MONTE CARLO TECHNIQUES

FOR ENTREPRENEURS
ENTR20000 – Forecasting Techniques That
Work
Maymester 2009
By Hank Feeser
BACKGROUND: MONTE CARLO

•Named after & why

Entrepreneurs
Monte Carlo Techniques For
•Simple explanation of how works

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TRIANGULAR DISTRIBUTIONS
 What are they
 Why applicable to many situations

Entrepreneurs
Monte Carlo Techniques For
 How defined
 Lowest
 MostLikely
 Maximum

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 Monte Carlo Techniques For
Entrepreneurs
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EXCEL ADDINS:
RISKSIM BY THE #S
 Bring up Excel
 Either open RiskSim/Have Installed

Entrepreneurs
Monte Carlo Techniques For
 F(x)[function tab] -> Insert Function
 Select “User Defined” then
RANDTRIANGULAR
 Enter Min, Most Likely, Max cell (A1)
 Move cursor cell (B1)
 Tools -> Risk Simulation -> One Output
 Output Formula Cell enter (A1)
 Number of Trials -> 3000
 Click -> Simulate 5

 Look @ RiskSim Cumulative Chart

 Monte Carlo Techniques For
Entrepreneurs
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NOW LET’S DO IT