Modeling Public Transit Expansion in Canada, with @RISK for Excel and Project
The Canadian city of Edmonton, Alberta, examined expanding their public transportation, known as the Light Rail Transit (LRT) system, from just one line to a network that connects all sectors of the city. Of course, projects like these are expensive—anywhere from $200-$800 million—and come with considerable uncertainty. As part of that team, SMA Consulting’s Risk and Project Controls Manager Jesse Kostelyk was tasked with estimating the potential costs and analyzing the uncertainties involved in the project. To do so, he turned to @RISK.
@RISK allows for the project management modeling that Kostelyk and SMA Consulting need. Thanks to @RISK’s integration of Microsoft Project schedules with Microsoft Excel models, the consulting team could manipulate schedule inputs and then observe how those changes would affect the budgetary outcome. The result was a much more objective, precise view of the scope of the LRT expansion for decision-makers.
“@RISK’s ability to integrate models in Excel and Project opens up a world of possibilities for capturing and quantifying construction project uncertainty,” reports Kostelyk. “At SMA Consulting, it’s our go-to program for risk analysis.”
After running the risk analysis using Monte Carlo simulation, the project managers were able to bring their results to the Edmonton City Council and present them with a defined cost range. “They are asked, ‘How much risk are you willing to take to move this project forward?’” says Kostelyk. “Then we can quantify how certain we are about how much it will cost.”
Accordingly, the project team decided to choose a budget at the 85th percentile of certainty, which, when the construction contract was awarded, was within 2% of the winning bid. Thanks to @RISK’s integration of both schedule and cost concerns, the Edmonton LRT project began on solid financial footing.
» Read the detailed case study
2016 Risk Conferences – Call for Papers
Palisade Risk Conferences are taking place around the globe in 2016! We're looking for interesting applications of @RISK and DecisionTools Suite software for presentations.
New US Risk Conference dates announced!
Houston June 10th - Register Now
New Orleans November 1st & 2nd - Call for Papers
EMEA Risk Conference dates
Munich 9. Juni - Agenda - Jetzt anmelden
Amsterdam June 14th - Schedule - Register Now
Edinburgh Sept 22nd - Call for Papers - Register Now
Edinburgh September 22nd - Call for Papers - Register
Moscow October 6th - Call for Papers - Register
Abu Dhabi October 17th - Call for Papers - Register
Cape Town November 3rd - Call for Papers - Register
University of Pretoria Creates an @RISK Model for Stopping the Spread of Avian Flu
The avian influenza virus – or avian flu – is a fast-spreading infection that affects poultry and potentially people worldwide. While the risk to humans is not completely understood, stopping human exposure to the virus is critical. According to Dr. Folorunso Oludayo Fasina, a senior lecturer at the University of Pretoria’s Department of Production Animal Studies, it is important to understand “how the virus gets into the food system, how it spreads and how it can be managed. To do this, we need risk assessment and exposure assessment, as well as a response model. Once we have this information, we can implement measures to stop the risks.”
Dr. Fasina and his colleagues created a model for foodborne contamination that was specific to Africa, where the virus has already infected 12 countries. The team studied both biological and cultural aspects, including food processing, trade, and cooking-related practices, and collected data from more than 375 Egyptian and Nigerian sites including homes, local producers, live bird markets, village and commercial abattoirs and veterinary agencies. As a first step, the team used Palisade’s TopRank tool, part of the DecisionTools Suite, to analyze the sensitivity of each of the identified contributors to the overall risk. This helped the team understand which of the contributors were the most important.
Next, the team moved to @RISK to help predict the different ways the virus could be spread. Using Monte Carlo simulation, @RISK can quantify the probabilities of different outcomes – or infection rates – occurring, as well as determine the optimal preventive measures to mitigate the risk of animal-to-person infection..
The results revealed numerous opportunities for the avian influenza virus to be spread, and found that the estimated risk for humans was higher than previously reported. Says Dr. Fasina, “@RISK is a valuable tool to investigate these problems and do risk predictions either prospectively or retrospectively. Utilizing the outputs from models like this can help health policy planners and public health officials to take anticipatory measures to prevent future disasters associated with infectious diseases like the avian flu.”
» Read the full case study
Stress Testing Insurance Claims
This example shows how you might model the uncertainty involved in payment of insurance claims. To model this properly, you must account for the uncertainty in both the total number of claims and the dollar amounts of each claim made. This is done using the RiskCompound function.
The first part of this example assumes that the company is required by law to have enough money on hand to pay all the claims with the probability of 95%, and that it can only set aside $2000 for the purposes of this particular insurance product.
On the other hand, a simulation of the model shows that the 95th percentile of the Total Payment Amount is around $2700. Assume further that the company can purchase from a larger company an insurance policy against the number of claims being in the top decile. Using this example, you can find out if it makes sense for the larger company to sell that policy for under $350.
» Download the example model
» More about @RISK
Introduction to BigPicture
Presenter: Michelle Jackson and
Robin Holloway, Palisade
04 May - 10am BST / 5am EDT / 11am CEST » Register Now
18 May - 10am EDT / 3pm BST » Register Now
26 May - 10am BST / 5am EDT » Register Now
BigPicture and PrecisionTree: A Collaboration of Two Products
Presenter: Michelle Jackson, Palisade
12 May - 1pm EDT / 7pm CEST / 6pm BST » Register Now
New topic: BigPicture for Entrepreneurs and MLMs
Presenter: Michelle Jackson, Palisade
01 June - 1pm EDT / 7pm CEST / 6pm BST » Register Now
Introduction to Risk and Decision Analysis
using @RISK and
The DecisionTools Suite
10 May - 2pm EDT / 11am PDT / 7pm BST » Register Now
12 May - 10am BST / 11am CEST » Register Now
07 July - 10am BST / 11am CEST » Register Now
Oil and Gas Applications of @RISK and the DecisionTools Suite
Presenter: Doug Oldfield, Palisade
09 June - 10am BST / 11am CEST / 5am EDT » Register Now
» See complete Webinar 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.