Mitigate Risks

Optimization with Monte Carlo Simulation in Excel With RISKOptimizer

Solve optimization problems by using genetic algorithms or OptQuest methods, along with Monte Carlo simulation, with Lumivero’s RISKOptimizer. This tool tries different combinations of adjustable cells to achieve your goal while running Monte Carlo simulations on each trial solution to account for inherent uncertainty. The result is the most robust, accurate solution possible.

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Solve Complex Allocation Problems involving Uncertain Variables

Wouldn’t you like to know the best allocation of your limited resources to maximize your profits? Or the most efficient schedule to minimize costs? But what about the uncertainty inherent in sales projections, returns from individual investments, or production costs?

Traditional optimization methods ignore this uncertainty, a very risky approach. RISKOptimizer tells you not only the best combination of inputs to use, but the risk associated with each strategy. You can seek out strategies that enable you to minimize your risks while achieving your goals.

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What is RISKOptimizer?

RISKOptimizer combines the Monte Carlo simulation technology of @RISK, Lumivero's risk analysis add-in, with the latest solving technology to allow the optimization of Excel spreadsheet models that contain uncertain values. Take any optimization problem and replace uncertain values with @RISK probability distribution functions that represent a range of possible values. For each trial solution RISKOptimizer tries during optimization, it runs a Monte Carlo simulation, finding the combination of adjustable cells that provides the best simulation results.

Works with Microsoft Excel

Optimize Tough Problems under Uncertainty

Compare Different Solutions

Communicate Results and Data with Others

Monitor Optimization Progress with RISKOptimizer Watcher

Learn about Optimization Learn About Monte Carlo Simulation

How RISKOptimizer Is Used

RISKOptimizer has a multitude of applications, including:

Investment Planning & Portfolio Optimization
Optimize and simulate multiple portfolio assets (such as stocks, bonds, real estate, or projects) to maximize return while minimizing risk. Perform efficient frontier analysis to identify the best portfolio for a given level of risk.

Supply Chain Management
Optimize multiple suppliers to minimize failure points and maximize probability of deliveries, while simulating uncertain risk factors.

Inventory & Capacity Planning
Manage inventory more effectively, improve capacity planning, and schedule workforces and equipment use more efficiently - all while simulating risk factors such as customer demand and worker productivity.

Capital Reserves
Probabilistically forecast and optimize different reserves levels subject to uncertain demands on capital.

Product and Pricing Mix
Identify the optimal product mix offering and price points to maximize sales subject to uncertainties around demand, production, or other factors.

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Industries using @RISKOptimizer

Energy & Utilities

Insurance & Reinsurance

Finance & Banking

Manufacturing & Consumer Goods

Construction & Engineering

Aerospace & Defence

Key Features

Optimization Under Uncertainty

By running Monte Carlo simulations to account for uncertain conditions, RISKOptimizer provides the best possible solutions to your allocation, budgeting, and scheduling problems.

100% Microsoft Excel Integration

RISKOptimizer integrates seamlessly with Excel, adding a host of new, native functions that enable you to work in a familiar environment. Furthermore, the Excel integration ensures that the integrity of your modeling logic remains intact, for the most accurate results.

Graphs and Reports

RISKOptimizer analyses are robust, and come with easy-to-understand graphs and reports to enable you to communicate complex results to other stakeholders intuitively. This helps focus discussions on how to make the most of the insights gained.

Follow up from @RISK

Once you have defined uncertain variables and set up Monte Carlo simulation in an @RISK model, you can easily adapt the same model to use RISKOptimizer as a logical next step. Simply tell RISKOptimizer which variables are controllable, and it will optimize your model utilizing the existing @RISK functions already present.

Advanced Solving Engines

RISKOptimizer includes algorithms well-suite for both linear (simpler) and non-linear (more complex) problems. The OptQuest engine integrates a variety of methods into a single composite powerhouse, and the genetic algorithm engine is proven to find the best global solution to more complex, real-life problems.

Feature	Benefit	Professional Edition	Industrial Edition
Optimization under uncertainty	Combines Monte Carlo simulation with sophisticated optimization techniques to find optimal solutions to uncertain problems. Used for budgeting, allocation, scheduling, and more.
Efficient Frontier Analysis	Especially useful in financial analysis, Efficient Frontiers determine the optimal return that can be expected from a portfolio at a given level of risk
Ranges for adjustable cells and constraints	Streamlined model setup and editing
Genetic algorithms	Find the best global solution while avoiding getting caught in local, “hill-climbing” solutions
Six solving methods, including GAs and OptQuest	Always have the best method for different types of problems
RISKOptimizer Watcher and Convergence Monitoring	Monitor progress toward best solutions in real time
Overlay of Optimized vs Original Distribution	Compare original output to optimized result to visually see improvements
Original, Best, Last model updating	Instantly see the effects of three solutions on your entire model

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Included with The DecisionTools Suite

The complete risk and decision analysis toolkit, including @RISK, PrecisionTree, NeuralTools, StatTools, Evolver, RISKOptimizer, and ScheduleRiskAnalysis.

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