Depletion Calculation

See also: ModelRisk functions and windows, Vose Ruin

Introduction

The Depletion Calculation window from ModelRisk

With the Depletion Calculation window you can model the depletion of resources by a given time horizon.

This is modeled with costs of variable amount (Claim size distribution) occurring randomly in time (Claim interval distribution).

If the resources are depleted before the set time horizon, the shortfall (i.e. additional sources needed to pay the last incoming payment event) is calculated as well.

The output of this calculation consists of three parts:

• The time until depletion (if it occurs).

• A TRUE/FALSE flag, answering the question "does depletion occur before the set time horizon".

• The shortfall (if it occurs).

To see the output functions of this window, click here.

Window elements

In the Source data region, four parameters can be specified.

In the ClaimInterval field, the Distribution Object to model the time interval between payment events can be specified. Typically (and by default), this is an exponential distribution.

In the ClaimSize field, the Distribution Object to model the size of payments can be specified. By default this is a lognormal distribution.

three outputs are shown, as they are under this generated scenario:

• DepletionTime - the time until the resources are depleted, if they are before the time horizon. If the resources are not depleted before the time horizon, -1 is returned.

• DepletionFlag - a boolean variable (TRUE/FALSE) that returns whether or not the resources are depleted before the time horizon.

• DepletionShortfall - the shortfall (i.e. the extra amount of resources that would be needed to complete the final payment)

These outputs will be inserted as a 3x2 array in the spreadsheet, upon pressing OK.