By Peter Coffee, PC Week
March 22, 1999
Often, when PC users see numbers, their first reaction is to open a spreadsheet. Unfortunately, spreadsheets are best at static analysis of exact numbers, while business problem solving calls for predictive analysis of uncertain values.
Products such as Palisade Corp.'s RISKOptimizer 1.0 (see review) are therefore important additions to the spreadsheet programme that's on almost every business PC, namely Microsoft Corp.'s Excel.
A limited knowledge of probability and statistics can lead to poor approximations of uncertainty, such as assuming that a number is well-represented by its average value when the probability curve is actually far from symmetric. For example, a completion time is much more likely to exceed than fall short of its budgeted value. When properly used, products such as RISKOptimizer deter errors of this kind.
Other time-series tools, such as Business Forecast Systems Inc.'s Forecast Pro for Windows or other tools from SPSS Inc., have user inertia working against them. Users often settle for the best results they can get from their habitual tools, and so spreadsheet add-ins such as RISKOptimizer have an advantage in their likelihood of being used.
Related Article in the March 1999 PCWeek:
Pair of Add-ins Extends Excel's Scope
RISKOptimizer Main Page
Book: Financial Models Using Simulation and Optimization
Book: Decision Making Under Uncertainty with RISKOptimizer
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