<style type="text/css"> p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px 'Helvetica Neue'; color: #454545} </style>I’m trying to create a Monte Carlo simulation using Excel for an engineering project management situation.
I have 100 or so project risks that threaten my project. Each one of these risks is quantified in dollars (that I know).
I would like to run a simulation in which I randomize the sum total amount of risks that have occurred and then repeat this 10K times.
To clarify this, let’s take a simple example in which I have only three risks to my project. The exposure of Risk A happening is $100; i.e., I will incur a $100 cost if this risk is realized. The exposure of Risk B is $500. And risk exposure of Risk C is $1000.
I can randomize the occurrence of each of these risks and add them up. For instance, Risk A might not occur, Risk B does, and Risk C also does. This scenario would result is a cost of $0+$500+$1000 = $1000.
Another scenario might have Risk A and B happen, but not C, which would cost me $100+$500+0=$600. Or all three occur ($1600). Or none ($0).
To keep things simple, let's assume that a risk has a 50:50 chance of occuring.
I want to set up a simulation that repeats this 10K times. I would then be able to create histograms and distribution curves to explore my probability exposure of risk.
How would I set this up?
I know I can do something like create a random number between 0-1, and if the number is less than 0.5 the risk value gets added to a sum total cell, and if it’s greater than 0.5 it wouldn’t be added. I can do this for all 100 risks relatively easy.
But then how do I repeat this 10K times?
Any and all help would be greatly appreciated!
Cheers!
I have 100 or so project risks that threaten my project. Each one of these risks is quantified in dollars (that I know).
I would like to run a simulation in which I randomize the sum total amount of risks that have occurred and then repeat this 10K times.
To clarify this, let’s take a simple example in which I have only three risks to my project. The exposure of Risk A happening is $100; i.e., I will incur a $100 cost if this risk is realized. The exposure of Risk B is $500. And risk exposure of Risk C is $1000.
I can randomize the occurrence of each of these risks and add them up. For instance, Risk A might not occur, Risk B does, and Risk C also does. This scenario would result is a cost of $0+$500+$1000 = $1000.
Another scenario might have Risk A and B happen, but not C, which would cost me $100+$500+0=$600. Or all three occur ($1600). Or none ($0).
To keep things simple, let's assume that a risk has a 50:50 chance of occuring.
I want to set up a simulation that repeats this 10K times. I would then be able to create histograms and distribution curves to explore my probability exposure of risk.
How would I set this up?
I know I can do something like create a random number between 0-1, and if the number is less than 0.5 the risk value gets added to a sum total cell, and if it’s greater than 0.5 it wouldn’t be added. I can do this for all 100 risks relatively easy.
But then how do I repeat this 10K times?
Any and all help would be greatly appreciated!
Cheers!
