Just for fun, here we talk about using Monte Carlo simulation to estimate the value of π (3.14159…). A circle of radius one will have area equal to π, and a square drawn around that circle will have area 4. When centered at the origin the circle has the equation...
This is a continuation of Part I in this series on Decision Tree Analysis. Life is full of tough choices. Most of us muddle through them using best guesses and gut feelings. But have you ever wondered if there might be a more sophisticated way to make decisions? Many...
@RISK allows you to use historical data to fit data to a probability distribution. The process is very simple: first select the range where the data is located, and then select the Distribution Fitting button. @RISK will guide through the fitting process where you can...
In Part I combining simulation and decision tree techniques was introduced. But what does that actually give you? What meaningful results are created to justify the work? Obviously there are good things to come, or I wouldn’t be bringing it up! A regular spreadsheet...
CEO Message by Randy Heffernan Many who have been exposed to Monte Carlo simulation learned about it in the context of financial modeling such as asset management, cash flow analysis, or actuarial study. And that’s with good reason: The applications of Monte Carlo...
