Error checking: View random scenarios on screen and check for credibility

See also: Checking model behavior introduction, Model design introduction, Model Validation introduction

In ModelRisk all simulation functions return random values inside Excel. Thus, by repeatedly hitting the F9 (spreadsheet recalculation) key, you will see how the model behaves on-screen when random scenarios are being generated. You can often make your review more effective by adding some test cells: for example, set up a cell that calculates the maximum (or minimum, etc) of an array to make sure no cell in that array produces any crazy numbers.

Imbedded graphs

We have found imbedding graphs of time series forecasts to be a particularly effective way to demonstrate that the model is producing reasonable numbers. Randomly recalculating the spreadsheet shows any trend, seasonality, range, etc. so the client may not understand all the technical detail behind the formulae, but s/he can readily appreciate the result.

Read on: Split up complex formulas (megaformulas)



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