Keywords
Citation
Dixon, T. (1998), "Simulation Modeling Using @RISK", Journal of Property Valuation and Investment, Vol. 16 No. 3, pp. 347-348. https://doi.org/10.1108/jpvi.1998.16.3.347.4
Publisher
:Emerald Group Publishing Limited
Designed to show how Monte Carlo simulation can be used to model and solve problems in finance, operations and marketing, this book is very much tied into the @RISK program and is available either with full software or demonstration software. Winston is Professor of Decision and Information Systems in the School of Business at Indiana University in Bloomington.
In the words of the author, Simulation Modeling Using @RISK “introduces MBAs and advanced undergraduates to spreadsheet business simulation models”. The book is designed around chapters which contain virtually self‐contained discussions of business models that can be run within @RISK. Examples of these include:
• corporate financial planning;
• project management;
• stock prices and options;
• managing interest rate risk;
• hedging with futures; and
• inventing and querying models.
More than 100 examples were included on the accompanying disk, which was easy to install and set up for use with @RISK.
Chapters 1 to 8 make essential reading for anyone picking up the book for the first time. Winston introduces the subject well by explaining the fundamentals of simulation and random numbers. Nonetheless, a certain level of knowledge is assumed, and readers new to the subject would be better advised to take up some of the background material which is well‐referenced at the end of each chapter. Chapters 4 and 5 introduces the @RISK program and its capabilities before explaining a simple NPV model to compare investment projects. The 16 chapters which follow explore various applications and examples.
The examples and the book as a whole is well laid out and the models are explained clearly in both 1‐2‐3 and Excel format. Readers will require access to @RISK to benefit fully, but as recommended reading for postgraduate real estate‐oriented courses and for investment analysis in practice, the book has much to commend it, through its use of varied and interesting examples.