2013 Risk Conference Risk Analysis, Applications & Training
Table of Contents Schedule 02 Presenters 03 Palisade Staff: Who to Ask
Industry Case Studies
Millennium Gloucester Hotel & Conference Centre Cromwell Suite Room 4
Cromwell Suite Room 3
Cromwell Suite Room 1
Cromwell Suite Room 2
Tuesday 11 June 2013
CROMWELL suite 1 & 2
CROMWELL suite 3
8:00 – 9:00
Registration, coffee & refreshments
CROMWELL suite 4
9:00 – 9:30 Conference Kickoff and Palisade Update, Sam McLafferty, Palisade Corporation - CROMWELL suite 1 & 2 9:30 – 10:00 Anatomy of a Rollout: How Risk and Decision Analysis is Implemented Across an Enterprise - CROMWELL suite 1 & 2 Craig Ferri, Palisade Corporation 10:00 – 10:45 SOFTWARE PRESENTATION CASE STUDY CASE STUDY Palisade Corporation Alesco Risk Management The Phoenix / Services Limited MTA School of Business Introduction to @RISK (cost estimation & Using @RISK to develop Floored, but not capped: risk register focus) an optimal capital and Defined benefit retirement fund Sarah Sherry reinsurance strategy based on @RISK Derek Thrumble Dr Ido Kallir 10:45 – 11:15
11:15 – 12:00 SOFTWARE PRESENTATION CASE STUDY CASE STUDY Palisade Corporation EpiX Analytics Cranfield University DecisionTools Suite 6: What's Risk-based Portfolio Production history variation New, Useful Tips and Management: A based probabilistic simulation Known Unknowns pharmaceutical application analysis of Gas-To-Wire Doug Oldfield Dr Solenee Costard monetisation of associated natural gas N.B. Anosike 12:00 – 12:45 SOFTWARE PRESENTATION CASE STUDY CASE STUDY Palisade Corporation Halcrow a CH2MHill Company SzigmaSzervíz Ltd Introduction to TopRank Monte Carlo driven probability How to identify and evaluate & PrecisionTree modelling of catastrophic failure risks having an impact on timely Sarah Sherry in large diameter PCCP pipes completion of a project using Alec Yeowell @RISK Dr István Fekete 12:45 – 1:45
Lunch - sw7 restaurant
1:45 – 2:30 SOFTWARE PRESENTATION CASE STUDY CASE STUDY Palisade Corporation Integrated Environmental KPMG Solutions Company Stress testing: Increasing Customized Software Applications using @RISK Using Monte Carlo Simulation requirements post financial and – Simplify and for Air Emission Inventories crisis – Using @RISK Automate Your Models Brian Freeman Ashutosh Nawani Dr Javier Ordóñez 2:30 – 3:15 SOFTWARE PRESENTATION CASE STUDY CASE STUDY Palisade Corporation Deloitte Technical University of Denmark Introduction to Project Risk Using @RISK to help Uncertainty modeling revisited: Management using @RISK 6 optimize start-up companies What if you don't know the Dr Javier Ordóñez in the FSI segment probability distribution? Frank Lyhne Hansen Dr Hans Schjær-Jacobsen 3:15 – 3:45
3:45 – 4:30 Keynote: You got @RISK, now what? Building technically sound simulation models - CROMWELL suite 1 & 2 Dr Francisco Zagmutt, EpiX Analytics 4:30 – Networking Reception - CROMWELL suite 5 EXPERT SESSIONS will take place in the Harrington Boardroom.
Presenters Sessions in the 2013 Palisade Risk Conference are led by experts in their fields. Palisade’s own experienced software instructors and senior consultants join forces with independent consultants and leading managers from industry to provide in-depth content of significant value to all who attend. Presenters are listed alphabetically by last name.
Nnamdi Benedict Anosike School of Engineering Cranfield University Nnamdi Benedict Anosike is a Research (PhD.) Student at Cranfield University in School of Engineering, department of Thermal and Propulsion. Nnamdi holds a Bachelor of Engineering degree and Master of Science degree both in Mechanical Engineering. Soon after graduating in Mechanical Engineering from the University of Glasgow, he worked as a Mechanical Design Engineer with the National Engineering Design and Development Institute before joining Cranfield University as a Researcher in 2010.
Dr Solenne Costard Senior Consultant EpiX Analytics Dr. Solenne Costard is a senior consultant at EpiX Analytics. As part of her consulting and research work, Solenne has performed risk analysis projects in a variety of industries worldwide. Solenne’s unique combination of analytical skills and field experience makes her a valuable asset to EpiX Analytics’ team. Her sound training allows her to apply risk analysis modeling and other analytical techniques to a broad range of projects. Her experience includes qualitative and quantitative risk assessments, modeling of disease introduction and spread in populations, multi-criteria decision analysis, and various statistical analysis methods. Solenne is actively involved in several of EpiX Analytics’ research and consultancy projects; she is one of the instructors of EpiX Analytics’ courses in epidemiology and food safety, and of the postgraduate certificate in risk analysis offered in conjunction by the University of London and EpiX Analytics. Bio with representative publications at http://www.epixanalytics.com/Dr.-Solenne-Costard.html
Dr István Fekete Managing Director SzigmaSzerviz Ltd. Project leader, Corvinus University of Budapest Institute for Business Development, Department of Strategy and Project Management. Managing Director of SzigmaSzerviz Ltd. Previously served as business risk manager for Hungarian Telekom. Certified mechanical engineer, German-Hungarian interpreter and economical engineer. Completed his PhD in 2001 with research around developing a business risk analysis methodology. Certificate in Hungarian Innovation Grand Prix (2002) and Monte-Carlo Special Award (USA, Denver Colorado, 2007 ). Many Hungarian and foreign publications. Dr. Fekete teaches project management at Budapest University of Technology and Economics, and is a member of the Hungarian Project Management Association.
4 Craig Ferri Managing Director Palisade EMEA Craig Ferri was promoted to managing director of Palisade Europe in 2005, having joined as sales and marketing director for the region in 2003. During that time the company has shown year on year growth. In addition to increasing brand awareness in EMEA and ensuring outstanding customer service, Craig’s helm at Palisade Europe has seen the company continue to expand throughout Europe, the Middle East and Africa, and more recently into India. Craig built up nine years' experience of sales and marketing roles in niche technology sectors prior to working at Palisade. Key positions included global marketing director at software company Infomax Incorporated, and European marcomms manager at networking company Anixter. Craig holds a Bachelor of Science degree in Business and Marketing, and an MBA.
Brian Freeman Team Leader Integrated Environmental Solutions Company Brian Freeman is the Team Leader, Air Regulatory Management Systems for the United Nations Development Program’s Kuwait Integrated Environmental Management project. He has been living and working in the Middle East for the last eight years. He holds a Bachelor's of Science in Electrical Engineering from Worcester Polytechnic Institute in Massachusetts and a Master's of Science in Environmental Management from the Air Force Institute of Technology in Ohio. His twenty years of experience includes service with the United States Department of Defense and international environmental regulatory authorities. Mr Freeman is also a licensed professional engineer in the states of California and Ohio, a Project Management Professional and a Qualified Environmental Professional.
Dr Ido Kallir The Phoenix / MTA School of Business ∙ Ph.D. Finance - Tel Aviv University (2012) ∙ Assistant professor of finance, MTA, Tel Aviv-Jaffa, Israel ∙ Research areas: learning and convergence models, long term investment and pension optimization. ∙ The scientific officer of the life cycle division, “The Phoenix”, Israel ∙ 12 years of analytical experience in the high-tech and VC industry.
Frank Lyhne Hansen Deloitte
Ashutosh Nawani KPMG
Frank has extensive experience in operational, financial and strategic risk management. This includes the development, description and analysis of models as well as implementation, discussion and elaboration of economic models for the total economic optimisation and preparation of management reporting.
Ashutosh joined KPMG’s Financial Risk Management team in January 2012. Prior to joining KPMG Ashutosh’ s experience has included:
Frank has served as project and program manager on several major projects both in Denmark and abroad. In addition, Frank has a long experience of teaching as an associate professor on CBS (financial) where he teaches risk management. Frank has taught at CBS since 1996 and has a large network and extensive experience in teaching in risk management, statistics and finance.
Responsible for the delivery, operational running, enhancement and governance of credit risk stress testing models used for impairment and capital forecasting for the Corporate Banking and Wholesale Markets portfolios.
Sam McLafferty President and CEO Palisade Corporation Sam McLafferty is Palisade's founder, president, and CEO. He started the company in 1984 with the release of PRISM, a stand-alone Monte Carlo simulation package for DOS on the PC. PRISM later evolved into @RISK for Lotus 1-2-3, and then for Excel. Sam is Palisade's lead developer, with over thirty years of programming experience. He works closely with the technical and sales staff, ensuring that customer feedback is heard. He personally oversees the development and evolution of every one of the fifteen software products Palisade sells. Prior to Palisade, he was a risk analysis consultant.
7 years of credit risk management, modelling and analysis experience at two large global Financial Institutions.
Lead the delivery of European Banking Authority (EBA), International Monetary Fund (IMF) and FSA stress tests for a leading UK bank. Quantitative approaches for stressing LGD for both Commercial Real Estate and mainstream corporate banking assets Developed the framework for portfolio analysis by applying strong analytical and economic principles to identify and evaluate portfolio credit risk, providing recommendations for improvements to credit policies and lending strategies. Developed and maintained the suite of credit risk stress test models, ensuring that processes are in place and all coding (e.g. SQL, SAS, VBA, etc.) used for the implementation of all stress testing models are fully tested and audited to internal standards. Led the enhancement of impairment and credit risk stress testing methodologies for unsecured products within the Retail division of a leading UK bank. Ashutosh is a member of the FRM team and specialises in credit risk stress testing, capital and impairment forecasting and portfolio analytics. He has a Masters in Economics with specialised focus on open economy models and macroeconomic modelling.
Doug Oldfield Sales and Business Development Manager Palisade EMEA Doug Oldfield joined Palisade in 2008 and is responsible for looking after sales and business development in the north of the UK, Africa, and the Middle East. Prior to joining Palisade, Doug worked for 8 years at an IT recruitment company in London, and was also manager of a number of hi-fi shops - including “The Busiest Shop in the World.” Doug holds a Bachelor of Arts degree in Politics and Philosophy.
5 Dr. Javier Ordóñez Director of Custom Solutions Palisade Corporation Dr Javier Ordóñez holds a BS in Civil Engineering from the Universidad de Cuenca, Ecuador and a MS in Project Management from the University of Maryland. Javier earned his PhD from the University of Maryland performing research on project risk analysis. His current research deals with cost and schedule integration and correlation issues through the use of Bayesian belief networks. Javier's experience is in the areas of construction and project management, optimal project and capital investments selection, earned value management, engineering and project risk analysis, and operations research applications to engineering and management problems. Javier has taught as an adjunct professor in the Project Management Program at University of Maryland and provides training in risk and decision analysis. He is also registered as a Project Management Professional (PMP).
Sarah Sherry Consultant and Trainer Palisade Corporation Sarah Sherry is a software consultant for Palisade Corporation. Sarah was previously a Senior Lecturer at the Kelley School of Business at Indiana University. She taught spreadsheet modeling techniques and programs in the DecisionTools Suite for over thirteen years, and was nominated for the Kelley School’s highest teaching award four times, and received it once. After graduating, many of her former students and teaching assistants seek her advice and counsel in their places of work (accounting firms, loan departments, manufacturing operations, hospitals, political campaigns, and so on), on difficulties ranging from issues with data integrity to troubles in spreadsheet modeling. Sarah collaborated with Dr. Wayne Winston on two Harvard Business School Press courses, Spreadsheet Modeling and Mathematics for Management, and she is currently co-authoring an introductory business analytics textbook, to be published by Indiana University Press. Sarah earned an M.A. in Applied Linguistics at Indiana University and completed the required coursework for a Ph.D. in Linguistics.
Dr Hans Schjær-Jacobsen Director, Vice Dean, Professor Technical University of Denmark Dr Hans Schjær-Jacobsen is a Professor at the Copenhagen University College of Engineering where he also is a Director of Research, Development, and Innovation. He holds a Master of Science and a PhD degree in Electrical Engineering from the Technical University of Denmark, and also a degree in Business Administration from the Copenhagen Business School. Previously, he held managerial positions with industrial companies as well as institutions for management consulting, training, and education. He also served as a teacher and researcher at different universities and has published a number of scientific papers within the areas of applied mathematics, computer-aided-design of communication systems, and decision making under economic uncertainty.
Derek Thrumble Partner Alesco Risk Management Services Limited Derek is a founding Partner of Alesco Risk Management Services Ltd whose role is to provide analysis of exposure and loss information to assist in the structuring of complex insurance programmes for major Energy companies. Derek has many years’ experience in the optimal use of captive insurance companies, industry mutual insurance companies and other risk financing approaches. Derek also analyses broader trends within the Energy Insurance market including industry losses, premium rates and insurance capacities. After graduating with a degree in mathematics and an MSc in statistics Derek started his career as an Analyst with Anistics in 1985 progressing to Managing Director of the London operation. In this role Derek pioneered the use of statistical and actuarial modelling to support the structuring of insurance programmes for large industrial risks.
Alec Yeowell Halcrow a CH2MHill company Alec is a specialist in physical asset management and has worked on water industry projects for 10 years. He specialises in modelling the behaviour, performance and risk associated with water company assets. After graduating in Civil Engineering in 1999, Alec worked for eight years at WRc Plc delivering water industry focused research projects. Alec maintains a strong interest in innovation and has been actively involved in Halcrow internal research activities where he has recently been developing spatial optimisation capabilities. The tools have been applied to capital maintenance planning activities to enable clients to meet and improve on agreed performance and spending targets. Alec is a Chartered Engineer and Member if the Chartered Institute of Water and Environmental Management (CIWEM).
Dr Francisco Zagmutt Managing Partner EpiX Analytics Dr Francisco J. Zagmutt is a managing partner at EpiX Analytics. As part of his consulting and research work, Francisco has performed and supervised numerous risk analysis consulting projects in a wide variety of industries worldwide. Through his work, Francisco has supported decision makers in the development of governmental and private policies in the United States and abroad. Francisco also has experience providing expert witness support on trade litigations and participating in international expert working groups. Francisco has developed a well-known reputation in the risk analysis community for his teaching abilities and for his clarity when communicating complex risk assessment principles to a broad audience. As such, he has ample experience teaching courses, workshops and seminars on risk analysis, epidemiology and simulation modeling for public and private institutions worldwide. He is the main instructor of EpiX Analytics’ courses in epidemiology and food safety, including the internationally renowned Animal Agriculture and Food Safety Risk Analysis course, and the "Quantitative Risk Analysis and Disease Modeling in Epidemiology course which Francisco developed based on his working experience modeling the risk of introduction and spread of diseases in populations. Francisco has also been an instructor for the prestigious Foreign Animal Disease courses organized by the USDA in Plum Island, NY, and for the Epi on the Island course series in PEI, Canada Dr Zagmutt has presented his work at international conferences, published articles in a number of international scientific journals, and is the author of two risk analysis book chapters. He is a reviewer for scientific journals such as the Risk Analysis Journal, conference proceedings, and has also acted as an independent reviewer in scientific panels.
Palisade Staff: Who To Ask If you have any sales or technical questions, please feel free to ask a Palisade staff member. The following list of names will help you find the right person to answer your question:
For sales questions in the South of UK, and India: Aman Bajaj Regional Sales and Business Development Manager
For questions about Custom Development: Javier Ordóñez Director of Custom Solutions
For sales questions in Northern UK, Africa and the Middle East: Doug Oldfield Regional Sales and Business Development Manager
For technical questions related to the software: Javier Ordóñez Director of Custom Solutions Sarah Sherry Consultant and Trainer
For sales questions in The City of London, Scandinavia and Southern Europe: Manuel Carmona Regional Sales and Business Development Manager
For sales questions in the DACH region, Benelux and Eastern Europe: Sascha Stange Regional Sales and Business Development Manager
Rafael Hartke Consultant and Trainer
Or any of the knowledgeable Sales and business development team!
For other questions about Palisade: Craig Ferri Managing Director, Palisade EMEA & India
Expert Sessions Harrington Boardroom
Palisade offers one-on-one consulting sessions with Palisade technical experts and consultants throughout the Palisade Risk Conference. Sign up for a 45-minute slot to meet with us and discuss your own risk or decision modelling challenges. Feel free to bring your laptop and your models. Expert Sessions will take place in the Harrington Boardroom. Several sessions may take place at one time. Sessions are confidential and there is no additional charge. Slots are available on a first come, first serve basis. To sign up, please stop by the registration desk at any time.
Plenary Sessions Plenary Sessions will address current trends in risk management as well as general best practices in decision making and implementation. These talks will be of interest to the entire risk analysis and quantitative modelling community.
Palisade Overview and Examining Risk in the Wrong Hands 9:00 – 9:30 Company: Palisade Corporation Presenter: Sam McLafferty Palisade President Sam McLafferty reviews goals of this year’s conference and ways you can benefit from the event before giving some context and background about Palisade as a company. He will also review important partnerships with leading global corporations in fields such as banking, energy, engineering, and manufacturing. Then, Sam will touch on some of the key new innovations in the version 6 release of @RISK and DecisionTools Suite software, such as MS Project integration & probabilistic time series forecasting, and will explain the added insights these latest features bring to risk and decision analysis. More in-depth exploration of @RISK and DecisionTools Suite can be found in the Software Presentation track.
Anatomy of a Rollout: How Risk and Decision Analysis is Implemented Across an Enterprise 9:30 – 10:00 Company: Palisade EMEA Presenter: Craig Ferri Entrenched attitudes, IT policies, lack of quantitative training — there are many barriers that can get in the way of implementing an effective risk analysis solution. Yet the benefits of such a challenge are worth the effort: fewer surprises, new opportunities, and better decisions. Building on Sam's discussion of successful Palisade customers, EMEA Managing Director Craig Ferri will expand on some key corporate adoptions of @RISK and DecisionTools Suite software with a view to understanding important steps each took on their path to implementation.
keynote: You got @RISK, now what? Building technically sound simulation models 3:45 – 4:30 Company: EpiX Analytics Presenters: Dr Francisco Zagmutt Stochastic modeling is becoming an increasingly important technique in business analytics. However, implementing stochastic models can be difficult and requires good knowledge of probability theory and statistics. Analytics practitioners are often first exposed to stochastic modeling by converting previously deterministic models into stochastic ones. This process can result in useful and insightful new models, but there are several traps and mistakes that are frequently made when building stochastic models, and can make a model even less insightful than a deterministic one. Even the most seasoned analyst can make these mistakes, as some of them are not easily apparent when using software such as spreadsheets or script-based modeling platforms. During this hands-on workshop, we will use real-life examples to demonstrate some of these principles to build sound simulation models, and we will provide a checklist for analysts to keep in mind while building their models.
Industry Case Studies Hear users in the field describe how they apply @RISK and DecisionTools Suite software to real-life problems. Industry Case Studies cover a wide range of sectors and disciplines. They illustrate how a little creative thinking can solve problems in ways never before imagined.
Using @RISK to develop an optimal capital and reinsurance strategy
Risk-based Portfolio Management: A pharmaceutical application
10:00 – 10:45 Industry Focus: Insurance/Reinsurance Company: Alesco Risk Management Services Limited Presenter: Derek Thrumble
11:15 – 12:00 Industry Focus: Finance/Pharmaceutical Company: EpiX Analytics Presenter: Dr Solenne Costard
Most large oil and gas companies have established captive insurance company subsidiaries to facilitate their risk financing and risk transfer programmes. For these buyers there are a range of options available to manage risk including direct retention, traditional insurance, structured or multi-year products (which blend risk retention and risk financing) and industry mutual pools.
This case study illustrates the usefulness of Monte Carlo simulation modeling to forecast a complex Pharmaceutical portfolio, and is based on a real life consulting project.
In this presentation we illustrate the use of @RISK to test the impact of alternative reinsurance strategies upon the financial statements of the captive insurance company; to achieve an optimal position in terms of minimising external (reinsurance) premium within a target level of capitalisation and acceptable levels of volatility.
Floored, but not capped: Defined benefit retirement fund based on @RISK 10:00 – 10:45 Industry Focus: Finance Company: The Phoenix / MTA School of Business Presenter: Dr Ido Kallir On January 1st 2013, the Israeli treasury ordered the Insurance companies to end the selling of life insurance policies as pension plans with embedded Longevity Risk insurance. This step had cut of the most profitable segment in the insurance industry. The insurance companies' assets under management cover 65 Billion USD. Other pension schemes, without longevity insurance, manage 155 Billion USD yet the insured segment is responsible for 62% of the annual net profit. The circumstances sent the insurance firms to present series of option-based financial products. These products were rejected by the regulator for providing only a 5 years securitization or for forcing a cap on the annual return. We were faced with the challenge to develop a long-term financial product that will: Guarantee long term (up-to 40 years) of floored return. Not impose a ceiling. Be well-defined and have realistic requirements of Capital Confinement ave transparent mathematical structure, so the Treasury's risk H management board will be able to fathom and approve the model. Using Palisade's DecisionTools Suite (Evolver and @RISK) and based on the optimized investment product that we built for the Phoenix in the past using the same Suite, we were able to plan and develop a product successfully in less than 3 months. Currently it is the only "Floored Defined Benefit" pension product in the market. Marketed at a reasonable price we expect it to appeal to the more risk-averse households.
The development and manufacturing of new pharmaceutical products is a “risky” business. There are many uncertainties, or risks, in various steps of the development and sale processes, such as product approval, time to launch, production volume, product cost and selling price. These risks ultimately influence the revenues and margins of a given product portfolio. In this context, decision-support tools are useful to provide senior management with insights as to which products should be included in the portfolio, and what are the main risks that need to be monitored and mitigated. A Monte Carlo Portfolio Management tool was developed for the evaluation of the current portfolio, and of potential new products. The decision support tool includes systematic rules for comparable evaluation of products, based on products characteristics and probability distributions representing uncertainties. For example, the probability of approval of a new product is determined by a set of product characteristics - type of molecule developed, current phase of development, and existence of closely related drugs on the market - and the uncertainty in this approval is represented by a series of distributions derived from historical data and expert opinion. After thousands of simulations, the tool automatically produces tables and graphs which give insights into the overall revenues and risks of the evaluated portfolio. The forecast of revenue and margin for a given product or portfolio and the relative contribution of products to total revenue and margin provides an overview of portfolios’ overall value and potential key products. Graphs showing the products’ benefits (i.e. revenue and margin) against their risks (i.e. uncertainties), and their relative contribution to the uncertainty in the overall revenue and margin, help managers clarify portfolios’ risks and balance their composition - avoiding too many risk products and risky products with low revenues. The Monte Carlo Portfolio Management tool provides a consistent comparison of portfolios values and risks, and has been used successfully by our client to better define and manage their product portfolios.
9 Production history variation based probabilistic simulation analysis of Gas-To-Wire monetisation of associated natural gas 11:15 – 12:00 Industry Focus: Energy Company: School of Engineering, Cranfield University Presenter: N.B. Anosike Monetisation of associated natural gas with uncertainty characteristics in reserves calculation or production data consequently could lead to erratic supply of gas during monetisation. This paper considers the probabilistic analysis to evaluate the investment risk associated with onsite electric power generation or gas-to-wire (GTW) monetisation of associated natural gas due to uncertainties in forecasted production data. This analysis is done using Monte Carlo simulation method offered by @RISK commercial computer software. A contrast between probabilistic reserves data and available power plant MWe are analysed. The observed power plant operatonal risk trend and their sensitive results are discussed. In addition, a proposed operational management strategies sought from power plant investor's standpoint are highlighted and the general considerations for these management strategies are also presented.
Monte Carlo driven probability modelling of catastrophic failure in large diameter PCCP pipes 12:00 – 12:45 Industry Focus: Utilities Company: Halcrow a CH2MHill company Presenter: Alec Yeowell Pre stressed concrete cylinder pipe (PCCCP) was commonly used in large diameter water supply systems and can suffer catastrophic failure from release of the internal pre stressing energy as the materials deteriorate. Risk of failure from PCCP pipe is an important consideration for the owners and operators of water systems in the USA and Canada where the pipe is used to deliver critical water supplies in transmission and aqueduct systems. The presentation describes the development of a predictive failure probability model for PCCP that will drive a comprehensive risk based investment planning tool. The predictive model utilises sequential reliability analysis methods powered by Monte Carlo simulation provided by @RISK to model the complex failure mechanism of PCCP. The presentation will describe the drivers for developing models for PCCP, the construction and calibration of the model and examples of the results.
10 How to identify and evaluate risks having an impact on timely completion of a project using @RISK
Stress testing: Increasing requirements post financial crisis – Using @RISK
12:00 – 12:45 Industry Focus: Energy Company: SzigmaSzervíz Ltd Presenter: Dr István Fekete
1:45 – 2:30 Industry Focus: Finance Company: KPMG Presenter: Ashutosh Nawani
In addition to safety operation the requirement of profitability will become of great importance year by year in case of a nuclear power plant. One possible solution can be using fuel with extended life cycle to achieve this goal. The efficiency can be speeded up with introduction of longer maintenance cycle for nuclear reactors taking into account the opportunity deriving from fuel with extended life cycle. Of course the implementation of such projects has numerous risks.
This presentation will look at, stress testing and the increasing requirements following the financial crisis. Additional topics that will be covered are:
In case study of SzigmaSzervíz Ltd (Budapest) the risks having an impact on the long term return and timely completion of such projects are presented in case of a Hungarian nuclear power plant. In the latter case the first task was to prepare the project plan suitable for risk assessment by using Microsoft Project 2007. After finishing this task the risk factors having an impact on the timely completion of each activity were identified using Szigma Integrisk® methodology developed by SzigmaSzervíz Ltd. Following this step the evaluation of each indentified risk factor was done with scenario analysis. Monte Carlo Simulation was run by @RISK 6.0 using the results coming from scenario analysis. We were looking for the answers for the following question: What is the probability of finishing the project on time? What are the critical risks having an impact on the duration of each project activity? What are the project activities that are most responsible for project delay? After finishing the evaluation risk response actions were formulated for each critical risk in order to increase the chance to finish the project on time. These proposals were accepted by decision makers of the nuclear power plant. The implementation of them is in progress nowadays. During this work SzigmaSzervíz Ltd. provided the methodology support, while the experts from nuclear power plant gave the information necessary for indentifying and evaluating the different risks.
Using Monte Carlo Simulation for Air Emission Inventories 1:45 – 2:30 Industry Focus: Energy & Environment Company: Integrated Environmental Solutions Company Presenter: Brian Freeman Calculating air emissions from mobile and stationary sources is essential part of air quality management. Typical methodology requires estimation of input material and an emission factor calculated through empirical measurements of similar processes. The typical input material is usually fuel which is a mixture of many components that generate different air pollutants such as Sulfur Dioxide, Nitrogen Dioxide, Carbon Monoxide, Carbon Dioxide and Volatile Organic Compounds that are the precursors to Ozone. Emission factors represent parametric estimators that incorporate a host of variables related to the process and the input material. Some emission factors have errors greater than 25% but are accepted by regulators and industry as an economic substitute to continuous emission monitoring systems (CEMS). This presentation shows how Monte Carlo simulation was applied to input variable and emission factors using @RISK to identify worst case and most likely scenarios of standard stationary sources. The technique was applied to actual emissions inventories to evaluate potential health impacts related to underestimating emission factors.
Sub-topics 1. What is stress testing? 2. Importance of stress testing post crisis. 3. Modelling approaches. 4. Illustration of modelling methodologies. 5. Illustration of stress testing framework for financial institutions. 6. How @RISK can help.
Using @RISK to help optimize start-up companies in the FSI segment 2:30 – 3:15 Industry Focus: Banking/Insurance Company: Deloitte Presenter: Frank Lyhne Hansen As well as being a CEO and owner of his own company, over the past decade Frank has also held senior consulting positions at March, PricewaterhouseCoopers and more recently Deloitte. At all of these he has used Palisade tools to help in the analysis of risk and decision-making. During this presentation Frank will talk about how he has used his wealth of experience, @RISK and quantitative methodologies to start up his own bank and insurance company.
Uncertainty modeling revisited: What if you don’t know the probability distribution? 2:30 – 3:15 Industry Focus: Academia Company: Technical University of Denmark Presenter: Dr Hans Schjær-Jacobsen This presentation deals with the situation where you need to calculate the response of a system model to input variables, which are only known with some uncertainty. The system model itself may also be subject to uncertainty. The classical way of representing uncertainty is that of probability distributions. An uncertain input variable is represented by a probability distribution reflecting a genuine statistically based knowledge of the uncertainty of that particular variable or a subjective assumption of the uncertainty. There might be good reasons to work with a finite support of the probability distribution. Alternatively, if there are no limitations on the value of the variable, infinite support is relevant. If the input variable is not bound within limits and the probability distribution is known a Monte Carlo simulation method like @RISK is readily applicable. If the probability distribution is unknown no calculations are meaningful. If the input variable is bound within limits and the probability distribution is known @RISK can be readily used. If the probability distribution is unknown we can use two different approaches to find the limits (if any exists) of the system model response: 1) @RISK can be applied using an arbitrary probability distribution, like the uniform distribution. By identifying the minimum and maximum of the resulting response (which is otherwise irrelevant) the upper and lower limits of the response can be established. 2) By application of interval representation and calculation using global optimization the limits of the response can be established likewise, but more precisely. The interval representation can be extended to fuzzy numbers. The presentation includes numerical examples.
Software Presentations Here’s your chance to get exposure to the latest in risk and decision analytics software and techniques. Get more from @RISK and each of the products in Palisade's DecisionTools Suite. Sessions are taught by Palisade's expert consultants and trainers. Learn direct from the source!
Introduction to @RISK – Cost Estimation & Risk Register focus
Customized Software Applications using @RISK and VBA
10:00 – 10:45 Company: Palisade Corporation Presenter: Sarah Sherry
1:45 – 2:30 Company: Palisade Corporation Presenter: Dr Javier Ordóñez
@RISK has many uses across different industries, but cost estimation is probably the most common one. This presentation will look at how a deterministic cost estimate model can easily be converted into a probabilistic one using @RISK. Confidence levels will be explored, as will the use of alternate parameter distributions. There will also be a discussion of the impact of risk events & how to model them within a cost model using a simple risk register.
@RISK and DecisionTools Suite software ship with full-featured development environments that allow you to create custom applications using Palisade technology directly in Excel (Excel Developer Kits or XDKs). You can customize the application interface to include only what the users need, hiding unused @RISK functionality and preventing user access to the underlying model logic. You can also automate processes like reporting, generating only the charts and data you want. The result is a perfectly tailored application ready to roll out to your workgroup. And because the application is in Excel, the training required for users is minimal.
DecisionTools Suite 6: What's New, Useful Tips and Known Unknowns 11:15 – 12:00 Company: Palisade Corporation Presenter: Doug Oldfield This presentation will take a look at some of the new features in the latest releases of @RISK and the DecisionTools Suite. Some of the lesser-known corners of the software will also be explored, along with some useful hints and tips to make risk modelling even easier.
Introduction to TopRank & PrecisionTree 12:00 – 12:45 Company: Palisade Corporation Presenter: Sarah Sherry TopRank performs automated “what if” sensitivity analysis on Microsoft Excel spreadsheets. This means that you can easily find the order of importance of all input factors which affect your bottom line or output, as well as being able to easily audit anyone else’s models. PrecisionTree is a powerful visual and analytical tool for mapping out complex, sequential decisions using decision trees directly in Excel. Using nodes, branches, and probabilities, you can represent and organize decisions ranging from oil prospecting to site development to options analysis. This presentation combines an introduction to the TopRank and PrecisionTree interface with a demonstration of how both tools can be used to analyse various problems in decision analysis.
Palisade Custom Development has written applications for cost estimation, asset management, retirement planning, oil and gas prospecting, and more — all utilizing @RISK technology in Excel. In this presentation, we will cover as many examples of custom applications as time allows.
Introduction to Project Risk Management using @RISK 6 2:30 – 3:15 Company: Palisade Corporation Presenter: Dr Javier Ordóñez The aim of this seminar is to provide a basic understanding of how the new @RISK 6 can help you manage uncertainty in your Microsoft Project schedules. Using Monte Carlo simulation, you will learn how to account for schedule and costs risks in a quick and comprehensive way. At last, here is a way to answer the question “What is the probability that my project will come in on time and within budget?” And with new version 6, risk modeling of your Project schedules is much more flexible and powerful than ever before. We will show you how to set up and run simulations, and how to interpret the results. You will learn how to use @RISK step-bystep, and become familiar with basic concepts and terminology. We’ll demonstrate powerful graphing and reporting that pinpoints where your risks lie and what their impact may be. You will see how using @RISK for your projects enables you to: ∙ Calculate the probability of success ∙ Graph the margin of error around the most likely outcome ∙ Quantify and prioritize the risk drivers ∙ Quantify the amount ‘@RISK’
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