In This Issue
What’s New

» @RISK Helps Reduce Energy
   Costs for Water Company

» Palisade Conference 2009:
   Risk Analysis, Applications,
   and Training

» Energy Risk Forum &
   Academic Symposium

» Palisade Blog Headlines
» Upcoming Webcasts

Case Studies
» Predictive Analysis using
   The DecisionTools Suite

@RISK Modeling Tips
» Design of Experiments:
» Event and Operational Risks

@RISK Function
of the Month

» The Exponential Distribution

Palisade Analytics
in the Press

» Credit
» Sports
» Computer Manufacturing
» Marketing
» Retirement

» Palisade User Forums

In This Issue
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Palisade Energy Risk Analysis Forum
A one-day forum covering
risk and decision analysis
from all angles specific to the energy sector.
Houston 21 May 2009
» Register Now for the
   Energy Forum

Palisade Academic Symposium
A one-day event for professors, lecturers and post graduate students, presented
without charge .
Houston 22 May 2009
» Call for Papers

2009 Summer Risk Congress
The first in a series of one-day events for users to network, share ideas, and learn new techniques that can help them make better decisions now.
Munich 16 June 2009
» Register Now

Regional Seminars
» Africa
Johannesburg: 15-17 July 09

» Australia
Brisbane: 6-7 May 09
Sydney: 27-28 May 09
Sydney: 29 May 09
Perth: 17-18 June 09

» Brasil
São Paulo: 18-20 maio 09

» Europe
London: 28-30 April
London: 5 May

» Latin America
Medellín: 27-29 April 09
Cartagena:13-15 May 09
Lima, Peru: 25-27 May 09
Buenos Aires: 17-19 June 09
Quito: 24-26 June 09
México D.F.: 6-10 July 09
Santiago, Chile: 12-14 August
Guatemala: 26-28 August 09
Panamá: 21-23 September 09

» The Middle East
Abu Dhabi: 28-29 April 09

» North America
Chicago: 27-29 April 09
Calgary: 4-5 May 09
New York: 11-13 May 09
Houston: 20 May 09
Toronto: 10-11 June 09
Ithaca: 24-25 June 09
San Francisco:
   30 June - 2 July 09
Cincinnati: 14-15 July 09
Saskatoon: 4-6 August 09
Charlotte, NC: 12-13 August
Denver: 19-20 August 09
St. Paul, MN: 2-3 September
Seattle: 15-17 September 09
Las Vegas: 6-8 October 09
Chicago: 28-29 October 09
Dallas: 11-13 November 09
Boston: 18-19 November 09
Portland: 2-4 December 09
Atlanta: 15-16 December 09

Live Web Training
» Decision-Making and Quantitative Risk Analysis using @RISK

12-13 May, 11am-3pm ET
8-9 June, 11am-3pm ET
8-9 July, 9am-1pm ET
10-11 Aug, 11am-3pm ET
10-11 Sept, 11am-3pm ET
5-6 Oct, 11am-3pm ET
3-4 Nov, 9am-1pm ET
7-8 Dec, 1pm-5pm ET
19-20 May, 11am-3pm ET
15-16 June, 11am-3pm ET
20-21 July, 9am-1pm ET
17-18 Aug, 11am-3pm ET
21-22 Sept, 11am-3pm ET
12-13 Oct, 11am-3pm ET
9-10 Nov, 9am-1pm ET
14-15 Dec, 1pm-5pm ET

» Project Risk Assesment Using @RISK for Project
30-31 July, 11am-3pm ET

5-Part Web Training from our Asia-Pacific Office

» Part 1
Introduction to Simulation
and Modelling Uncertainty

12 May, 1-5pm AEDT
2 June, 1-5pm AEDT
23 June, 1-5pm AEDT

» Part 3
Selecting the Right Distribution

14 May, 1-5pm AEDT

» Part 4
Advanced Modelling Techniques

4 June, 1-5pm AEDT

» Part 5
Special @RISK Functions

25 June, 1-5pm AEDT

Trial Versions
Palisade software is available in fully functional 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» @RISK for Excel
@RISK» @RISK for Project
@RISK» @RISK for Six Sigma

Visual decision analysis
for spreadsheets

Sophisticated neural networks for spreadsheets

Advanced statistical analysis for spreadsheets

The Innovative Optimizer
for Windows

The DecisionTools Suite

@RISK Reduces Energy Costs for Water Company in Portugal - e-focus
    What's New
@RISK Helps Reduce Energy Costs
for Water Company

Águas do Douro e Paiva (AdDP), a Portuguese water utility company, used @RISK, Palisade’s Monte Carlo simulation tool, to determine the impact on energy costs of building a new power sub-station and the refurbishment of eight water pumping stations. The building of the new power sub-station is crucial in lowering AdDP’s governmental power tariffs and therefore helps reduce the company’s energy costs.

» Read the full case study
Read more about @RISK

Palisade Conference 2009:
Risk Analysis, Applications, and Training
New York, October 21-22
Palisade is pleased to announce its 2009 Conference on Risk Analysis, Applications, and Training, to be held at the Hyatt Regency Jersey City on October 21-22, 2009. Building on the success of last year’s record-breaking event, the conference will offer a wide range of software training, model building, and real-world case study sessions. The schedule will be posted soon, but you can register now.

» Register now at the early rate of $795 $595 and save $200
» See the schedule of events from 2008
» Read about the 2008 event
» Interested in presenting a case study? Contact us.

Palisade Energy Risk Forum Houston, May 21, 2009
Palisade Academic Symposium Houston, May 22, 2009
The Palisade Energy Risk Analysis Forum is a one-day event covering risk and decision analysis specific to the energy sector. Hands-on software training and case studies using @RISK and DecisionTools software are included. Learn new approaches to problems in oil and gas, utilities, and related fields.

The Palisade Academic Symposium is a one-day event for professors and grad students demonstrating how the DecisionTools Suite and @RISK can easily enable quantitative risk and decision analysis to be added into academic syllabi. In addition, delegates will see how these tools and techniques are being used in industry. There is no charge for this event.

» Learn more and register for the Palisade Energy Risk Forum
» Learn more and register for the Palisade Academic Symposium

Palisade Blog Headlines
Portfolio Optimization I:
An Introduction to Markowitz-related Approaches

Monday, April 20, 2009
When weighting assets in a portfolio, one may require the use of tools which readily allow many risk measures and heuristic methods to be easily implemented.
Palisade’s Evolver and RISKOptimizer belong to this set. However, there is a special class of optimization problem which is standard in financial theory. This problem consists of the determination of an optimal portfolio of a set of financial assets, where the expected return and volatility, and correlation between the assets’ returns, are known (or assumed).
» Read more

Brain on a Chip
Tuesday, April 14, 2009
On one side of campus, biologists are patiently explaining to the lay person why the AI version of a neural network can never approach the complexity and capacity of the biological model for that set of algorithms, and several buildings away computer scientists are optimistically predicting a "brain on a chip."
» Read more

Best Practices in Risk Modelling
Wednesday, April 1, 2009
The recent blog positing on best practices in Excel modelling could be thought of as providing a reasonable and robust set of principles for building static Excel models. When building simulation models for risk analysis in Excel (for instance, with @RISK), some other points are worthy of consideration.
» Read more

RSS Image Subscribe to the Palisade blogs.

Upcoming Webcasts
"Accelerating Product Design with Simulation and
Stochastic Optimization”

Presented by Andy Sleeper, President, Successful Statistics LLC
April 30, 2009, 12:00pm EST

The key to successful new product development is to anticipate and prevent problems before they happen. Design For Six Sigma (DFSS) is a system of risk-prevention tools used by world-class companies to launch new products of the highest quality, in the least time, and at the lowest cost. Simulation and optimization tools are among the most powerful DFSS tools, allowing engineers to prevent performance and capability problems before the first prototypes are built. What once required months or years to discover now takes only minutes to prevent.

» Register now (There is no charge for this webcast.)

"Executive Pay for Performance Using @RISK”
Presented by Marwaan Karame, IDG Capital Group
June 11, 2009, 12:00pm EST

Traditional executive incentive plans often encourage mediocrity and in many cases lead to the destruction of shareholder value. We don't have to look far to find evidence of a company with a long-term decline in stock price and increasing executive pay packages. In this live webcast, we will see why traditional compensation is a formula for mediocrity. We will also show how to create a pay for performance Compensation plan that will maximize long-term shareholder wealth by aligning management and shareholder interests. Lastly, we will demonstrate how to calibrate a pay for performance compensation plan using @RISK.

» Register now (There is no charge for this webcast.)

Case Study
Predictive Analysis using The DecisionTools Suite
In this archived webcast presented by Prakash Shrivastava, a Principal at Strategic Management International, we explore the capabilities of Palisade's DecisionTools Suite in predictive analysis. Using an example from the Business Financial Services /Collections Industry, we demonstrate:

  • StatTools to show patterns of customer profiles who default on payments
  • @RISK to show the impact on profits of companies due to reduced ability to collect in deteriorating economy
  • NeuralTools to show how companies can use customer profiles to develop a predictive model – whether or not a customer will pay
  • PrecisionTree to determine whether a company should invest in new technology for automating customer contacts
  • And other tools.

» View the webcast presented by Prakash Shrivastava,
   Principal at Strategic Management International

Product Spotlight
Design of Experiments: Welding
Suppose you are analyzing a metallic burst cup manufactured by welding a disk onto a ring. You need to make sure weld strength is within safety limits. The model relates the weld strength to process and design factors, models the variation for each factor, and forecasts the product performance in relation to the engineering specifications. @RISK is used to model the variation in each factor, and simulate different outcomes for weld strength. Output includes After Six Sigma statistics for Cpk-Upper, Cpk-Lower, Cpk, and PPM Defects (or DPM). Standard @RISK statistics functions (like RiskMean) are also used.

download the modelDownload the example: SixSigmaDOE.xls

Event and Operational Risks
In many circumstances one wishes to calculate the aggregate impact of many possible yes/no type events. For example, it is often important to answer questions such as "What is the loss amount that will not be exceeded in 95% of cases?" @RISK simulation can be used to answer such questions.

download the modelDownload the example: EventandOperationalRisks.xls

Function of the Month
The Exponential Distribution
RiskExpon(beta) specifies an exponential distribution with the entered beta value. The mean of the distribution equals beta.

This distribution is the continuous time equivalent to the Geometric distribution. It represents the waiting time for the first occurrence of a process which is continuous in time and of constant intensity. It could be used in similar applications to the Geometric distribution (e.g. queuing, maintenance and breakdown modelling), although suffers in some practical applications from the assumption of constant intensity.


RiskExpon(5) specifies an exponential distribution with a beta value of 5.

RiskExpon(A1) specifies an exponential distribution with a beta value taken from cell A1.

Palisade Software Techniques in the News
Infocredit Group Launches Global Network In Credit Information
Technique: Decision analysis   » see DecisionTools Suite 5.0
Source: Creditman, April 7, 2009

A new global network to provide credit information will offer customer companies an important new decision-support tool.

Answering Baseball's What-Ifs
Technique: Monte Carlo simulation   » see @RISK 5.0
Source: New York Times, April 6, 2009

Managers of major league baseball teams are taking up Monte Carlo simulation to anticipate everything from the effects of wind to the effects of potential player trades.

Computer Manufacturing
CMOS statistical variability: The skeleton in the closet
Technique: Monte Carlo simulation   » see @RISK 5.0
Source: EE Times, April 14, 2009

Chip manufacturers are using Monte Carlo simulation to combat a new processing bugaboo, statistical variability.

Social Influence and Car Buying
Technique: Decision trees   » see PrecisionTree 5.0
Source: Headlight, April 6, 2009

This marketer’s blog for the auto industry details the use of social networking sites to anticipate the effect social influence will have on the decision trees customers use to make purchasing decisions.

Back to the Rock Pile
Technique: Monte Carlo simulation   » see @RISK 5.0
Source:, April 1, 2009

In this editor’s opinion, the current low values of stocks are cause for financial planners to rely more than ever on Monte Carlo simulation to advise their clients.


Palisade User Forums

The Palisade User Forums are online discussion boards where users are invited
to post questions and share ideas on their use of @RISK and other Palisade
software. It's also a great place to check for announcements regarding updates
of Palisade software. Forums are organized by products.

» Join or view the Palisade Forums

Recent topics include:

» Multiple Level Correlations


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