Monte Carlo Analysis Tutorial

When to use this tool

Use Monte Carlo Analysis to approximate the probability distribution of different outcomes or to evaluate the performance of proposed process changes by running hundreds of trial runs, or simulations, using the distributions of input variables to demonstrate random behavior (along some distribution). It helps to understand the impact of risk and uncertainty in varied kinds of forecasting models.

The objective of the simulation is to understand the possible range of outcomes for the outputs of the models corresponding to changes in the model input parameters.

How to use this tool in EngineRoom

Drag the tool on to the workspace > In each step of the process, enter the required information about the model, inputs, and the output > Click 'Next' at the end of each step to proceed to the next step in the process > In the final step, click 'Finish' to run the analysis > Once the output is shown, first click 'Save the Model' to ensure you can return to this particular model at a later time (otherwise the model will be discarded and you will have to start from scratch the next time).

An example of a Monte Carlo Analysis output is shown below:

Settings:

Output:

Tutorial