SIMULATION USING CRYSTAL BALL

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SIMULATION USING CRYSTAL BALL
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WHAT CRYSTAL BALL DOES?

• Crystal ball extends the forecasting
  capabilities of spreadsheet model and provide the
  information that needs to become a more accurate,
  efficient, and confident decision maker. There
  are two main limitations in any spreadsheet
  analysis
• You can change only one spreadsheet cell at a
  time. As a result, exploring the entire range of
  possible outcomes is next to impossible you
  cannot determine the amount of risk that impacts.
• What if analysis always results in single-point
  estimates which do not indicate the likelihood of
  achieving any particular outcome. While single
  point estimate might tell you what is possible,
  but not what is probable.

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• Crystal ball overcomes both of these limitations
• We can describe a range of possible values for
  each uncertain cell in the spread sheet.
  Everything that is known about each assumption is
  expressed all at a once.
• Using the process called Monte Carlo Simulation,
  crystal ball displays results in a forecast chart
  that shows the entire range of possible outcome
  and the likelihood of achieving each of them.

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CRYSTAL BALL TOOLS

• Crystal ball tools are Visual Basic Program that
  extends the functionality of the program. They
  are
• Batch Fit Automatically fits selected
  continuous probability distributions to multiple
  data series.
• Bootstrap - Address the reliability and accuracy
  of forecast statistics.
• Correlation Matrix Tool Rapidly defines and
  automates correlations of assumptions.

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• Decision Table Evaluates the effects of
  alternate decisions in a simulation model.
• Tornado Chart individually analyzes the impact
  of each model variable on a target outcome.
• Two dimensional Simulation Independently
  addresses uncertainty and variability using two
  dimensional simulation.

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Correlation Matrix Tool

• When the values of two variables depend on each
  other in any way, then it is to be correlated in
  order to increase the accuracy of the simulation
  forecast results.
• There are two types of correlations
• Positive correlations Indicates that two
  assumptions increases or decreases together.
• Negative correlations Indicates that an increase
  in one assumption results in a decrease in the
  other assumption.

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