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The Basics of Risk Analysis in the Enterprise

Sean Salleh 19 Jun 2013 Risk and uncertainty

Risky business – bad news? Not necessarily. While the word risk has a negative connotation for some, it’s a source of business opportunity for others. Good risk analysis and follow-on enterprise risk management (ERM) consider both the upside and...

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The role of Sensitivity Analysis in Energy and Environmental Modeling

Sean Salleh 18 Jun 2013 Energy and environment

Energy and environmental models are often complex. Sensitivity analysis is a natural choice to improve understanding of such models and to see which input parameters have the most influence on the output. It also helps analysts to understand the inner...

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Data Modeling 101

Sean Salleh 17 Jun 2013 Modeling methods

Think data modeling is just for the geeks? Think again! Even if deep down in the IT layers data models can make Egyptian hieroglyphs look like a Dr. Seuss book by comparison (like ‘The Cat in the Hat’ –...

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Making Management Enthusiastic about Decision Support Software

Sean Salleh 14 Jun 2013 Modeling methods

If extensions to your business modeling activities depend on convincing upper management of the utility of business decision support software, then a few ‘selling’ tips may help. It’s rather like being a good car salesperson. To sell a...

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Operational Risk Scenario Analysis and the Bullwhip Effect

Sean Salleh 13 Jun 2013 Risk and uncertainty

If you’ve ever experienced a small change at the retailing end of a supply chain that provokes massive turbulence upstream, there’s a good chance you’ve suffered the bullwhip effect. When somebody cracks a bullwhip, a small wrist...

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Finding Out What You Don’t Know With Sensitivity Analysis

Sean Salleh 12 Jun 2013 Modeling methods

Remember Donald Rumsfeld’s speech from 2007 on the things we know and the things we don’t? His enumeration of known knowns, known unknowns and unknown unknowns garnered ratings from trivial to deeply meaningful. Fishing for truth in such murky...

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Deterministic or Stochastic - Which Business Modeling Should You Present?

Sean Salleh 11 Jun 2013 Modeling methods

Aaah… if only someone had written a program to automatically choose the type of modeling for any given business situation. Perhaps somebody has and it is buried somewhere in those 1 million (and counting!) apps already available for smartphones. After all,...

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5 Mistakes to Avoid if You Want to Make Good Quantitative Risk Assessments

Sean Salleh 10 Jun 2013 Risk and uncertainty

Numbers don’t lie. It’s the people using them that are responsible for falsehoods, distortions, or simply mistakes! Yet numbers have several attractions: you can compare them (as long as you’re comparing ‘apples with apples’, set objectives,...

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Business Modeling Needs More than Spreadsheet Dinosaurs

Sean Salleh 07 Jun 2013 Modeling methods

Huge body, tiny brain. Those were prominent characteristics of dinosaurs and part of their DNA. Those that were unable to cope with changes died out, although they had a good run – about 180 million years, all told. Information technology has...

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Estimation of Mutual Information

Lonnie Chrisman 31 May 2013 Analytics and OR, Risk and uncertainty

Abstract: This article explores the difficult problem of estimating the mutual information between two variables from a sample of data. I use examples to demonstrate the challenges, and introduce a new algorithm for estimating mutual information along with an explicit...

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