What is Monte Carlo Simulation
Monte Carlo simulation is a method for evaluating a deterministic model using sets of random numbers as inputs to determine both the most probable outcome and the probability of other outcomes. This method is often used when the model is complex, nonlinear, or involves more than just a couple of uncertain and often interlinked parameters. A simulation can typically involve over 10,000 random evaluations of the model to produce a range of possible outputs of the model.

Since the development of Monte Carlo Simulation in the 1940's, originally for the research of Atomic bombs, the methodology has been applied to many fields including insurance underwriting, mining and exploration, finance, fund portfolio design, engineering and many more.

Why We Use Monte Carlo Simulation Models
One fundamental flaw with many approaches to risk assessment is the 'flaw of averages' which is to assume that the most likely outcome is the same as the average of all possible outcomes.  While it is possible to run 'What If' or 'Solver' calculations within spreadsheet models, these are often  limited to one or two variable inputs and will only generate different possible outcomes and not the probability of these outcomes actually happening which leaves the big question still unanswered, what is the chance of an outcome actually happening.

Benefits of Advanced Capital Consulting Monte Carlo Simulation Models
There are many benefits to embracing the power of our models which will provide the key risk analysis information to decision makers which in turn leads to; 

• Competitive Advantage
• More informed and faster decision making
• Stakeholder confidence
• Access to Capital
• Managed risk and improved returns
• Enhanced asset and portfolio value