Business

Presenting Simulation Results

Presenting the results of a Monte Carlo simulation can be challenging when your audience isn’t inclined to receive probabilistic information.  Decision makers often want a single number for net present value, project completion date, or profit. How do we as the modeler/analyst present this information so it is understood and appreciated for the extra information …

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The Risks Hidden in Single Point Estimates

Building a spreadsheet model for a business case, product profitability projection, etc. often entails estimating some input factors.  The estimates are often a most likely value, an estimated average, or median.  These are single-point estimates since you’re only using one number (a single data point) for each input.  Finally, you get an output number from …

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decision making under risk

Decision Making Under Risk and Uncertainty

Decision making under risk and uncertainty is a fact of life.  There are many ways of handling unknowns when making a decision.  We will try to enumerate the most common methods used to get information prior to decision making under risk and uncertainty.  We’ll also look at decision rules used to make the final choice.  For …

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