Preconference Tutorial: Risk Modeling and Optimization using Simulation


Pankaj Dutta
Shailesh J. Mehta School of Management, IIT Bombay
This session introduces you to the risk modeling and simulation of business problems. After providing a brief concept of various decision models in management with examples pertaining to different domains, risk analysis would be carried out in the context of business simulation using advanced excel spreadsheet. @Risk software would be used to illustrate the business problems under risk and subsequent statistical analysis would be drawn to address various real world business problems.

Generally, optimization models ignore uncertainty but Risk optimizer helps to find risk associated with each strategy; accordingly we can seek out strategies that will help to minimize risks while achieving desired goals. It uses the Monte Carlo Simulation, which is one of the widely used techniques by corporate managers and scientists as an aid for decision making and performance analysis.