High-Risk R&D Project Valuation at Novelis, with the DecisionTools Suite

In This Issue
What’s New
» High-Risk R&D Project
   Valuation at Novelis, with
   the DecisionTools Suite

» Palisade's 2015 Regional
   Risk Conferences

Case Study
» Making Medicine Count:
   The DecisionTools Suite
   Bolsters Efficacy Of
   Humanitarian Programs

@RISK Modeling Tips
» Modeling Daily
   Electricity Demands

Upcoming Webcasts

In This Issue

2014 Palisade Risk Conferences
An intensive day of networking, software training presented by Palisade trainers and consultants, and real-world case studies presented by industry experts. Join us at an event near you. More dates to come for 2015.

» Mumbai 13 January
» Rio de Janeiro 5 May
» São Paulo 7 May
» Johannesburg 12 May
» Madrid 19 May
» Melbourne 21 May
» Munich 18 June
» Oslo 29 September
» Moscow 1 October
» Zurich 6 October
» London 22 October
» Dubai 2 November
» New Orleans
   11-12 November

Regional Seminars
Melbourne: 17-18 March
Perth: 21-22 April
Brisbane: 12-13 May
Sydney: 16-17 June
Adelaide: 29-30 June

Belo Horizonte:
  9 - 11 de março
São Paulo: 23 - 27 de março

London: 17-19 March
London: 22-24 April
Johannesburg: 13-15 May
Madrid: 20-21 May
London: 2-4 Jun

Latin America
Santiago, Chile:
  24 al 26 de marzo
Ciudad de Panamá, Panamá:
  21 al 23 de abril
Lima, Peru:
  19 al 21 de mayo

North America
Washington DC: 3-5 March
Los Angeles: 10-12 March
Chicago: 14-16 April
Houston: 14-16 April
Calgary: 27-29 April
Toronto: 9-11 June


Live Web Training Using Decision Trees with
PrecisionTree to Add Insight
to Decisions

18 March, 11am-3pm EDT

Decision-Making and
Quantitative Risk Analysis
using the DecisionTools Suite

30-31 March, 11am-3pm EDT
9-10 April, 9am-1pm EDT
10-11 June, 8am-12pm EDT

23-24 April, 9am-1pm EDT
17-18 June, 8am-12pm EDT


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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

» English
» Español
» Português
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» 日本語版
» 中文版

Risk analysis software using Monte Carlo simulation for Excel and Project

Visual decision analysis
for spreadsheets

Sophisticated neural networks for spreadsheets

Advanced statistical analysis for spreadsheets

The Innovative Optimizer
for Windows

Mind Mapping and Data Exploration for Excel

The DecisionTools Suite

High-Risk R&D Project Valuation at Novelis, with the DecisionTools Suite
A company can be a world leader in their field, and still have room for improved processes and even better results. Novelis is the world's largest aluminum rolling and recycling company and a global leader in rolled aluminum production, beverage can recycling, and automotive sheet production. And now Novelis is improving the evaluation of new R&D projects by incorporating a quantitative system for risk assessment.

NovelisDave MacAdam, Senior Manager of Innovation Strategy at Novelis, relies on the DecisionTools Suite. "Within our research and technology department, there was previously little to no structure put around the risk evaluation of projects," says MacAdam. "The process was perfunctory and overly reliant on input from the commercial side. While commercial input is necessary, we found more information from the scientific side of the company was needed to accurately assess risk and more integration was needed between those two schools of thought."

Using @RISK and the DecisionTools Suite, MacAdam introduced a method in which models could be built that incorporated all assumptions from the different Novelis teams. "By going through this process, I was able to refine the assessment of the risk of each project from the project leads themselves," says MacAdam. "This becomes an integral part of our risk assessment process and portfolio optimization." (Read more detail about MacAdam's models in the complete case study.)

"[@RISK's] graphs make explaining the risk of a project easier," MacAdam says. "In particular, @RISK's tornado graph feature allows us to take the inputs from all the different participants on a project —from R&D, operations, marketing, etc.— and articulate what the biggest risks are in a hierarchical way. It's an opportunity to challenge people's assumptions and get at the heart of the real risks in a project."


MacAdam uses PrecisionTree to show project leads how each stage of a project influences the next.


MacAdam has been able to demonstrate to key decision makers which areas contribute most to a project's overall risk, often revealing areas underestimated in their significance. "We're all making sausage, and no one wants to see how it gets made," he says. "The more succinct and clear you make those graphs, the more effective the decision-making process can be."

  » Novelis case study

Palisade's 2015 Regional Risk Conferences
The Palisade Regional Risk Conference Series is embarking on its 2015 global tour. These regional conferences have brought together risk and decision analysis professionals from Fortune Global 500 corporations to small consulting practices, and across every industry. Our 2015 circuit is planning on making stops in the following cities with more to be added:

Rio de Janeiro: 5 May Register Now
São Paulo: 7 May Register Now
Johannesburg: 12 May Register Now
Madrid: 19 May Register Now
Melbourne: 21 May Register Now

  » See the global list of conferences for 2015 for an event near you -
     dates still to be added.

Save the date for Palisade Risk Conference - New Orleans
Be sure to save the date for our Palisade Risk Conference in New Orleans! Dave MacAdams of Novelis (story above) delivered a very popular and well-received keynote at last year's two-day risk conference event. We are putting together the schedule for this November, and are looking forward to another exciting conference at the Hilton New Orleans Riverside Hotel.

New Orleans: 11-12 November

  » View last year's New Orleans itinerary

Case Study
Making Medicine Count: The DecisionTools Suite Bolsters Efficacy of Humanitarian Programs
Getting life-saving drugs to under-served people in developing countries is a driving goal for many non-profit organizations. However, well-intentioned efforts like these can fall short of their desired impact due to poor understanding of market uncertainty and risks associated with pharmaceutical manufacturing

Linskbridge, SPC, a consulting firm that advises international development organizations in determining what efforts have the highest impact along with the best value for money spent, recently used @RISK, RISKOptimizer, and PrecisionTree to help determine the best method of introducing a life-saving medicine in developing countries. The process requires analytical forecasting of both demand and supply of the drug, as well as a detailed market analysis. With the aid of Palisade's DecisionTools Suite software, the consultancy has been able to offer clients sound advice on which ventures have both humanitarian impact and fiscal soundness.

"Palisade's DecisionTools Suite is a very important component to our work," says Khatuna Giorgadze, an associate with Linksbridge. "Since 2011, it has enabled us to do the required market and investment analysis and make decisions. It's easy to use, and its compatibility with Excel makes it all the more appealing. We're very happy with how this software has enhanced our work."

 » Read the full case study

Product Spotlight
Forecasting Structural Costs
From Chapter 25 of Financial Models Using Simulation and Optimization II by Wayne Winston, published by Palisade

@RISK is well suited to forecast the timing of major structural costs. The primary sources of uncertainty are the time to complete a project, the time after the project when the cost is incurred, and the size of the cost. This example shows how @RISK can be used to forecast structural costs by setting up the problem, modeling the uncertainty, determining the time at which key events occur, running a simulation and interpreting the results.

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


Introduction to BigPicture
Presented by: Palisade
   06 March - 11am EST-Eastern US/ 5pm CET   » Register Now
   12 March - 6pm EDT-Eastern US / 9am AEDT 13 March   » Register Now
   18 March - 3pm EDT-Eastern US / 8am NZDT 19 March   » Register Now
   26 March - 1pm EDT-Eastern US / 6pm CET   » Register Now

Introduction to Risk and Decision Analysis using
@RISK and the DecisionTools Suite

Presented by: Palisade
   12 March - 11am CET-Central Europe / 6am EDT   » Register Now
   09 April - 11am CEST-Central Europe / 5am EDT   » Register Now
   14 May - 11am CEST-Central Europe / 5am EDT   » Register Now

Simulating this year’s NCAA tournament with @RISK
Presented by: Andrew Pulvermacher, Nighthawk Intelligence
   16 March - 11am EDT-Eastern US / 4pm CET   » Register Now

Introducción al análisis de riesgo y decisión con
@RISK y DecisiónTools Suite - en español

   Presentador: Manuel Carmona, Palisade

   12 mayo - 11am CEST-Central Europe / 5am EDT   » Registrar

» See complete Webcast schedule


The Global Leader in Risk
and Decision Analysis

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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