This sample sheet shows example of random number generation and Monte Carlo simulation. This worksheet runs a macro to do this work that can be adjusted for 1000 repetitions or for 10000 repetitions. RANDOM() function is used as base.
To simulate a Monte Carlo situation for cost risk one has to look on the factors or parameters that have uncertainty associated with them, then find the distributions that are to be used for every one of them. Now create a cost model related to the the factors to a final cost. Place a random number generator and then replace fixed cost
with associated distributions. Now correlate costs, run simulation,sort the results and chart it.
Here is another example in which risk is calculated in case business don’t save enough to justify the lease. Much easier way and runs without any macro using random function.
Development risk calculating sheet. Discounted cash flow of development along with probabilistic analysis of the development. A graph showing possible NPV. (This sheet runs excel Add ins)
We are sharing free monte carlo excel add ins. No expiration, no trial based software. Give them a try. Might be these are what you are looking for.
- SimulAr : Developed in Argentina this software allows user to analyze and evaluate risk associated with decisions making.It is a complement of ms excel. I would certainly recommend it . Don’t forget to download the user manual pdf for better understanding. All the download
- SIMTOOLS : This tool will add statistical functions for risk analysis in worksheet.You have to download SIMTOOLS.XLA this will add three macro procedures to the tools menu. First is simulation table,Iterative process and last combine rows. Download here
- MonteCarlito 1.10 : You have to follow the instructions to make it work. This tool is equipped with certain features like Statistical analysis: mean, median, standard error, variance, skewness, kurtosis along with charting features.
- Yasai : simple tool for this purpose. Developed at MSIS Department of Rutgers Business School. Would be great for beginners as it was designed for teaching elementary process.
- AHP model with M-C : This software is available on github. Find it here.