David F. Yard, project engineer and international consultant, will demonstrate the effectiveness of using Crystal Ball with a simple “quick look” model to simulate hydrocarbon recoveries from a waterflood project.  He will also demonstrate the use of Crystal Ball to identify uncertainties associated with any given project and how to use these uncertainties as a way to minimize project risk.  Finally, Mr. Yard couples the model with other proprietary models to forecast the economic returns of the waterflood project.

> View this recorded Web seminar

NEW TEXTBOOK:
Treasure Chest of Six Sigma Growth Methods, Tools, and Best Practices
By Lynne Hambleton
Published by Prentice Hall PTR, Copyright 2007
Hardbound, 995 pages
ISBN: 0132300214

This reference is the first comprehensive how-to collection of Six Sigma tools, methodologies, and best practices. Leading implementer Lynne Hambleton covers the entire Six Sigma toolset, including more than 70 different tools—ranging from rigorous statistical and quantitative tools, to “softer” techniques. The toolset is organized in an easy-to-use, alphabetical encyclopedia and helps professionals quickly select the right tool, at the right time for every business challenge.

Crystal Ball is included in the Monte Carlo simulation section of the book and in a Portfolio Selection article in the online PDF of related articles. Crystal Ball software is not packaged with this textbook.

> Learn more about this textbook
> Order this textbook from Amazon.com

SUCCESS STORY:
Monte Carlo Simulation in a Malpractice Lawsuit

Calculation of settlements in malpractice lawsuits is often very difficult. One factor that figures predominantly in a settlement is the cost of care until the person reaches the estimated end of their natural life. There are multiple ways of calculating life expectancy, and these differences can result in million-dollar changes in settlements.

Dr. Alastair Muir created a Crystal Ball software simulation model to predict the life table for the plaintiff. Various sources of error-- the reliability of the assessment of the patient--were taken into account and quantified in the model. After Dr. Muir used Crystal Ball to run thousands of Monte Carlo simulations, he was able to calculate the 95% confidence interval for life expectancy for the plaintiff.

The Crystal Ball simulation model provided an unbiased, objective estimate that was judged fair by all parties

> Read the entire success story

WHITE PAPER:
CASH FLOW AT RISK – ELECTRONIC CHIP PRODUCTION
Alan E Gorlick, University of Phoenix
Source: 2007 Crystal Ball User Conference

Profitable volume production of electronic circuitry runs the gauntlet of unique technical and marketplace hurdles, all of
which involve risk and cost. Many design firms choose to manage the process in house, because they believe the costs are deterministic and within budget. In fact, many of those costs require stochastic models. Single point analysis fails to value:

1. Cash flow at risk over a range of scenarios

2. Covariance of cash flows of each new project with existing projects (lack of portfolio effect)

3. Opportunity costs of bearing risk for which they don’t have a comparative advantage

4. Costs imposed by the capital markets for bearing risks they should hedge

Crystal Ball software, in concert with experience driven models, quantifies project and total risk, thereby enabling the user to evaluate various hedging strategies.

> Read the entire white paper

RISK TIP:
How to Use the Custom Distribution in Crystal Ball – The Discrete Uniform Distribution (Tip #1 of 5)

Introduction

The Custom distribution in Crystal Ball is arguably the most versatile, but also one of the most difficult distributions to correctly use within Crystal Ball. In fact, using the Custom distribution, a Crystal Ball software user can construct five different kinds of distributions (see Table below).

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