Category: Corporate risk analysis
You only live once
It can be shown that the ensemble average always will overestimate the growth and thus can falsely lead to wrong conclusions.
View Post
The probability distribution of the bioethanol crush margin
In the following we will illustrate some of the risks the bioethanol producer is facing using corn as feedstock. However, these risks will persist regardless of the feedstock and production process chosen.
View Post
Plans based on average assumptions ……
Don’t worry about the average, worry about how large the variations are, how frequent they occur and why they exists.
Planning under Uncertainty
Let’s say that the board have sketched a future desired state (value of equity) of the company and that you are left to find if it is possible to get there and if so – the road to take.
Uncertainty modeling
We know that forecasts based on average values are on average wrong. In addition will deterministic models miss the important uncertainty dimension that gives both the different risks facing the company and the opportunities they bring forth.
Stochastic Balance Simulation
We know that forecasts based on average values are on average wrong. In addition deterministic models will miss the important dimension of uncertainty – that gives both the different risks facing the company and the opportunities they produce.
The Uncertainty in Forecasting Airport Pax
The uncertainty about the future yearly Pax is quite high. With this as the backcloth for airport planning the stochastic nature of Pax forecasts has to be taken into account when investment decisions are to be made.
A short presentation of S@R
Most companies have some sort of model describing the company’s operations – but…
