There is no better way of ‘getting under the skin’ on a problem than to simulate and model it. Excel is an excellent platform for both, and we at The Excel Experts recommend Excel for your next modelling or simulation project. Especially when paired with a Monte Carlo simulation, an Excel spreadsheet can be a simple, and powerful tool for creating just such a model.
As humans, we are not always very good at assessing risks, or the odds of certain events occuring. A model will calculate the impact of the decisions we make (and the uncertainties in the inputs), to assess the outcomes that we care about, such as profit and loss, ROI or environmental impact for instance.
As such, simulations are often used to help companies assess the ‘likelihood of outcomes’ from taking a particular course of action or decision. By traversing all possible decision paths, a simulation can give valuable insight into which course of actions should be taken.
Modelling and simulating in Excel – the advantages
1. Harness Excels mathematical abilities with minimal effort
Save development time. Use VBA and libraries such as NAG to expand on its abilities when necessary.
2. Specialist knowledge on the subject
At The Excel Experts we have specialized expertise, in modelling physical, biological and business systems
3. Analyse Data FAST
Use Excel Pivot tables, Data Models, Formulas and Functions. Then use Excel Macros to push your productivity to the next level.
4. Display your results
Then display and present your new results, in a stunning dashboard report.
5. Connect to data sources with ease
Excel is almost without parallel when it comes to connecting to data sources. If it can’t connect ‘out of the box’ its usually an easy matter to write a data loader for your data.
The kinds of questions our customers ask us.
A Monte Carlo simulation is a mathematical technique conducted on a computer; Which allows us to account for risk in our decision making. In an unpredictable world, such a system can be very useful.
It’s used in many fields of study such as energy, manufacturing and finance as well as project management,transport and environmental, to name a few.
A Monte Carlo simulation thus helps you, the decision-maker, to explore various choices of action, safely and without any real risk.
For each choice of action you explore with the model, you will see a range of possible outcomes, with a predicted likely hood of these outcomes occurring. So you can explore the whole range of possibilities, from conservative ‘hands off,’ through to ‘going for broke.’
Read the definition of a Mathematical model from wikipedia