Tuesday, November 13, 2018

Summary of Findings: Monte Carlo Simulation (4 out of 5 Stars)


Note: This post represents the synthesis of the thoughts, procedures and experiences of others as represented in the articles read in advance (see previous posts) and the discussion among the students and instructor during the Advanced Analytic Techniques class at Mercyhurst University in November 2018 regarding Monte Carlo Simulation as an Analytic Technique, specifically. This technique was evaluated based on its overall validity, simplicity, flexibility and its ability to effectively use unstructured data.

Description:
Monte Carlo Simulation is arguably both a method and a modifier by which analysts can pull together pieces of information in the form of ranges and, through random sampling of those ranges, produce an estimate. It is a highly flexible method due to its ability to handle uncertain data from virtually any discipline. The mental modeling required to piece apart the given problem decreases the simplicity of the method, but plugging in the ranges themselves is simple indeed. Monte Carlo Simulations have the capacity to produce a highly accurate distribution of estimates.

Strengths:
  1. Applicable with simple ranges (exact numbers not required)
  2. Increases confidence in estimate through statistical analysis
  3. Simulations produce a visual statistical distribution  
  4. Allows analyst to identify collection needs to improve estimate
  5. Allows analyst to create an estimate with uncertain data

Weaknesses:  
  1. Qualitative estimates require coding
  2. Statistical data can be misleading
  3. The result of a MC simulation is a numeric range, which is almost never where the analysis itself will stop
  4. Challenging to explain to decision-makers

How-To:
  1. Identify the variables that are needed to answer the question (See Application of Technique)
    1. Can be ranges or exact numbers
  1. Enter the variables into a software program capable of running a Monte Carlo simulation (Guesstimate, Microsoft Excel, @RISK, etc.)
  2. Multiply average outputs of simulations together to produce estimate
  3. Continue adding variables and running simulations until question is answered

Application of Technique: 


Utilizing www.getguesstimate.com we presented the group with a question, “How many Big Mac’s will McDonald’s sell at locations in Erie in a week?”.  The group then created a model to determine the number of Big Mac’s sold.  The group developed a series of questions with estimate ranges to answer each question.  Pictured below is the model the group created to work through the question.  The arrows connecting boxes within the model indicate that a formula was used in order to produce an answer in the form of a range of possible outcomes (i.e. 4.9 McDonald’s in Erie * 400 customers per day = 2000 people visiting McDonald’s in Erie per day)


For Further Information:
  1. Get Guesstimate


15 comments:

  1. There is a severe error in methodology related to nomenclature in the How-To section (step 1, step 2, etc.)

    Step 1 is listed twice. I now find myself questioning the validity of the entire article.

    ReplyDelete
  2. I know it’s okay to have differing opinions, and I won’t unfollow someone because we disagree a few times. But I love blogs that mostly agree with my thoughts on books. That’s just because I don’t want to read about someone bashing a book that I adored, or praising a book that I despised. It puts me off! If it happens once in a blue moon, no biggie. But if we constantly have differing opinions, I just can’t click with the blog!
    escorte gatineau
    ottawa escort agency
    ottawa escort agencies
    Punggol Escorts
    Sengkang Escorts
    Serangoon Escorts
    http://www.yoursecretdesires.net

    ReplyDelete
  3. Thanks for the article. What type of comment is most useful? For example bilbochoice.org is website about truck accident lawyers in Houston and rest of Texas, what is most effective comment to leave? Thanks!
    Belapur Call Girls Service
    Kharghar Call Girls Service
    Russian Call Girls Service in Mumbai
    Model Call Girls Service in Mumbai
    Housewife Call Girls Service in Mumbai
    High Class Call Girls Service in Mumbai
    Cheap Rate Call Girls in Mumbai

    ReplyDelete
  4. Nice post dude. I have one question. On most of the blogs I have noticed people instead of commenting with their name, they use blog name.
    Housewife Escorts Service in Delhi
    Busty Escorts Service in Delhi
    High Class Escorts Service in Delhi
    Model Escorts Service in Delhi
    Punjabi Escorts Service in Delhi
    Slim Escorts Girls Service in Delhi
    _____$$$$_________$$$$
    ___$$$$$$$$_____$$$$$$$$
    _$$$$$$$$$$$$_$$$$$$$$$$$$
    ___$Independent Escorts Delhi$
    ___$$Cheap Rate Delhi Escorts$
    ___$$$$$$Delhi Escorts Photos$
    _$$$$$$$Delhi Escorts$$$$$$$$
    __$$$$$$$$$$$$$$$$$$$$$$$
    __$$Call Girls in Delhi$$$$$$
    ____$$$$$$$$$$$$$$$$$$
    _______$$$$$$$$$$$$$
    __________$$$$$$$
    ____________$$$

    ReplyDelete
  5. Thank you so much for this nice information. Hope so many people will get aware of this and useful as well. And please keep update like this.

    Text Analytics Tool

    Data Analytics Solutions

    ReplyDelete
  6. Very interesting article. But I am not sure how much it helps to build up traffic to our blog
    Mumbai Call Girls▐ ▶
    Vile Parle Call Girls▐ ▶
    Sakinaka Call Girls▐ ▶
    Navi Mumbai Call Girls▐ ▶
    Kharghar Call Girls▐ ▶
    Chembur Call Girls▐ ▶
    Belapur Call Girls▐ ▶
    Andheri Call Girls▐ ▶
    Bandra Call Girls▐ ▶
    Borivali Call Girls▐ ▶

    ReplyDelete
  7. The post is absolutely fantastic! Lots of great information and inspiration both of which we all need! Also like to admire the time and effort you put into your blog.
    most popular social media
    best social media sites
    best social networking apps

    ReplyDelete
  8. Our Hyderabad Female escort girl you book through us feels the same as your girlfriend because she casually appears in front of you with impressive looks, which attracts you. The girl talks and behaves with you like a friend there you can quickly get into her closeness and explore your way of entering the erotic world. In that kind of a scenario will suggest some things you may implement at that time. Follow us:-

    Female Escorts Hyderabad
    Hyderabad Escorts
    Hyderabad call girls
    Call Girls in Hyderabad
    Escorts in Hyderabad,
    Hyderabad Escorts Agency
    Hyderabad Independent Escorts
    Independent Hyderabad Escorts

    VIP Escorts in Hyderabad

    ReplyDelete