School of Mining Engineering at the U of Witwatersrand uses @RISK for Financial Analysis Modelling
The School of Mining Engineering at Johannesburg’s University of Witwatersrand in South Africa is recognized as one of the top mining engineering schools in the world.
Mining engineers play a key role in the planning, exploitation, and excavation of mineral resources that are plentiful in South Africa.
Graduates of the mining engineering courses develop careers in the higher echelons of mine management as consultant engineers, specialists and senior executives of mining houses.
The School is using @RISK to give students training in and knowledge of Monte Carlo simulation.
“It’s very important to give students a real-world feel of how mining operations are managed financially – before they head out into the professional world,”
explains Professor RCA Minnitt.
“An understanding of Monte Carlo simulation is absolutely essential.
Without this discipline’s knowledge and use, robust and credible financial analysis is not possible.
@RISK is an essential tool for both our undergraduate and post graduate programmes.
In any one year, we have anywhere between 700 – 900 students in the School of Mining Engineering.
All our students are exposed to Monte Carlo simulation via @RISK.”
“@RISK is very well suited for Monte Carlo simulation in academia,” says Clinton Birch, Senior Lecturer, who runs the Mine Financial Evaluation at the University.
“We value it greatly as a modelling training tool to give our students a head start in their professional careers.
But we are also using it for broader mining industry related research, which is an important activity for the department.”
» Read the full case study
The approach that Palisade took with us was fantastic.
The company went out of its way to demonstrate how best we could use @RISK for scholastic modelling...
If anyone was to ask me which solution to use for Monte Carlo simulation in academia, my recommendation without a doubt would be @RISK.
Richard Minnitt, Professor
University of Witwatersrand
There are three easy ways to get the DecisionTools Suite for your students:
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Funds Flow Finance
Excerpted from Energy Risk Modeling, by Roy L.
Nersesian, published by Palisade
This example examines the nature of funds flow analysis for a corporate entity that has many operating divisions.
Suppose that there is an energy equipment manufacturer with numerous subsidiaries manufacturing a variety of products and providing diverse services to a wide range of industrial customers.
The company also manufactures components for consumer products.
How does a financial institution analyze the complexity associated with an ongoing concern in many lines of business? This example will walk you through the steps in @RISK and RISKOptimizer to determine the optimal timing and magnitude of equity and debt infusions in situations where there is a fair degree of imponderables with regard to revenue, variable and
fixed costs, and capital expenditures.
» Download the example file and step-by-step instructions
» Learn more about @RISK
» Learn more about RISKOptimizer
Generating Values from a Distribution
Q: I'd like to generate 10,000 sample values from a particular distribution, for example RiskLogLogistic(-0.0044898, 0.045333, 2.5862).
Is there some way to do it?
A: There are a variety of ways to generate values from a distribution.
Here is a choice of five methods.
The first three involve running a simulation, the last two do not.
Create an empty workbook and put that distribution in a cell.
Set iterations to the desired number of values, and run a simulation.
Then, do one of the following:
- Click the x-subscript-i icon to open the Simulation Data window.
Right-click anywhere in the data column, and select Copy, then paste the values into your Excel sheet.
- Click Excel Reports » Simulation Data (Inputs) or Simulation Data.
@RISK will create a new sheet with your data.
- Click Browse Results, click on the cell, and use the drop-down arrow at upper right to change Statistics grid to Data Grid.
Right-click on the column heading and select Copy, then paste the values into your Excel sheet.
- If you have @RISK Industrial or Professional, you can write a simple loop in Visual Basic to perform the sampling and save the random numbers.
The Risk.Sample method is explained in Sampling @RISK
Distributions in VBA Code
- Click the Random/Static "rolling dice" icon to make it active.
Insert your distribution function in a cell, and then click and drag to create as many duplicates as you need random numbers.
Highlight those values, and press Ctrl+C to copy, then Paste Special » Values.
(You can either paste the values in the same cells to overwrite the formulas, or paste them in other cells if you want to keep the formulas.)
» View the full Knowledgebase Article
Development of a client-based risk management methodology for the
early design stage of construction processes: Applied to the KSA
by Abdullah Albogamy, Nashwan Dawood, School of Science & Engineering, Teesside University,
Middlesbrough, United Kingdom.
Volume 22 - Issue 5 - July 2014
The risk factors associated with clients have a major impact on the successful delivery of a project from early design to the construction and operation stages.
Risk management studies conducted so far have not succeeded in providing an effective risk assessment methodology for clients in analysing and managing the risk factors that cause both project delays and cost overruns.
So, the purpose of this paper is to provide a methodology for a client-based risk management model.
The authors used @RISK for Monte
Carlo simulation as an integral part of their model.
More info about the paper here
The Academic Global Leader in
Risk and Decision
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.
What is The DecisionTools Suite?
The DecisionTools Suite is the world’s only integrated set of risk and decision analysis programs.
The Suite includes @RISK for Monte Carlo simulation, BigPicture for mind mapping and data exploration, PrecisionTree for decision trees, and TopRank for “what if” sensitivity analysis.
In addition, DecisionTools Suite comes with StatTools for statistical
analysis and forecasting, NeuralTools for predictive neural networks, and
Evolver and RISKOptimizer for optimization.
All programs work together seamlessly, and all integrate completely with Microsoft Excel for ease of use and maximum flexibility.
The Suite is offered in three affordable and flexible licensing options
for those in academia: Student Versions, Course Licenses and Full Academic Versions.
» Schools using Palisade software
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