Potential Loss Quantification

Case Study #1:

Dice Throw Simulation

This exercise is to allow users to repeatedly simulate the counting of sum of each dice
throw. Each dice represents a risk occurrence, which has a range of possible
outcomes (in this case, 1-6). The number of dice will be varied to strengthen the idea
of a variety of risk outcomes.
This takes the standard classroom example of dice throwing and offers the ability to
understand the distributions of dice throws via Monte Carlo simulation, and explore
how it can be used to model risk.

We will construct the experiment first with 2 dice, followed by 10 dice and 20 dice.

Assumptions made:
 Dice are not flawed (same probability of hitting 1,2,3,4,5,6)
 Tracked forecast: Sum of each Dice Throw

Referring to the steps below, it is your task to apply Crystal Ball software to create
the model and report your analysis.

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Dice throw simulation

1. We will be using 2 cells to model the throwing of 2 Dice.

First, select the first cell, C12, and select the Crystal Ball tab and click on Define Assumption.
A number of different distributions will appear. We will use the Discrete Uniform distribution
to model a dice throw. Set the value in Minimum to 1, and Maximum value to 6. Click OK to
apply.
Apply the same steps above to the cell C13.

2. Once your 2 cells with assumptions have been set, conduct a few simulations.
Click on Step under the Crystal Ball tab.

3. Insert a forecast to track the sum of dice per throw.

Select Cell C33, and sum the 2 dice assumption cells C12 and C13 by inputting the following
formula: [=sum(C12:C13)]

Next select Cell C33 and select Define Forecast (Crystal Ball tab). Name the Forecast “2 Dice
Forecast”. Click OK.

4. Next, we will run a few 2 Dice simulations, followed by numerous simulation times.
In the Crystal Ball “Run” tab, input 10 simulations. Now run a simulation by clicking Start.
View the Forecast by clicking View Charts > Forecast Charts. Select the 2 Dice Forecast and
click OK.
Next, repeat steps using 10,000 simulations. View Forecast Chart.

5. Next we will set up and run the simulation model for both 10 Dice and 20 Dice.
10 Dice: As the Dice simulations have the same probability and values, we can apply the Crystal
Ball Assumptions in Cell C12 to Cells D12-D21 by using Crystal Ball’s Copy and Paste function
(in Define tab).

20 Dice: Apply the same step above to Cells E12-E32.

Create Forecast for 10 Dice and 20 Dice in Cells D33 and E33 respectively, and name the
forecasts accordingly.

Run 10,000 Simulations. View all Forecast Charts.

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Simulation & Analysis

Run the 3 scenarios simulations (2, 10 & 20 Dice) using 10,000 trials.
1.
Set maximum number of trials to 10,000. Start simulation.
After simulations are done, click View Charts and open all Forecast Charts.

Identify the following statistics for the respective simulations:

2.
2 Dice Throw 10 Dice Throw 20 Dice Throw

Min Value

Maximum Value

Mean
(Average value of
dataset)

Median
(Middle point value
of dataset)

Standard
Deviation
(A measure of a data
set’s dispersion from
its mean)

Tip: From the individual 2 Dice, 10 Dice, 20 Dice forecasts, click on View and select Statistics and
also Split View.

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