to solve through straightforward means? Can you simplify the problem before trying to solve it? This presentation is intended to be a fun overview of the history and inner workings of the Enigma machine and the techniques used to make what was (at the time) an unsolvable problem solvable. These techniques then can then be combined with @RISK and the DecisionTools Suite to tackle complex problems in the real world.

    • One-size-fits-most: The good, bad and ugly of using standard models to support decision-making
      Dr. Jane Pouzou, EpiX Analytics
      Case study - @RISK model building

      Business firms often face multiple seemingly unique decisions, large- and small-scale, ranging from investment in R&D, licensing decisions, or deciding to invest in new strategic initiatives. Because of their apparent uniqueness, analysts often end up repeatedly building and rebuilding similar financial forecasting models to evaluate the risks and returns of these decisions.

      Should every decision be supported by its own unique @RISK model? Or could one (or a few) template models support many different decisions? How can we build a template if we don’t yet know tomorrow’s decisions?

      Based on our experience building many one-off models, as well as designing and developing a wide variety of template/standard models, in this presentation, we will discuss:

      • Why consider developing one (or multiple) template models?
      • In what situations are template models the most useful, and when less so;
      • Do’s and don’ts of designing and building a template
      • How to make sure the template delivers the intended value to the organization.

      EpiX Analytics has used @RISK to build many different standard models capable of stochastic simulation and risk-adjusted outcomes as well as deterministic base-case analysis for a variety of firms. Within this presentation, we will also discuss and show several different example anonymized template models, in energy and health/pharma.

  • 12:20 - 1:10
    • Selecting the right distribution to use in @RISK
      Dr. Steve Van Drew, Palisade
      Software presentation

      This session covers choosing the appropriate distribution in @RISK. A variety of approaches are presented and compared, including pragmatic, theoretical and data-driven methods. The use of distributions to treat a variety of risk modeling situations is discussed, and some more advanced features such as bootstrapping, batch fitting, and the live fit function will be covered as time permits.

    • Using the DecisionTools Suite 7 to Perform Schedule Risk Analysis on DoD Agile Projects
      James Knapp, Mike Gallagher, Tecolote Research
      Case study - Defense & aerospace

      @RISK and DecisionTools Suite are indispensable tools for estimators in the Department of Defense (DoD) especially when it comes to complex projects. In order to properly manage complex projects risk must be assessed, monitored, accepted, avoided and managed. DoD projects are complex but must also be developed in a rapid fashion. Hence the DoD, just like industry, has pivoted to agile development.

      The goal of agile is to produce shorter development cycles and more frequent product releases than traditional waterfall project management. The shorter time frame enables project teams to react to changes more effectively. The DoD produces weapon systems to fight a dynamic enemy. So the agile model blends well with the modern DoD mission.

      However, estimation of dynamic projects can be very challenging. In this presentation we will show how @RISK and the Decision Tool Suite have helped the modern DoD estimator pivot to agile. We will show how we perform schedule risk analysis within the model of continuous iteration. We will demonstration how story points, back log and sprints are utilized to properly estimate capability delivery to the DoD end user. Moreover, we will demonstrate how the @RISK tool is a must have in modern/agile risk analysis.

    • Bettor Up - Tools, tips and tricks
      Clay Graham, Advantage Analytics, LLC/Matt Turnipseede, MoneyLine Analytics, LLC
      Case study - Sports gaming

      With the recent legalization of sports gambling (May 2018), the interest on how to beat the systems has generated a proliferation of Charlatans, Buffoons and Idiots ready to take your money for some really ill-conceived advice. We aim to provide insights from a mathematical modeling, sports and professional investment perspective in order to measure risk and achieve sports gambling success.

      The presenters will outline a pragmatic approach to modeling, including:

      • a lower risk, high volume algorithm will be discussed highlighting a decade of successful sport gambling consistently yielding over 20% per annum.
      • a distribution focused family of models will be outlined through the incorporation of: Dynamic discrete density functions, Time sensitivity analysis, Data / information relevancy through filtering, Capitalizing upon compound interest, i.e., using the house’s money to make a fortune.
      • the discovery of a flaw in the Football (US) lines will detailed along with simple heuristics that can be put to use immediately after the presentation to capitalize on market inequities.

      The Palisade products used throughout the analysis include: @RISK, Evolver, and StatTools.

  • 1:10 - 2:10
    Lunch
  • 2:10 - 3:00
    • Exploring Custom Solutions using Palisade Technologies Software: Examples from Finance, Manufacturing, Project Management, and More
      Gustavo Vinueza, Palisade
      Software presentation

      Palisade Custom Development has written dozens of different types of specialized applications using the functionality of @RISK, PrecisionTree, TopRank, and other DecisionTools products. These applications run the gamut of industry sectors and are specifically designed to accomplish just what the client needs. In this way, Palisade custom-designed applications simplify the rollout of powerful decision-making analytics within organizations by reducing learning curves and removing any potentially confusing options for users. Interfaces, model logic, and reports can all be tailored to the client's exact specifications, driven by powerful Palisade analytics "under the hood."

      Most Palisade custom solutions run directly in Excel, using VBA and the Excel Developer Kit (or XDK) feature of the DecisionTools Suite programs. Some are built using the @RISK Developer Kit (RDK), a programming toolkit that runs outside the Excel platform and can be used on a web server.

      This session will highlight a number of interesting examples of different types of custom applications we've done. They include cost estimation, risk registers, asset management, retirement planning, oil and gas prospecting, and more.

    • Optimizing dual mode inventory replenishment
      Francisco Erize, Supply Chain Strategy Senior Manager, Dell
      Case study - Supply chain, technology

      In absence of a close solution to determine optimal inventory policies when two replenishment modes are used simultaneously, simulation can be used to test alternative policies and determine an optimal recommendation.

      To identify a dominant strategy further, analytical work will be needed. Through simulation one can at least determine how to balance the cost of supporting a target service level through on hand inventory, use of low cost logistics or use of fast replenishment modes.

      The solution provides a practical policy that can be implemented to select replenishment targets for both replenishment modes for each SKU managed, based on the individual performance of their running forecast accuracy.

    • Estimating Delivered Biomass Fuel Supply Costs for New Power Plants - Two case studies from Cote d'Ivoire and New South Wales Australia.
      Dr. William Strauss, FutureMetrics
      Case study - Energy

      The developers of the Cote d'Ivoire project needed to understand the delivered cost of biomass fuel (cocoa shells). FutureMetrics developed a model and using @RISK provided guidance on potential fuel costs and thus on the overall cost of generation. The government of New South Wales Australia is considering supporting the construction of a new biomass fueled power plant. FutureMetrics gathered data on 329 plantations and sawmills. The solution to a constrained optimization problem was solved using RISKOptimizer to find the optimal location that minimized the delivered cost of fuel. One contraint was that the location has to be within 3 kilometers of a high-voltage transmission line for interconnection. This talk will discuss the foundation of the modeling and how @RISK and RISKOptimizer were used.

  • 3:10 - 4:00
  • 4:10 - 6:00
    Welcome reception
  • 8:00 - 9:00
    Registration and coffee
  • 9:00 - 9:50
    Keynote address: You Can Do This! Crafting and Maintaining the Power of the DecisionTools Suite
    JD Solomon, Jacobs

    The DecisionTools Suite has traction in every industry sector. Crafting and maintaining a viable practice in your own organization, or in some cases for clients as a trusted advisor, can nevertheless a tough proposition. Risk and uncertainty experts are usually challenged by executive management and their peers regarding the applicability of their approach. And worse, it can seem impossible to develop the funding and teamwork it takes to build a sustainable program. The keynote will provide insights and pointers on how to do it, regardless of your industry. You can do this!

  • 10:00 - 10:50
    • Tips & tricks in @RISK
      Palisade
      Software presentation

      While many of the common features of @RISK have been explored in depth, there are some advanced and underutilized features that can add a lot of value to your modeling. This session will explain a number of tips and tricks, including: fitting distributions to output simulation data, custom reporting, filtering, and storing simulation data.

    • Modeling Litigation Outcomes with @RISK and PrecisionTree
      Chilwin Cheng, Ascendion Law
      Case study - Legal

      This presentation will demonstrate how litigation firms can use PrecisionTree and @RISK to model litigation outcomes for clients. I have used the tools to help clients to better understand their exposure to adverse damage awards, potential criminal conviction, and prospects for appeal.

      We use various methods to assign probabilities to nodes on a decision tree or to set the distribution of outcomes in an @RISK model. I will demonstrate how I use a scale of certainty to help normalize assessments of success based on legal principles. "Proof beyond a reasonable doubt" suggests a 95% certainty. Proof on a "balance of probabilities" (the civil dispute standard) suggests a 60% probability. We also take data sets out of previous cases, say a sample of 100-200 cases on a given legal issue, to help us provide the probabilities to enter into various nodes on a decision tree.

    • @RISK Models $50B Acquisition Project by the US Government for Telecom and IT Service
      Raleigh Griffith, Management Concepts Inc.
      Case study - Government

      Application: Schedule & Cost Risk, Enterprise Infrastructure Solutions (EIS) for all agencies voice & data services.

      GSA used @RISK throughout the project, which was performed on-time and on-budget. @RISK helped GSA executives understand the impacts of their decisions on schedule and cost within the framework of quantitative risk management.

      Project simulation with @RISK enabled us to provide the agencies firm schedules. They could then stage thri resources in a timely way to select their EIS vendor to obtain the earliest and greatest possible savings to the taxpayer.

  • 10:50 - 11:20
    Break
  • 11:20 - 12:10
    • Data analysis and prediction with StatTools and NeuralTools
      Mirek Janusz, Palisade
      Software presentation

      In this session you will learn how to use Palisade’s two data analysis tools - StatTools and NeuralTools.

      StatTools is a Microsoft Excel statistics add-in. This session will cover how to perform the most common statistical tests, and will include topics such as - Statistical Inference, Forecasting, Data Management, Summary Analysis, and Regression Analysis.

      NeuralTools imitates brain functions in order to “learn” the structure of your data. Once NeuralTools understands the data, it can take new inputs and make intelligent predictions. The new predictions are based on the patterns in known data, and offer uncanny accuracy. NeuralTools can automatically update predictions when input data changes, and it can even be combined with Palisade’s Evolver or Excel’s Solver to optimize tough decisions and achieve desired goals. This session uses easy-to-understand examples to demonstrate applications of NeuralTools predictions. We will also touch upon some of the exciting new procedures in StatTools.

    • The use of Monte Carlo simulation and the DecisionTools Suite for start-up valuations and return on investment analysis for private markets
      Robert Brammer, Brammer Technology
      Case study - Finance

      This presentation describes methods for analyzing potential valuations for start-up companies as they move through growth stages from seed funding through early and late stage investments to various exits, including initial public offerings and strategic acquisitions. Methods for analyzing these investments have become increasingly important as the private markets, notably the venture capital and private equity funds discussed here, have grown rapidly in the past decade. For example, more than $3 trillion flowed into these funds from 2009 through 2018.

      We start with analyzing single company valuations using a variety of techniques, including those in the International Private Equity and Venture Capital Valuation Guidelines. Monte Carlo techniques provide probabilities of various valuations in the evolving growth stages. We use data from a variety of organizations, including the National Venture Capital Association, the Risk Management Association, Pitchbook, BizMiner, and others to derive the parameters for the probability distributions used by @RISK in the valuations. We also use PrecisionTree to visualize these various stages. The return on investment analysis shows the potential returns for various classes of investors, including preferred stock, convertible debt, and common stock and includes the effects of various terms and conditions, notably participation rights and investment caps. We conclude the presentation by showing how we use RiskOptimizer to mitigate investment risks within a fund portfolio.

    • How to Avoid “Chapter 22” in Oil & Gas Bankruptcy Work Using @RISK
      Thomas J. McNulty, Great American Group
      Case study - Oil & gas

      Commodity price volatility typically is very high; since 1986 the standard WTI contract has seen an average annual price volatility of just under 40%. This makes restructuring work that much more difficult, because modeling a company going through a workout with top-line revenue driven by oil and gas prices is very challenging. Bankruptcy work in this business needs to be done differently to account for this unique element. The assumptions that drive the cash flow models used to restructure an oil company in distress should be simulated.

      “Chapter 22” is a non-technical term that refers to a company that files for bankruptcy a second time, after just 2-3 years. It is a growing phenomenon here in the Texas Energy Market, and its root cause can be traced to a failure to restructure the company properly the first time. Given the often-extreme volatility that we see with oil, natural gas, and natural gas liquids prices, this kind of work should be done using probabilistic models. Specifically, Monte Carlo Simulation using @RISK results in far better post-bankruptcy structures that can endure severe price movements. These techniques help the companies, lawyers, and bankers to avoid over levering the company a second time.

      These are the key elements that should be simulated, tested, and stressed:

      • Crude Oil Prices
      • Natural Gas Prices
      • Natural Gas Liquids Prices
      • Production Volumes
      • Lease Operating Expenses
      • Capital Expenditures
      • Floating Interest Rates
      • G&A Expenses
      • Asset Divestitures
      • Covenants
      • Seniority Waterfalls
      • Debt Service Coverage Ratios
      • Bank Recovery Levels
      • Probabilities of Default

      Our Case Study will illustrate the use of these techniques to properly restructure a real distressed oil company, including the functional model in Excel with @RISK. The names will be redacted, and some of the details obscured, to remain in compliance with CAs and NDAs that exist to this day. The company did survive and has not been forced into a “Chapter 22” situation.

  • 12:20 - 1:10
    • Finding optimal solutions with RISKOptimizer and Evolver
      Rishi Prabhakar, Palisade
      Software presentation

      RISKOptimizer and Evolver use powerful algorithms to perform optimization in Microsoft Excel. RISKOptimizer – an advanced analytical tool that comes with @RISK Industrial – builds on traditional optimization by adding Monte Carlo simulation to account for uncertain (stochastic), uncontrollable factors in your optimization problem. RISKOptimizer and Evolver employ genetic algorithms to arrive at solutions to nonlinear problems that are impossible to find using traditional methods, and they also offer different methods for quickly solving other types of problems.

      This session introduces you to these powerful tools, showing you how to set up a model, define constraints within the model, and ultimately arrive at the optimal outcome. These steps will be illustrated by means of a detailed retirement portfolio optimization example.

    • How to improve project schedule success by better estimation - Application of next generation risk management tools
      Dr. Prasad Kodukula PMP, PgMP, Yun Zhang, MMF, Kodukula & Associates, Inc.
      Case study - Project management

      Project schedule delays are ubiquitous. Most projects exhibit less than an even chance of being completed on time. A frequent question that grapples many project teams: How to improve the chances of schedule success? A common reason for not meeting schedule targets is ignoring risks in the estimation process. Many organizations have recently adopted risk registers and qualitative methods to manage risks. While these methods are a first step, a strong need exists for more sophisticated next generation (nextgen) tools involving quantitative analysis. Such tools enable more realistic and accurate schedule estimation and facilitate a greater project success rate. In this presentation we will demonstrate nextgen project risk management by hands on application of @RISK software using a hypothetical project example based on real world scenarios experienced in many industries. What you will learn includes:

      • Four types of risk you must consider in schedule estimation
      • Application of simulations to analyze schedule risks
      • Four key probability distributions you must understand
      • A novel approach for estimating schedule reserves
      • A sure-fure way to miss schedule targets and what to do about it
    • Reducing cost risk exposure with @RISK at Cameron within the project lifecycle
      Tony Schurle, Cameron, A Schlumberger Company
      Case study - Oil & gas

      Engineering, Procurement and Construction (EPC) projects are used extensively across the oil and gas industry. They are inherently risky with different players, operators (oil companies), drilling contractors, fabrication yards, etc. all seeking to pass on the programmatic risks to other players, especially the equipment package suppliers such as Cameron Drilling Systems which is a product line of Schlumberger. Suppliers who can effectively manage these risks realize a competitive advantage over their competition. The Cameron Drilling Systems risk management process is defined and used throughout the project lifecycle, enabling Cameron Drilling to accept higher risk projects and maintain profitability while continuing to serve our customers’ needs. Throughout the project life-cycle process Cameron Drilling Systems uses several tools and techniques to proactively manage identified risks. These tools and techniques include being able to rapidly assess risks during the quote stages, conducting risk workshops during negotiations or following contract award, providing quantitative risk analysis using Palisade's @RISK software, defining gate deliverable requirements to mitigate reoccurring risks and overall sustainment of the process by promoting risk awareness throughout the organization. By using the @RISK Monte Carlo simulation as an integral part of the overall project lifecycle process, Cameron Drilling Systems can make objective based decisions on individual risks and the overall project along with improving our visibility on the reoccurring high-risk events.

  • 1:10 - 2:10
    Lunch
  • 2:10 - 3:00
    • Decision modeling with PrecisionTree
      Dr. José Raúl Castro Esparza, Palisade
      Software presentation

      PrecisionTree is a powerful visual and analytical tool for mapping out complex, sequential decisions using decision trees directly in Excel. Using nodes, branches, and probabilities, you can represent and organize decisions ranging from oil prospecting to site development to options analysis. This presentation combines an introduction to the PrecisionTree interface with demonstrations of how PrecisionTree can be used to analyze various problems in decision analysis.

    • Using @RISK for turn-around scope definition
      Dr. Chandrasekhar Gannavarapu, LyondellBasell
      Case study - Chemicals
    • Flexible crop lease arrangements - Using @RISK to set flex lease provisions on agricultural land
      Jim Jansen, and Dr. Jeff Stokes, University of Nebraska-Lincoln
      Case study - Agriculture

      Agricultural, commercial, and retail properties use flexible lease arrangements in renting of properties across the United States. Flex provisions seek to more equitably divide revenue generated from the operation of the leased assets and allow for risk sharing between tenant and landlord. Determining the appropriate parameters for flex lease provisions create uncertainty as production, prices, or sales may fluctuate due to risk in unforeseen events. Subject to these terms, one party may benefit more from the flex lease over the other.

      This presentation demonstrates an @RISK procedure for estimating parameters to use in a flex lease on agricultural land when prices and yields are stochastic. The results show how an upper bound on a flex lease provision can be estimated thereby providing a starting point for negotiations between a landlord and a tenant.

  • 3:10 - 4:00
    • Forecasting multiple currencies using @RISK’s time series analysis tool
      Gustavo Vinueza, Palisade
      Software presentation

      @RISK’s tool for time series analysis can be employed in a multi-currency portfolio to adequately forecast the probabilistic pathways of correlated currencies into the near future. This tool can be used for short-term financial planning such as applying hedging strategies. The time series analysis tool can also be modified to test for extreme cases; in other words, sensitizing future currency forecasts under extreme market situations. This is called stress analysis.

    • Developing/performance of a neural network model to assign an implied S&P credit rating to private entities
      Ronald J. Statt, Arizona Public Service Company
      Case study - Finance & investment

      Prior to entering into a contract with a company where one may be financially exposed, it is important to access the company’s financial health. Specifically, it is imperative to determine the company’s capacity to meet its financial obligations to pay off debt. Gratefully, the credit risk industry has developed hierarchical credit rating systems to inform the public of the risk of default, relative to other public companies, based on their financial metrics. The three largest credit rating agencies, Standard & Poor’s, Moody's and Fitch Group, rate a large portion of companies who publicly trade their stock. However, there are tens of thousands of private companies who are not rated by these agencies. Many of these companies are willing to provide their audited financial metrics (confidentially) for one to determine their credit worthiness.

      This presentation demonstrates how to build a neural network model using @RISK that will assign an implied S&P credit rating to a private company that provides the necessary financial metrics. It will discuss where to acquire the metrics for thousands of companies needed to build the model, how to scrub the financial data, how to select the final set of metrics to be used in the model, how to determine the size of the test group, how to identify and correct for possible bias, and how to apply a validation process to select the final neural network model. The model’s performance has proved to be very beneficial to all of the credit risk analysts at APS.

    • The Optimizer’s Curse and its impact on project selection and simulation optimization
      Gary J. Summers, Pipeline Physics LLC
      Case study - @RISK model building

      Replacing expected values with probability distributions, a major application of Monte Carlo analysis, incorporates more uncertainty into a model, thus reducing the difference between the model and reality, which improves decision making. This happy outcome requires Monte Carlo analysis to produce probability distributions that match reality, a challenging requirement, especially in industries that have highly skewed distributions of profits, such as energy and pharmaceuticals. Intensified by the shew, forecasts for above-average profits are, on average, too high, often significantly so, even when a model’s data is unbiased. The result: the probability distributions produced by Monte Carlo analysis incorrectly describe projects. Selection suffers, especially selection supported by simulation optimization, which presents decision-makers with erroneous expectations of return and risk. This presentation introduces the optimizer’s curse, explains how biased forecasts arise from unbiased data, shows how the problem affects simulation optimization, and provides solutions. Additionally, it presents techniques for evaluating forecasted probability distributions ex-post, based on a decision’s results.

  • 4:10 - 4:40
    Developer's Roundtable
  • 4:40 - 4:55
    Closing and a Look Ahead
    Randy Heffernan, CEO, Palisade
Return to the top of the agenda

Presenters


  • Scott Berg
    Earned Value Consultant
    ClearPlan Consulting

    Scott Berg is an Earned Value consultant with ClearPlan Consulting. He has worked on numerous programs of diverse size, complexity and nature as a cost analyst or scheduler. He has consulted as an EV SME for project execution, as well as EV validation. He holds both a BA and MS in Economics from the University of Utah. He taught in-house Earned Value courses at L3-CS-West from 2011-14. He knows more about European soccer than he cares to admit.

    ClearPlan is a Federally Recognized Small Business providing Program Planning, Controls and Earned Value Management Services to Large Federal and other Fortune 100/500 Companies. ClearPlan provides Unmatched Expertise in Building and Running Efficient, Compliant Program Planning and Control Systems for Complex Programs.

  • Robert Brammer, Ph.D.
    President and CEO
    Brammer Technology

    Dr. Robert F. Brammer is the President and CEO of Brammer Technology, LLC, a consultancy focusing on advanced information technology, environment and climate, and security. He retired as VP and chief technology officer (CTO) for Northrop Grumman's Information Systems sector. He was responsible for technology strategy and Independent R&D programs, technology partnerships, technical talent development, and intellectual property management.

    Dr. Brammer has a BS degree in mathematics from the University of Michigan, and MA and Ph.D. degrees in mathematics from the University of Maryland. He is a member of Phi Beta Kappa and Phi Kappa Phi and is a Woodrow Wilson Fellow. He received achievement awards for work on the Apollo program and for principal investigator research on NASA and NOAA satellite programs. He is a Fellow of the Society of Photo-Optical Instrumentation Engineers and of the American Meteorological Society. He is also a senior member or member of several other professional societies, including the IEEE, ACM, ABA, and AGU. Dr. Brammer has published numerous research papers in the journals of these societies.

  • Chilwin Cheng
    Managing Partner
    Ascendion Law

    Chilwin is an experienced business litigator with deep experience in commercial litigation, white collar defence and regulation- having been former Chief Counsel of the regulator of Canada's public equities markets and trading systems and a former prosecutor with a securities commission.

  • Dr. Steve Van Drew
    Trainer and Consultant
    Palisade

    Dr. Steve Van Drew embodies the jack-of-all trades (master of some?) lifestyle as a former leader/manager, academician, and analytical practitioner, with a multi-disciplinary education in engineering, applied economics, and management science/operations research. Steve enjoys a busy, hobby- and grandchildren-filled “retirement” near Richmond, VA, and yet manages to dedicate time to share his passion for spreadsheet modeling and @RISK.

  • Francisco Erize
    Supply Chain Strategy Senior Manager
    Dell

    Francisco has worked in financial services, broadband internet and cable TV industry, services operations and is now working as Supply Chain Strategy Senior Manager at Dell. His specialties are customer support services operations, corporate strategy, supply chain operations, network optimization and inventory management and optimization.

  • José Raúl Castro Esparza, PhD, MBA
    Trainer and Consultant
    Palisade

    José Raúl Castro Esparza is a consultant and a full time professor at BUAP (Benemérita Universidad Autónoma de Puebla) in Puebla, Mexico where he co-founded the career of Actuarial Sciences. He earned his bachelor’s degree as an Actuary from Universidad de las Américas, Puebla (UDLAP), an MBA at Universidad Iberoamericana (IBERO) and a Ph. D. in Finance from Universidad Popular Autónoma del Estado de Puebla (UPAEP). Dr. Castro’s experience accounts for over 10 years in the chemical industry, working in the areas of Financial and Logistics Planning for companies such as Ciba-Geigy, Novartis Crop Protection and Syngenta. In the academic field he has taught for over 20 years a variety of Risk Analysis and Computer Modeling courses at a graduate and undergraduate level.

  • Mike Gallagher, MBA, PMP
    Director of Communications and Protection
    Tecolote Research

    Jim is a former Acquisitions Officer for the United States Air Force. He has over 19 years of program experience with a background in Aircraft and Space Based operations. He is a skilled program manager who has worked with the government on numerous programs. Jim is a certified Project Management Professional (PMP) and is skilled in System Engineering, Cost Estimating, Risk Analysis, Integrated Master Schedule Development and Quantitative Schedule Risk Analysis. He earned a BS from the United States Air Force Academy, MS from Boston University, and an MBA from the Naval Postgraduate School with a concentration in Systems Acquisition Management.

  • Chandrasekhar Gannavarapu
    Senior Manager, Global Risk Analytics
    LyondellBasell

    Chandra Gannavarapu is currently serving the role of Senior Manager in Global Risk Analytics group at LyondellBasell Industries. He lead the effort to establish this Global Risk Analytics group, for providing centralized financial risk analytics support, and managing the development and maintenance of financial risk models. He manages all the quantitative-based financial risk assessments and @RISK modeling efforts in areas such as commodity pricing, foreign exchange, interest rates and liquidity risk. Chandra has 25 years of experience in process modeling, advanced process control and optimization. Prior to this role, he served as the Business Solutions Lead at LyondellBasell’s Olefins Optimization group, worked at other companies including, Aspen Technology Inc., APC Consulting, and Dow Benelux, focused in the areas of modeling and advanced process control. He holds a Ph.D. in Chemical Engineering from the University of Sydney, a Master’s degree from Indian Institute of Science, and Bachelor’s degree from Osmania University.

  • Clay Graham
    Chief Analytical Architect
    Advantage Analytics, LLC/MoneyLine Analytics, LLC

    Clay is an analytical professional with broad experiences in mathematical modeling. Applications include and are not limited to: Aerospace engineering, Financial stochastics (merger and acquisition), Educational value and performance measurement, Sports gaming (gambling). He started his career with A.T. Kearney, Inc. Since then he’s been an entrepreneur owning and operating companies in the – metal finishing, management consulting and aerospace industries. He holds a BS from Purdue and graduate degrees in economics and business (Kellogg Graduate School of Business) and is an Adjunct Professor at DePaul University.

  • Raleigh Griffith
    US Federal Government Portfolio Risk Management
    Management Concepts, Inc.

    With 18 years of experience working in the Federal Industry on both industry-side and agency side, Raleigh has lead both Pre-Award and Post-Award business operations at Portfolio, Program, and Project levels. Currently an operations and information management (OPIM) executive (P&L), Raleigh is responsible for developing international policies and procedures that inform and direct government agencies and international stakeholders. He also is an instructor for Analytics and Management Courses.

  • Randy Heffernan
    CEO and Board Member
    Palisade

    For over 20 years, Randy Heffernan has worked in nearly every department at Palisade, including sales, marketing, operations, and development. Working closely with sales and product teams, he has led product launches, entered new markets, and established Palisade offices in multiple new countries. During that time, the company has quadrupled in size and expanded its reach to become the dominant force in modern analytical decision-making and thought leadership.

    Randy’s current focus is to take Palisade to the next level in its 30+ year history. Building on a marketing-leading product and a world-class sales force, he and his team are laying the foundation for the next generation of accessible, powerful spreadsheet-based analytics, with the goal of reaching segments who haven’t yet seen power these tools can bring. Through technological innovation, enhanced outreach initiatives, and operational improvements, Randy is dedicated to expanding Palisade’s footprint and improving the quality of decision-making throughout the business world.

    Prior to Palisade, Randy helped lead the expansion of Enterprise Rent-a-Car in central New York. He also worked in the publishing industry assisting the sales team at Cornell University Press.

    Randy earned a BS in Agricultural Economics and Business from Cornell University as well as an MBA from the Johnson School of Business at Cornell University and the Smith School of Business at Queen’s University.

  • Edward Jaeck
    Vice President of Stregic Growth and Business Development
    Lowell Inc

    Edward is Vice President of Strategic Growth and Business Development at Lowell Inc in Brooklyn Park MN. At Lowell, Edward has overseen the quality and manufacturing groups for the past three years. Over those three years, he utilized a hybrid strategic policy deployment strategy to execute a brand makeover and enable several key developments such as a new best-in-class dimensional inspection laboratory, machine automation, and the attraction of key OEMs

    Prior to Lowell, Edward worked for Medtronic and Intel where he had roles in R&D, Materials, Quality and Supply Chain. Edward has Bachelor’s Degree in Mechanical Engineering, a Master’s Degree in Industrial Engineering and a Master’s Degree in Engineering Management. In addition, he has a Lean Six Sigma Black Belt and has been certified to the ASME GD&T Standard at the Senior Level.

  • Jim Jansen
    Agricultural Economist
    University of Nebraska-Lincoln

    Jim Jansen is an agricultural economist with the Eastern Nebraska Research and Extension Center at the University of Nebraska-Lincoln. His current outreach and publication efforts focus on finance and economics. Jim serves as one of the core team members providing risk management outreach across Nebraska in agricultural production and land management. Jim holds graduate degrees in Agricultural Economics and Agronomy from the University of Nebraska-Lincoln. In addition, he has completed extensive course work in appraisal and land management with the American Society of Farm Managers and Rural Appraisers (ASFMRA).

  • Mirek Janusz
    Lead Software Developer
    Palisade

    Mirek has worked for Palisade as a Software Engineer for 17 years. He is the lead developer of the optimization functionalities as well as the neural network add-in. He holds an M. Eng. in Computer Science from Cornell University.

  • James Knapp, MBA, PMP
    Program Manager
    Tecolote Research

    Tecolote has been a leading provider of cost estimating, financial management, scheduling, risk analysis, and earned value management services for complex acquisition, construction, and integration projects in DoD, DOE, Homeland Security, NASA, and various commercial entities for over 40 years. Mike is a certified Project Management Professional (PMP), who joined Tecolote Research after being honorably discharged as a Captain from the United States Air Force in 2007. He has over 18 years of program acquisitions experience and is currently the Director of Communications and Protection for Tecolote’s Space Programs Group.

    He earned a Bachelor of Science in Management from the United States Air Force Academy, where he was a three-year football letterman and holds an MBA with honors from Webster University.

  • Dr. Prasad Kodukula, PMP, PhMP
    Kodukula & Associates, Inc.

    Dr. Kodukula is a speaker, coach, and entrepreneur with 35 years experience. He has spoken in 45 countries on project management related topics. His clients include 40 Fortune 100 companies. He is Lecturer at the University of Chicago and Adjunct Faculty at Illinois Institute of Technology. Project Management Institute recognized Prasad twice as “Best of the Best” with Eric Jenett Project Management Award of Excellence in 2016 and Distinguished Contribution Award in 2010. Prasad is a co-author or contributing author of eight books and more than 40 articles and holds four patents.

  • Brendan McGrath, CFA, CPA
    Chief Analytics Officer
    Federal Home Loan Bank of Indianapolis

    Brendan McGrath is the Senior Vice President, Chief Analytics Officer and head of the Analytics department at the Federal Home Loan Bank of Indianapolis, one of 11 U.S. government sponsored entities that support housing finance by providing liquidity to its member financial institutions. Brendan joined FHLBI’s investments team in 2000 and has experience in trading, fixed income portfolio management, mortgage analytics, risk management, data analysis and financial modeling.

    Mr. McGrath earned a CFA charter and a CPA license and for six years sat on the Board of Directors for the CFA Society of Indianapolis, including serving as its President from 2009-2010. Mr. McGrath earned a BS in Finance and an MS in Accounting from Indiana University’s Kelley School of Business and is also a member of the Beta Gamma Sigma honor society.

  • Thomas J. McNulty, CQF, FRM
    Managing Director
    Great American Group

    Tom McNulty has 25 years of experience working across the entire commodity and energy value chain. He draws on a rare combination of industry, banking, consulting, and government experience to provide his clients with transaction, commercial analytics, litigation, and valuation opinion services. Tom is a nationally recognized commodity and energy industry expert, and is a frequent contributor on CNBC, Fox Business, and Bloomberg TV.

    As an advisor, and in his corporate career, Tom has delivered more than $52 billion in energy-related transaction, valuation, restructuring, and litigation projects. He has also advised on, or executed, $13 billion in M&A and principal investment deals, and executed or valued more than $14 billion notional in derivative instruments. As a merchant banker, Tom helps management teams grow businesses through acquisitions. He provides introductions to private capital sources, including family offices, and advises clients on valuation, risk management, and transaction structuring issues. His expert litigation work has included shareholder disputes, business valuation, derivatives and hedging, and damages assessments.

    Tom studied military and diplomatic history at Yale, where he was a varsity football letterman. Following graduation, he went to work on Wall Street with Brown Brothers Harriman and Co. (“BBH”), the nation’s oldest private bank. He was a Federal funds and Eurodollar trader, and also worked in the bank’s international treasury department. During his time with BBH he was selected for training in the elite US Foreign Service, and was commissioned a Foreign Service Officer in November 1990. Volunteering for critical threat postings, he served tours of duty in Southeast Asia and in Russia. He was also a Staff Officer at headquarters in Washington DC, where he worked on energy security issues. Tom left the Foreign Service to pursue his MBA at Northwestern University, where he studied Analytical Finance and Accounting. Following business school, Tom moved to Houston and worked with three Fortune 100 energy companies: Enron International, Duke Energy, and Plains All American. At all three companies he worked on the M&A teams and in Corporate Treasury.

  • Dr. Jane Pouzou
    Quantitative Health Risk Analysis Consultant
    Epix Analytics

    Dr. Jane Pouzou is a quantitative health risk analysis consultant for EpiX Analytics, carrying out analytic projects in a variety of fields. She specializes in topics related to human health risks, such as chemical exposure and food safety, and in the use of probabilistic methods of risk quantification and decision analysis. Jane received her Ph.D. in Environmental and Occupational Health from the University of Washington and also holds a M.P.H. and B.S. in Biology from the University of Virginia.

  • Rishi Prabhakar
    Trainer and Consultant
    Palisade

    Rishi brings a broad range of experience and expertise to the Palisade team. He has worked in and consulted to the energy industry, telecommunications, scientific research, banking and finance with an emphasis on operational risk and Basel II. Rishi has expert skills in the areas of statistical analysis, simulation, time series forecasting, risk/capital modeling, extreme value theory, survey design and analysis. He holds a BSc Mathematics from the University of Technology, Sydney.

  • Tony Schurle
    Risk Management Professional
    Cameron, A Schlumberger Company

    Tony is an Oil & Gas Project Risk Management professional currently supporting complex offshore and onshore drilling equipment packages. Over his career he has worked within Quality Assurance, Supplier Quality, and as a Lean Six Sigma Black Belt. Tony has worked in the upstream market with Subsea Production and Drilling Systems and in the downstream market with Valve & Measurement Systems. Prior to joining Schlumberger, Tony was enlisted in the US Navy as a Nuclear Electricians Mate on Fast Attack Submarines. Tony has a BS in Industrial Engineering at University of Houston, a MS in Construction Management at University of Houston, and several professional certifications in Project Management at University of Texas.

  • JD Solomon
    Practice Area Leader and Senior Consultant
    Jacobs Engineering Group

    JD Solomon, PE, CRE, CMRP is a practice area leader and senior consultant with Jacobs focusing on risk, reliability, and strategic decision making. Some of his areas of practice include infrastructure health and prognostics, financial management, operations and maintenance (O&M) optimization, and master planning. JD’s book, Communicating Reliability, Risk, and Resiliency to Decision Makers, is a practitioner’s guide for bridging the gap between technical analysis and decision making. He is a Certified Reliability Engineer (CRE), Certified Maintenance and Reliability Professional (CMRP), is certified in Lean Management, and is a Six Sigma Black Belt. JD has a Professional Certificate in Strategic Decision and Risk Management from Stanford, an MBA from the University of South Carolina, and a BS Civil Engineering from NC State University.

  • Ronald J. Statt, MA
    Risk Advisor, Enterprise Risk Management
    Arizona Public Service Company

    Ron has been employed for more than 35 years at Arizona Public Service Company (APS), the largest public electric utility company in Arizona headquartered in Phoenix, AZ. He has worked in APS’s Load Forecasting Department as a senior forecast analyst for more than 10 years and is currently working in APS’s Enterprise Risk Management Department as a risk analytic advisor for more than 18 years. Prior to Ron’s employment at APS, he was employed at the US Bureau of the Census in the Statistical Methods Division as a mathematical statistician where he assisted in the sample design of the Current Population Survey which reports labor force statistics for the Bureau of Labor Statistics. Ron possesses a MA in Mathematics with specialization in statistics from Arizona State University.

    Being a risk analytic advisor for the total enterprise at APS, Ron has had the opportunity to apply many of the procedures within @RISK to a wide range of issues plagued with uncertainty. Ron has estimated annual corporate capital risk requirements, determined scheduling risks associated with major IS software installations, projected various fixed term bond rates to aid in corporate debt decisions, optimized portfolio balancing for the pension fund, and most recently, developed a neural network model to assign a credit rating to both private and public companies to assist Credit Risk determine initial collateral requirements.

  • Jeff Stokes
    Professor
    University of Nebraska-Lincoln

    Dr. Stokes holds the rank of Professor as well as the Hanson-Clegg-Allen Chair in Agricultural Banking and Finance at the University of Nebraska. He has also held academic appoints at the University of Northern Iowa (Finance), Penn State University, and the University of Tennessee. Over his career, Dr. Stokes has taught real estate finance, appraisal, and graduate-level quantitative methods. Dr. Stokes is also active in consulting. He is the CEO of PennAnalytics LLC and additionally conducts model development and validation exercises for Second Pillar Consulting. Dr. Stokes primary specialty is bank CECL and credit risk migration modeling, as well as, stress testing for banks.

  • Dr. William Strauss
    President
    FutureMetrics

    William Strauss is the President and founder of FutureMetrics. FutureMetrics is the leading consultancy in the wood pellet sector. Bill continues to be a thought leader in the sector and has published numerous papers on a variety of subjects relevant to the wood pellet sector. Bill has been named as one of the most influential leaders in the biomass sector in 2016 and again in 2017 by Argus Media, and is the 2012 recipient of the International Excellence in Bioenergy award. Bill has more than forty years of strategic and policy planning, project management, data analysis, operations, and modeling experience in the renewable energy sector including 10 years operating large waste-to-energy plants in the 1980s. He has an MBA (specializing in finance) and a PhD (economics and earth systems science).

  • Gary J. Summers, Ph.D.
    President
    Pipeline Physics LLC

    Gary Summers is president of Pipeline Physics LLC, a boutique research center that studies how uncertainty affects decisions and business processes. Dr. Summers consults as well, often for pharmaceutical companies, supporting and implementing decision analysis, modeling, simulation, and portfolio management. His designs for computer simulations received U.S. patents 6,236,955; 6,408,263 and 7,349,838. Dr. Summers earned an M.S. and Ph.D. in Management Science from Northwestern University, performed a post-doctoral fellowship at Oregon Graduate Institute (Oregon Health Science University) and was a visiting research professor at Portland State University.

  • Gustavo Vinueza
    Director of Custom Solutions
    Palisade

    Gustavo Vinueza has worked in the consulting, training, and custom development area of Palisade for nine years, and is currently responsible for scoping and producing customized software solutions for Fortune 500 companies around the world.

    During his tenure, Gustavo has leveraged his technical and financial background to understand the varied and unique needs of customers in many different industries to better formulate solutions tailored for each client. Having started by providing training classes and developing spreadsheet models for clients, Gustavo has since grown to lead a team of consultants and programmers whose mission is to create robust, bespoke software solutions based on Palisade’s @RISK and DecisionTools technologies. To date, the Custom Solutions team has helped Fortune 500 clients in manufacturing, engineering, defense, utilities, banking, energy, and many other sectors.

    Prior to Palisade, Gustavo was a technology project manager at CorpBanca Inversiones, and a technology infrastructure manager at the Principal Financial Group, both in Santiago, Chile. In addition, Gustavo has a range of experience in other technology and programming roles in the financial sector. Gustavo holds BS in Systems Engineering from the Universidad de Cuenca in Ecuador, an MBA from the Universidad Torcuato Di Tella in Buenos Aires, and a masters in finance from Universidad Adolfo Ibáñez in Santiago.

  • Erik Westwig
    Director of Software Development
    Palisade

    Erik Westwig has worked in software development at Palisade for nearly 25 years, and leads all the company’s core product software development efforts.

    Erik has long been a key architect behind Palisade’s flagship product @RISK, which performs Monte Carlo simulation and optimization in Microsoft Excel. Having written large portions of the @RISK code directly, Erik has also led development teams throughout the company’s history. In addition to @RISK, he has spearheaded the development of PrecisionTree, Palisade’s decision analysis add-in to Excel, as well as coordinated production of the company’s fully integrated DecisionTools Suite of analytical tools.

    Erik holds a BS and MS from the School of Applied and Engineering Physics at Cornell University. In 1998 he co-authored the textbook Mathematical Physics with Cornell University professor Bruce Kusse, published by John Wiley and Sons.

  • Yun Zhang, MMF
    Business Analyst
    Kodukula & Associates, Inc.

    Ms. Yun Zhang, MMF, is Business Analyst at Blue Cross and Blue Shield of Illinois interning as Research Analyst at Kodukula & Associates, Inc. She received her Master’s degree in Mathematical Finance from the Illinois Institute of Technology and Bachelor’s in Finance from University of Utah. Her focus areas include risk management, decision analysis, and Monte Carlo methods.

Register

2019 Risk Conference San Antonio
November 12–13, 2019

- Complimentary -

Registration is offered free to qualified risk professionals.

A tremendous value for an inclusive 2 full days.

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Event Venue

San Antonio Marriott Riverwalk

889 East Market Street
San Antonio, TX, 78205
Special rate for attendees!
$209/night, valid 11/12 & 11/13
Book here, or call (210) 224 - 4555 and mention the Palisade Risk Conference.
San Antonio Marriott Riverwalk