Can someone help me out with a Decision modelling case. We have to use palisades software such as @Risk and Precision Tree. Ive done the problem but having trouble with sensitivity analysis
I can Help you JOe,if you help me!:P
Sure, I'd be happy to help you with your sensitivity analysis. Sensitivity analysis is a technique used to determine how the uncertainty or variation in input values of a decision model affects the output or decision outcome. It is an important step in decision modeling as it helps to identify critical variables, assess their impact on the decision, and understand the robustness of the decision model.
To perform sensitivity analysis using Palisade's software like @Risk and Precision Tree, you can follow these general steps:
1. Define the decision model: Ensure that your decision model is properly defined and all input variables, decision nodes, and output measures are included.
2. Run the Monte Carlo simulation: Monte Carlo simulation is a technique used to generate random values for the input variables based on their specified probability distributions. Run the simulation multiple times to create a range of possible outcomes.
3. Analyze simulation results: Once the simulation is complete, you can analyze the results to understand the distribution of the output measures and any potential trends or patterns.
4. Identify critical variables: Identify which input variables have the most significant impact on the output measures. Palisade's software provides sensitivity analysis tools that can help you determine this, such as tornado diagrams or correlation matrices.
5. Perform sensitivity analysis: Once you have identified the critical variables, you can analyze their sensitivity by varying their values within a predefined range. This helps you understand how changes in these variables affect the output measures and the overall decision.
To perform sensitivity analysis using @Risk, you can use the @Risk Sensitivity Analysis tool. This tool allows you to perform one-way sensitivity analysis, tornado diagrams, scenario analysis, and even define custom sensitivity measures. You can access this tool through the @Risk menu in Microsoft Excel.
For sensitivity analysis using Precision Tree, you can use the Sensitivity Analysis tool. This tool allows you to vary the probabilities or values of input nodes and see how the decision outcomes change. You can access this tool through the Precision Tree menu in Microsoft Excel.
By following these steps and utilizing the sensitivity analysis tools provided by Palisade's software, you should be able to analyze the sensitivity of your decision model and gain insights into the impact of different variables on your decision outcomes.
Now, how can I help you?