/> The Benefit of Using Simulation vs. Calculating Expected Values
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The Benefit of Using Simulation vs. Calculating Expected Values

This slide highlights the benefit of using simulation rather than just calculating expected values;

If your goal is to reach 3B in sales by 2030, how do you know if you are getting close? If you do not use uncertainty and simulation, you can add together the risk-adjusted revenue forecasts for each asset in the portfolio. This calculation would provide a time series that follows the black line in the boxes in the picture. What it tells you is that 3B is out of your reach.

However, if you use simulations and include uncertainty to generate many more potential outcomes, you can see that 3B is within reach, although unlikely. You can quantify the risk of not reaching the target and investigate the requirements to achieve it. These analytics give us actionable insights to work proactively to reach our goals.

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