April 2006

Case Study:
@RISK Used to Model Blood Screening
One of the political goals of the European Union is to achieve a more unified approach to public health regulation and practice. This is particularly true of blood transfusion safety. Dr. Arturo Pereira’s research at the Hospital Clinic in Barcelona, Spain has been directed at the question of how to predict with some assurance the health and economic consequences of blood transfusion procedures.

:: Targeting Hepatitis B
In many parts of the world, increased sophistication in blood donor screening has virtually eliminated the risk of post-transfusion HIV and other serious viral infections. The only significant disease for which transfusions continue to pose a risk is from the hepatitis B virus (HBV). The current risk of acquiring this infection through blood transfusion is below 1:75,000 blood units.

:: New Technology vs. Old Standby
In the late 1990s a new technology for detecting HBV, based on nucleic acid testing (NAT), was introduced. It is more sensitive than the current detection method, known as HBsAg assays, though considerably more expensive. Because the risk of transfusion-transmitted HBV infection is already very low, and the infection is usually mild and self-limited when acquired in adult life, concern arose about the fairness of allocating resources to NAT at the expense of diverting them from other health care priorities.

:: Effects on Health – and Budgets
In 2001, Dr. Pereira began research into the question: how will improved donor screening for hepatitis B affect health outcomes and medical costs across the EU? In the course of three studies, Dr. Pereira was able to increase the sophistication of his modelling procedure to better mimic real-world health and economic outcomes. According to Dr. Pereira, “Monte Carlo simulation is a procedure that has remarkable capacity to adapt to variation and uncertainty, and to the augmentation of detail. In addition, software allowing Monte Carlo simulation of complex spreadsheet models, in this case @RISK, has simplified the modelling and calculation phases of the study, leaving more time and energy for result analysis and interpretation.”

read the case study
learn more about @RISK

 

Industry Application:
Oil Drilling with the DecisionTools Suite
An oil well is one very expensive hole to drill, and deciding where to drill is a complex decision. Our customers in the oil and gas industry must anticipate the geological composition of a location, its remoteness and harshness of the climate, the productivity of nearby wells, and if the location is undersea, the depth of the water. To further complicate the issue, these uncertainties are often interdependent. As many of these customers have already discovered, to-drill-or-not-to-drill is the kind of decision that is ripe for two tools in our DecisionTools Suite: PrecisionTree teamed with @RISK.

:: Beyond Traditional Analysis
Like many real-life dilemmas, a drilling decision is really a series of decisions, each involving uncertainty. Conventional decision trees define chance events in terms of discrete values and describe the decision path in terms of those values. Like these conventional tools, PrecisionTree shows the prospector the points at which some choice must be made, the nodes at which the decision tree branches. However, @RISK allows engineers to go beyond traditional decision trees. At each node where the choice depends on uncertain values, @RISK allows the prospector to substitute a distribution function for the expected value.

This means that rather than producing a decision path based on expected values, PrecisionTree will use a sample from each distribution function along the decision path to generate a continuous distribution of all possible outcomes of a particular course of action. The prospector can choose to simulate the decision according to the “Expected Values of the Model,” which shows the prospector the likelihood of the expected values occurring, or according to the “Values of one sampled path through the Model,” which generates the range of possible values of the model and their relative likelihood of occurring.

:: A Consistent Approach
To avoid a situation where the value of the model—and hence the drill-or-no-drill based on it—changes with each simulation run, PrecisionTree gives the prospector a way to optimise the decision path. If the prospector chooses “Decision Follow Current Optimal Path” before running an @RISK simulation, PrecisionTree will force the selection of the best choice at each successive decision node. This gives the prospector the best of both worlds: a result that takes all possibilities into account and is consistent in its implications.

read oil and gas case studies
learn more about DecisionTools Suite

 

Product Spotlight:
StatTools
Are you looking for a powerful general purpose statistics package that doesn’t require you to learn a whole new interface? Look no further than StatTools.

StatTools is the advanced statistical analysis add-in to Microsoft Excel from Palisade. StatTools gives Excel a new, powerful statistics toolset. StatTools replaces Excel's built-in statistics with its own calculations, and allows you to work in the familiar Microsoft Office environment. StatTools brings you the best of both worlds: Microsoft Office ease-of-use, and robust statistical power.

:: No More Excel Stats
The accuracy of Excel's built-in statistics calculations has often been questioned, so StatTools doesn’t use them! Even Excel's worksheet statistics functions - such as AVERAGE - are replaced by new, robust StatTools versions - such as StatMean(). StatTools calculations meet the highest tests for accuracy, with performance optimised through the use of C++ .DLLs, not macro calculations.

:: Native Excel Reporting
Excel is great for reports and graphs, and StatTools makes the most of this when creating your statistics reports. StatTools uses Excel-format graphs, which can be easily customised with new colours, fonts and added text. Report titles, number formats and text can be changed as you do in Excel. You can even take your reports from Excel into other applications.

:: Write Your Own Statistical Procedures
StatTools Pro includes a complete, object-oriented, programming interface. Custom statistical procedures may be added using Excel's built-in VBA programming language. Utilise StatTools's built-in data management, charting and reporting tools. Your custom procedures can even be
displayed on the StatTools menu for easy access.

:: StatTools Gaining Popularity
Healthcare industry consultant Barbara Tawney needed help. “I was looking for a user-friendly way to do autocorrelation, and a colleague recommended StatTools to me.” She created time series for patient load data of the entire Richmond, Virginia hospital system. As Tawney observes, “StatTools does the time series autocorrelation in a user-friendly way that is quick and easy. You know you got it right the first time. I have box plots and other statistics that I did with it, and they were easy to refine for publication. StatTools did what I needed without the time and expense of a heavy-duty stats package.”

learn more about StatTools

 

Palisade User Conference continued from above



The topic of risk is more relevant now than ever. Businesses and other organisations face risks unimaginable even ten years ago. The 2006 Palisade User Conference: Europe will show delegates how to manage risk using best practices and user-friendly, cost-effective software that integrates into existing modelling frameworks. Managers, analysts, researchers and others will attend, representing industries such as oil and gas, securities, pharmaceuticals, and insurance.

:: Keynote from a “Cult Lecturer”
The event will take place at the Radisson Edwardian Heathrow, with a keynote address from quantitative finance expert Paul Wilmott. Dr. Wilmott will speak on the use of Monte Carlo simulation and other techniques as they apply to financial analyses. Dr. Wilmott is the author of numerous books and is founder of Wilmott magasine, a leading resource for the financial community. Dr. Wilmott is particularly popular for his ability to present complex subjects in an accessible and often humorous way. The Financial Times called him a “cult derivatives lecturer.”

:: Meet Palisade Engineers
In addition, Palisade’s top software engineers will be on-hand for roundtable discussions. Delegates will be able to provide feedback about Palisade tools and get previews of unreleased software.

learn more about the 2006 Palisade User Conference: Europe

Ask Amy continued from above

Dear H.J.,

Sharing @RISK models is easy. If you wish to share the entire spread-sheet model and allow others to edit it who don’t have @RISK installed, all your users have to do is install the free @RISK Spreadsheet Viewer.

With the Spreadsheet Viewer, distribution function formulas are retained and may be edited or added, but simulations may not be run. Cells display the expected value of a distribution, and calculations are performed accordingly. No distribution graphs, distribution fitting, results reporting, or any other @RISK features are included. It installs in seconds and does not affect the way Excel works.

If you wish to share only @RISK results, you can always export all @RISK charts and graphs directly to Excel spreadsheets, where they are converted to native Excel format and can be modified using all of Excel’s graphing and charting commands. This feature is available with the Graph in Excel command when you right-click over @RISK charts and graphs.

You can also choose to place results directly into Excel during a simulation, eliminating the need to export them from @RISK to Excel. To do this, go to the Report Settings section of @RISK, and check the option to "Generate Excel Reports Selected Below". Then check the boxes next to the reports you want, decide if you would like them placed in a new workbook or the active workbook, and choose whether graphs should be created in Metafile or Native Excel format. Now your @RISK reports will be generated and ready for you to send to other people for viewing in Excel — whether or not they have @RISK on their computer.

free @RISK Spreadsheet Viewer
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