How to win the World Cup office pool: Use DecisionTools Suite to choose the champions

In This Issue
What’s New
» How to win the World Cup
   Office Pool

» Palisade Regional Risk

» Palisade featured in Risk
   Management Monitor

Case Study
» Public Service Company uses
   @RISK, Evolver to Manage
   Risks of High Stakes Contracts

@RISK Modeling Tips
» Siting an Ambulance Station

Upcoming Webcasts

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The DecisionTools Suite

How to win the World Cup Office Pool:
Use @RISK and PrecisionTree to
Choose the Champions

As the World Cup in Brazil approaches this summer, worldwide anticipation has reached a fever pitch. In South America, and Brazil in particular, office pools and group bets are popping up, with soccer fans hoping to pick the winning team. At Palisade, we don’t believe in taking wild guesses—which is why Fernando Hernández, consultant and trainer for Palisade, developed a model using DecisionTools Suite software to forecast the probabilities of each one of the 32 national soccer teams winning this ultimate championship.

Taking data from the rankings of over 200 national teams from FIFA spanning the past four years (2011-2014), Hernández created a model that uses @RISK to determine the probabilities of different teams winning at different stages, and PrecisionTree for mapping this information into a tree, or bracket, format. @RISK uses Monte Carlo simulation to compute thousands of different possible outcomes for the tournament automatically. The historic strengths and weaknesses of each team are accounted for in the statistical models used to represent each matchup.

After running 50,000 iterations, the model probabilistically channels each team into an eventual tournament win, and calculates its odds. Depending on certain ranking assumptions, the odds calculations may vary significantly. However, a robust approach that considers both historic and current rankings yielded the following results:

With a home advantage incorporated, Brazil has the largest probability of becoming champions with a 17% chance, with Spain coming as a runner up with 12% probability. The next six teams that comprise the top eight posts of becoming World Champions are: Switzerland (8%), Greece (8%), Germany (7%), Colombia (7%), Argentina (6%) and Uruguay (5%).

Without considering home advantage, Germany would be the most likely winner, with a 19.9% chance.

Hailing from Costa Rica, Hernández concedes that his trust in risk modeling may override national pride when it comes to placing bets on the World Cup. “I am still not sure whether I would bet on my country, Costa Rica, in the office pool. In a group with three former World Champions–Uruguay, Italy and England–it only stands a 23% chance of classifying for second round, and only one chance in 440 of becoming World Champions.”

  » More on "How to Win the World Cup Office Pool"
  » Join us for a live webcast to learn how to use the model
     (offered in English, Spanish, and Portuguese)

xls Download the DecisionTools Suite 2014 World Cup model
LinkedInDiscuss the model in Palisade's LinkedIn groups
RISKLogo Download a free trial version of the DecisionTools Suite

2014 Palisade Regional Risk Conferences
For nearly a decade, the Palisade Risk Conferences have been bringing together risk and decision analysis professionals from Fortune Global 500 corporations to small consulting practices, and across every industry. This year we have added more cities to our Regional Risk Conference schedule including three in the United States and two in Asia-Pacific.

Seattle: 24 June Register Now
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Save the date for Palisade's premiere 2-day Risk Conference to be held in New Orleans at the Hilton New Orleans Riverside Hotel. This is a must-attend event, with four tracks of informative sessions that will give attendees opportunities to learn, network, and explore the broad range of applications our software provides.

New Orleans: 19-20 November Register Now


Palisade featured in Risk Management Monitor in "Ensuring Food Safety with Monte
Carlo Simulation"

"Ensuring Food Safety with Monte Carlo Simulation" shines light on how the Shanghai Food and Drug Administration relied on Monte Carlo simulation to assess food safety, when Shanghai hosted the 41st World Expo in May 2010. Organizers wanted to be certain that food distributed to foreign visitors was safe, so it initiated a quantitative analysis of nitrite contamination in cooked meat. The Shanghai FDA conducted 370 random checks of meat products in the city and found four percent of samples exceeded nitrite standards.

The findings indicated that the possibility of passing the threshold for acute nitrite poisoning indeed existed, as well as the possibility for exceeding the allowable daily intake of nitrite. Based on the results, the Shanghai FDA proposed that businesses in the food service industry be forbidden from using nitrite, which eliminated the possibility of nitrite poisoning at its root.

Palisade's vice president, Randy Heffernan, sums up the situation in the article, "It is interesting - if not a little disconcerting - to consider the guesswork previously employed in food safety prior to technological advances such as Monte Carlo simulation. While risk can never be completely eliminated, we can at least dine with less concern when analysts are armed with solutions that dramatically lower risk."

 » Read "Ensuring Food Safety with Monte Carlo Simulation"
    in Risk Management Monitor


Case Study
Public Service Company uses @RISK, Evolver to Manage Risks of High Stakes Contracts
Many corporations contract directly with utilities for the electricity they use. At NIPSCO (Northern Indiana Public Service Company, a subsidiary of NiSource, a FORTUNE 500 company), a diversified utility in northern Indiana, it is not unusual for millions of dollars to be hanging on a single contract. The goal is to arrive at rates that are acceptable to both NIPSCO and the corporate customer. To be successful, they must accurately predict the customer's needs for power and the timing of this demand. In addition, NIPSCO must optimize its use of generating assets in order to meet increasingly stricter clean air standards. @RISK, Evolver and RISKOptimizer have proven to be the perfect tools for managing these uncertainties.

 » Read the full case study

Product Spotlight
Siting an Ambulance Station
From Chapter 11 of RISKOptimizer for Business Applications
by Roy Nersesian, published by Palisade

The advantage of RISKOptimizer is in being able to handle stochastic demand. This perfectly fits the siting of ambulance, police, and fire stations where demand is uncertain to say the least. The first example in this lesson evaluates where a station should be located to minimize the distance an ambulance would have to travel. The next logical question to ask after determining the best site for an ambulance station is the number of ambulances to be assigned at the site. The final decision on the optimal number of ambulances depends on the trade-off between the cost of an extra ambulance and driver and the incremental benefit in improving the level of service.

 » Download the example model and step-by-step instructions

A model for calculating the chances of winning
the 2014 World Cup, using @RISK

Presented by :Fernando J. Hernández, Palisade
   06 June - 8am EDT (2pm CEST)   » Register Now

Um Modelo de Previsão das chances de ganhar a Copa do
Mundo de 2014 no Brasil, usando o @RISK - em Português

Apresentado por: Fernando J. Hernández, Palisade
   06 June - 10am EDT (11am BRT, 4pm CEST)   » Inscreva-se agora

Insurance and Reinsurance Applications of @RISK:
Examples from Agroasamex and the World Bank

Presented by: Luisarturo Castellanos, CatRiskMexico/Palisade Corp.
   06 June - 11am EDT (5pm CEST)   » Register Now

Un modelo para pronosticar las probabilidades de ganar La Copa Mundial 2014, usando @RISK - en español
Presentado por: Fernando J. Hernández, Palisade
   06 June - 12:00 Noon EDT (11am CDT, 6pm CEST)   » Registrarse Ahora

Business Forecasting and Simulation using
@RISK an the DecisionTools Suite

Presented by: Glen Justis, Experience on Demand
   Part 1 of 3: 10 July - 11am EDT (5pm CEST)   » Register Now
   Part 2 of 3: 14 August - 11am EDT (5pm CEST)   » Register Now
   Part 3 of 3: 18 September - 11am EDT (5pm CEST)   » Register Now

» See complete Webcast schedule


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Palisade is the world’s leading provider of risk and decision analysis software and solutions. Founded in 1984, its products @RISK and the DecisionTools Suite are used by over 95% of the Fortune 100, in nearly every industry around the world. Palisade is headquartered in New York State, and has offices in London, Sydney, Rio de Janeiro, and Tokyo.


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