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In This Issue
What’s New
» Announcing StatTools and NeuralTools for Excel 2007
» NeuralTools Used to Speed Prediction Time for Cardiovascular Risk Assessment
» Free Live Webcast: How to Measure Anything: Finding the Value of Intangibles in Business

Case Study
» @RISK Combats Avian Flu

Product Spotlight
» @RISK Stress Analysis

Palisade Analytics
in the Press

» Atomic Movement of Solids
» Biological Research
» Cancer Treatment
» Credit Analysis
» Credit Card Fraud
» Currency Forecasting
» Diabetes Treatment
» Disease Diagnosis
» Financial Planning
» Food Regulation
» Recruiting
» Robotics
» Securities Valuation
» Supply Chain Optimization

» Scientific Papers

Ask Amy Tech Tips
» Can I use Evolver and @RISK to determine the optimal allocations in a portfolio of funds with random growth?

2007 Palisade User Conferences
» Asia-Pacific
13-14 September
Sydney, AU
» North America
25-26 October
Miami Beach, USA
» Latinoamérica
el 26 y el 27 de noviembre
San José, Costa Rica
» Europe
22-23 April 2008
London, UK

to chat live
with a sales

Free Webcasts
Case Study
» How to Measure Anything: Finding the Value of Intangibles in Business
23 August
11am-12pm ET / 4-5pm GMT

Case Study
» Nonlinear Feedback Loops using @RISK: Adding Uncertainty to a Dynamic Model of Oil Prices
13 September
11am-12pm ET / 4-5pm GMT

Regional Seminars
» North America
Calgary, AB: 14-15 Aug
Philadelphia: 28-29 Aug
Ithaca, NY: 6-7 Sept
St. Louis: 11-12 Sept
Chicago: 18-19 Sept
Toronto, ON: 27-28 Sept
Las Vegas: 4-5 Oct
Detroit: 9-10 Oct
San Antonio: 12-13 Nov
New York: 29-30 Nov
Portland: 3-4 Dec
Baltimore: 10-11 Dec

» Brazil
São Paulo, Brasil
  (no português):
  3-5 Setembro

» Europe
Frankfurt (auf Deutsch):
  13 Sept
Paris (en Français): 25 Sept
London: 27-28 Sept
London: 9 Oct
London: 25-26 Oct

» Latinoamérica
La Ciudad de Panamá,
  Panamá (en español):
  del 20 al 22 de agosto
Villahermosa, México
  (en español):
  del 29 al 31 de agosto
Guayaquil, Ecuador
  (en español):
  del 16 al 18 de octubre

» Asia-Pacific
Perth: 1-2 Nov
Sydney: 15-16 Nov
Melbourne: 22-23 Nov
Sydney: 13-14 Dec

Live Web Training
» Risk and Decision Assessment Training using @RISK, Part I
6-7 August, 1-5pm ET
10-11 September, 1-5pm ET
1-2 October, 1-5pm ET
5-6 November, 1-5pm ET
10-11 December, 1-5pm ET

» Risk and Decision Assessment Training using @RISK, Part II
9-10 August, 1-5pm ET
20-21 September, 1-5pm ET
4-5 October, 1-5pm ET
8-9 November, 1-5pm ET
13-14 December, 1-5pm ET

» Project Risk Assessment using @RISK for Project
1-2 November, 1-5pm ET

Trade Shows
» North America
PMI Global Congress 2007 – North America
6-9 October 2007
Atlanta, GA
Booth #711

Society of Actuaries Annual Meeting and Exhibit
14-17 October 2007
Washington, D.C.
Booth #506

INFORMS Annual Meeting 2007
4-7 November 2007
Seattle, WA

SPE Annual Technical Conference and Exhibition - 2007
11-14 November 2007
Anaheim, CA

38th Annual Meeting of the Decision Sciences Institute - DSI 2007
17-20 November 2007
Phoenix, AZ

» Europe
IRM Risk Forum
11-13 September 2007
Conference Hertfordshire, Hatfield, UK

30 Sept - 3 Oct 2007

17-18 October 2007

» Asia-Pacific
DSTO Defence
8-9 August 2007

Australian Risk Management Summit 2007
13-14 August 2007

Risk Australia
25-26 September 2007

ISEC Conference
26-28 September 2007

7-10 October 2007
Hobart, Tasmania

PMI New Zealand
17-19 October 2007
Wellington, NZ

International Conference on Operations and Quantitative Management
17-20 October 2007
Bangkok, Thailand

AusBiotech 2007
21-24 October 2007

SPE Asia Pacific Oil and Gas Conference
30 Oct - 1 Nov 2007
Jakarta, Indonesia

25-27 November 2007
Gold Coast

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

The DecisionTools Suite
The complete risk and decision analysis toolkit

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

Visual decision analysis for spreadsheets

Sophisticated neural networks for spreadsheets

Advanced statistical analysis for spreadsheets

Optimization with simulation for spreadsheets

The DecisionTools Suite

Announcing StatTools and
NeuralTools for Excel 2007
StatTools and NeuralTools are now fully compatible with Excel 2007. Existing users with current maintenance plans can get a FREE update for their software.

Take advantage of the new features in Excel 2007, including:

Expanded Worksheet – Excel 2007 offers 1 million rows and 16,000 columns in a single worksheet, allowing for vastly larger model sizes and data.

Improved Ribbon interface – StatTools and NeuralTools commands and features are now easier to find on the Excel Ribbon, which visually brings together the essentials.

Improved Charting - Graphs created by StatTools are fully customizable using all of Excel 2007's new graphing features. In addition, Excel 2007 charts are more easily shared with other Office applications such as Word and PowerPoint.

Get your StatTools update
» Get your NeuralTools update

NeuralTools Used to Speed
Prediction Time for Cardiovascular
Risk Assessment
Source: Scientific Computing, July 2007
The selection and dosing of drugs is an important component of many care plans designed by clinicians in a wide variety of healthcare settings. Researchers used Palisade’s NeuralTools to evaluate factors that influence both selection and dosing of drugs based upon pathophysiological and pharmacological principles.

Read the full story
» Learn more about NeuralTools

Free Live Webcast:
How to Measure Anything: Finding
the Value of Intangibles in Business
Learn how to make intangibles measurable thus improving your models in this FREE live webcast on Presented by Douglas W. Hubbard, President, Hubbard Decision Research

Doug Hubbard will talk about the approach described in his book, How to Measure Anything: Finding the Value of Intangibles. This is based on Hubbard’s method Applied Information Economics (AIE) and includes how to formulate intangibles as measurable and techniques for improving Monte Carlo models including:

  1. How “calibration training” improves on the subjective estimates from subject matter experts.
  2. How to compute the value of additional information and how this radically changes empirical measurement methods.
  3. How to use the output of a Monte Carlo simulation as input to portfolio optimization methods.

Register now for FREE Live Webcast:
"How to Measure Anything:
Finding the Value of Intangibles in Business"
23 August 2007, 11:00am - 12:00pm ET / 4:00 - 5:00 pm GMT

Case Study

@RISK Combats Avian Flu
The Royal Veterinary College (RVC), the UK’s largest vet school and one of the most highly regarded veterinary research centers in Europe, uses @RISK to augment its epidemiology skills when understanding the risks associated with specific diseases. In the case of avian flu the RVC is able to assist in containing something that is widely perceived as highly threatening.

» Read the full case study
» Learn more about @RISK

Product Spotlight

@RISK Stress Analysis
@RISK Stress Analysis lets you control the range that is sampled from a distribution function, enabling you to see how different scenarios affect your bottom line without changing your model. By controlling the values sampled from a distribution, you stress the distribution. Simply specify the percentile values between which samples are drawn during simulation. Stress Analysis also allows you to stress your model by substituting an entirely new distribution for an existing distribution in your model. Instantly test various scenarios without changing your model! Stress Analysis is included with the Professional and Industrial editions of @RISK 4.5.

As an example, an insurance company might want to analyze its loss reserves. It would like to see what the effect would be on claims payout if it took out a reinsurance policy to cover an extraordinary number of claims. By stressing the distribution representing the number of claims to represent just the 90th percentile and below, you could see if the reserves on hand are enough to cover 90% of possible claims filed, while covering the highest 10% with an outside policy.

After completing a simulation, Stress Analysis provides you with a collection of reports and graphs you can use to analyze the effects. These include:

  • Summary reports
  • Box-Whisker plots
  • Comparison graphs
  • Histograms
  • And more

Trade Shows» More about @RISK

100% Excel
@RISK simulations are calculated 100% within Excel, supported by Palisade sampling and statistics proven in over twenty years of use.
Palisade does not attempt to rewrite Excel in an external recalculator to gain speed.
A single recalculation from an unsupported or poorly reproduced macro or function can dramatically change your results. Where will it occur, and when? Palisade harnesses the power of multiple CPUs and multi-core processors to give you the fastest calculations. Correct results—and fast—using @RISK!

Palisade Software Techniques in the News

Atomic Movement of Solids

» DC.Ars: Team Heavy Metal Lasagna
and the eOn Project

Technique: Monte Carlo simulation  » see @RISK
Source: Ars Technica, 20 July 2007

The goal of the EON project is to calculate the growth/movement of solids at the atomic scale via Monte Carlo simulations. This simulation method has been employed to study island formation and growth, and the EON project is devoted to the growth of ice.

Biological Research

» Learning to evolve: With a little help
from my ancestors

Technique: Neural networks / Genetic algorithms   » see NeuralTools
Source:, 30 July 2007

According to a new theory, the innate ability of today's birds to fly depends indirectly on the learning that their ancestors did, which leaves a genetically specified latent memory for flying. The theory has been tested on simple models of brains called artificial neural networks, which can be made to evolve using genetic algorithms.

Cancer Treatment

» Monte Carlo Dose Calculation Extends CyberKnife(R) System's Capabilities in Precision Radiation Delivery
Technique: Monte Carlo simulation  » see @RISK
Source:, 23 July 2007

Accuray Incorporated, a global leader in the field of radiosurgery, announced an extension of the CyberKnife System's suite of products targeted toward the noninvasive treatment of lung tumors with Accuray's Monte Carlo dose calculation algorithm, which is pending FDA 510(k) clearance.

Credit Analysis

» Fitch Expects to Rate Metrofinanciera Trust #650 - Construction Bridge Loan Securitization
Technique: Monte Carlo simulation  » see @RISK
Source: Business Wire, 18 July 2007

Fitch focuses credit analysis on several key quantitative and qualitative variables that could affect the performance of the underlying assets. Fitch estimates default risk on the portfolio using a a multi-period Monte Carlo simulation model, which simulates the default behavior of an individual asset for each year of the transaction's life. The Monte Carlo simulation allows for the modeling of the distribution of portfolio defaults and losses, taking into account the correlation between assets in a portfolio.

Credit Card Fraud

» The new fraud squad
Technique: Neural networks   » see NeuralTools
Source:, 26 July 2007

Costing £212.6m each year in the UK and growing at an annual rate of 16 per cent, cardholder-not-present (CNP) fraud is now the biggest category of plastic card deception. The internet retail industry in the UK is growing at an exceptional rate and credit card fraudsters are attacking the softer targets of the online sector. One category of fraud prevention systems is neural networks that can be built into payment processing systems in order to identify potentially deceitful transactions.

Currency Forecasting

» Offers Forecasts
Utilizing Neural Networks

Technique: Neural networks   » see NeuralTools
Source:, 13 July 2007

As part of the services, Pro Pipper will offer The New Wave Forex Market Watch service, including Inter-market Analysis utilizing neural networks to analyze correlation patterns between the target currency and its related commodity, bond and stock index markets.

Diabetes Treatment

» Top US, EU diabetes groups offer guidelines for Asians
Technique: Decision trees  » see DecisionTools Suite
Source:, 28 July 2007

The rapidly rising prevalence of diabetes among Asian nations has led experts from the American Diabetes Association to be alarmed and visit the Asia-Pacific region, for the first time, to offer their recommendations -- a treatment algorithm -- for the management of type 2 diabetes. A treatment algorithm usually refers to decision tree approaches to healthcare treatment (i.e., if symptoms A, B and C are evident, then use treatment X).

Disease Diagnosis

» Symptom Checker
Technique: Decision trees  » see DecisionTools Suite
Source: Business Wire, 31 July 2007 has launched a new symptom checker, an interactive tool developed in conjunction with Harvard Medical School. The tool covers 100+ common symptoms and guides users through a decision tree to determine possible conditions and appropriate actions. On average, 34 million monthly visitors use to help guide their decisions about Health, Finance and many other topics.

Financial Planning

» Rating the Online Retirement Planners
Technique: Monte Carlo simulation  » see @RISK
Source: Kiplinger’s Personal Finance, August 2007

Kiplinger’s rates the top online retirement planning services, finding the more advanced tools incorporate Monte Carlo simulation into their investment calculations.

» John Hancock Funds Adds New Retirement
Portfolio Calculator using Monte Carlo simulation

Technique: Monte Carlo simulation  » see @RISK
Source: PR Newswire, 1 August 2007

John Hancock Funds recently launched a new retirement portfolio calculator on its award-winning web site. The calculator represents the probability that such a portfolio would last throughout retirement, given different retirement lengths and annual withdrawal rates. The chance of portfolio survival was projected using Monte Carlo simulation, which is useful for modeling outcomes with significant uncertainty and variety of inputs.

Food Regulation

» Government Chemist designs system to
classify dietary food and health supplements
for applicable legislation

Technique: Decision trees  » see DecisionTools Suite
Source: Oxfordshire Bioscience Network, 11 July 2007

The creation of a simple system to assign the appropriate legislation for a range of dietary supplements is one of the key achievements described in the Government Chemist Review 2006, the latest account of analytical, advisory and strategic work for the UK Department for Innovation, Universities and Skills (DIUS). A decision tree was created to address the key factors in deciding whether a product falls under the provisions of the Food Safety Act 1990 or the Medicines Act 1968.

» New rules give food vendors leeway;
Health ministry regulations allow for choices

Technique: Decision trees  » see DecisionTools Suite
Source: Kingston Whig-Standard, 11 July 2007

New Ontario provincial regulations allow the local medical officer of health to approve new foods for vendors to sell if they meet safety regulations. For that, the government officials have developed a decision tree, rather than a whole list, to help make good decisions about whether a food could be allowed or not.


» CV Parsing – what is it and why do you need it?
Technique: Neural networks   » see NeuralTools
Source:, 24 July 2007

CV parsing involves the deployment of neural network technology to identify candidate data directly from the resume with a high degree of precision. The artificial intelligence engine is able to read and understand resumes by making probabilistic determinations based on linguistic context and inference.


» A Baby Step for Computer Language Acquisition
Technique: Neural networks   » see NeuralTools
Source: ScienceNOW, 23 July 2007

Neuroscientists studying language and cognition at Stanford University are using neural networks to teacher their computers to recognize and distinguish between vowel sounds, just the way an infant learns to recognize these sounds.

» Dynamic Machine Goes Mountaineering
Technique: Neural networks   » see NeuralTools
Source: Science Daily, 13 July 2007

A team of EU-funded researchers has built a robot that can walk uphill and adjust its gait to traverse ice--or sand. Human changes of gait are triggered by the brain, while the robot’s high level of joint and torso coordination has been achieved by linking an infrared “eye” to a simple neural network.

Securities Valuation

» Qiao Xing Universal Telephone, Inc.
Releases 2006 Annual Report

Technique: Monte Carlo simulation  » see @RISK
Source: PRNewswire, 17 July 2007

Two convertible notes issued in 2006 are hybrid instruments that come with embedded derivatives, including the right to convert the notes by the note holders, a premium put, a put option conditional upon certain events of default and a put option conditional upon a change of control. The valuation of the embedded derivatives was derived by using various valuation methods, which included Monte Carlo Simulation

Supply Chain Optimization

» Genetic Evolution as a Foundation for
Supply Chain Optimization

Technique: Genetic algorithm optimization  » see RISKOptimizer
Source: World Trade Magazine, 30 July 2007

Evolution and other features of the natural world are being used more and more to solve supply chain problems that we haven’t been able to tackle before. In North America, genetic algorithms have been used by many companies since the 1990s to find better solutions to supply chain problems.

New Scientific Papers Using Monte Carlo

» Active vibration control (AVC) of a satellite
boom structure using optimally positioned stacked piezoelectric actuators

Technique: Genetic algorithm optimization
Vibration control of a satellite boom
Source: University of Southampton, 29 July 2007

In this paper, results for active vibration control predicted from experimental measurements on a lightweight structure are compared with purely computational predictions. The structure studied is a 4.5m long satellite boom consisting of 10 identical bays with equilateral triangular cross sections. The study involves a genetic algorithm to find high-quality positions for three actuators on the structure that will achieve the greatest reductions in vibration transmission.

» Estimating Risk of Cancer Associated
With Radiation Exposure From 64-Slice
Computed Tomography Coronary Angiography

Technique: Monte Carlo simulation
Cancer risk analysis
Source: Journal of the American Medical Association, 18 July 2007

Computed tomography coronary angiography (CTCA) has become a common diagnostic test, yet there are few data on its associated cancer risk. A recent report provides a framework based on Monte Carlo simulation for estimating these risks over a lifetime.

» Predicting How Proteins Fold
Technique: Monte Carlo simulation
Drug development
Source: Chemistry World, 6 July 2007

Membrane proteins are important targets for drug development, yet notoriously difficult to study by both experimental and theoretical methods. Researchers in Italy and the UK have now developed a computational approach that can simulate the folding of membrane proteins in atomic detail. The study uses Monte Carlo simulations, which apply millions of random steps to optimize structures for any given environment.


Ask Amy Tech Support

Expert Answers to Technical Questions

Dear Amy,

Can I use Evolver and @RISK to determine the optimal allocations in a portfolio of funds with random growth?


Dear M.V.,

Solving problems of this nature involve two modeling stages. The first stage uses @RISK to simulate the risk in each fund's growth. The second stage uses Evolver to determine the optimal portfolio allocations based on the simulation data generated by @RISK. Typically, the goal of the Evolver optimization would be to maximize the Average Total Return or a specific percentile of the Total Return that represents its VAR (Value at Risk). Additional constraints can be placed on the Total Return statistics like its standard deviation and percentiles.

Example: For demonstration purposes, the underlying @RISK model for generating the individual fund growth data has been simplified in this example. Typically, models that value fund growth subject to risk can be quite complex-often using autoregressive or other ad hoc time-series modeling techniques. These topics are beyond the scope of this article.

» Download this example


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