cb user manual

Oracle Crystal Ball, Fusion EditionUser Manual

Release 11.1.1.1.00

September 2008

Crystal Ball User Manual, Release 11.1.1.1.00

Copyright 1988, 2008, Oracle. All rights reserved.

Primary Author: Barbara Gentry

Contributor: David Blankinship, Eric Wainwright

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Contents

1 Welcome1.1 Who should use this program................................................................................................... 1-11.2 What you will need..................................................................................................................... 1-11.3 About the Crystal Ball documentation set .............................................................................. 1-11.4 Conventions used in this manual ............................................................................................. 1-31.4.1 Screen capture notes............................................................................................................ 1-41.5 Getting help ................................................................................................................................. 1-41.6 Technical support and more...................................................................................................... 1-4

2 Crystal Ball Overview2.1 Model building and risk analysis overview............................................................................ 1-12.1.1 Risk and risk analysis.......................................................................................................... 1-22.1.2 What is a model?.................................................................................................................. 1-22.1.2.1 Data vs. analysis ........................................................................................................... 1-22.1.3 Traditional spreadsheet analysis ....................................................................................... 1-22.1.3.1 Point estimates .............................................................................................................. 1-32.1.3.2 Range estimates ............................................................................................................ 1-32.1.3.3 What-if scenarios .......................................................................................................... 1-32.1.4 Monte Carlo simulation and Crystal Ball......................................................................... 1-32.1.4.1 History............................................................................................................................ 1-42.1.4.2 Probability distributions and assumptions............................................................... 1-42.1.4.3 Forecasts......................................................................................................................... 1-42.1.4.4 Certainty ........................................................................................................................ 1-42.1.4.5 Benefits of Monte Carlo analysis ................................................................................ 1-52.2 Steps for using Crystal Ball........................................................................................................ 1-52.2.1 Resources for learning Crystal Ball ................................................................................... 1-52.3 Starting and closing Crystal Ball............................................................................................... 1-62.3.1 Starting Crystal Ball manually........................................................................................... 1-62.3.2 Starting Crystal Ball automatically ................................................................................... 1-62.3.3 Closing Crystal Ball ............................................................................................................. 1-62.4 The Crystal Ball menus and toolbar ......................................................................................... 1-72.4.1 The Crystal Ball menus ....................................................................................................... 1-72.4.2 The Crystal Ball toolbar ...................................................................................................... 1-7

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3 Defining Model Assumptions3.1 Overview...................................................................................................................................... 2-13.2 Defining assumptions ................................................................................................................ 2-23.2.1 About assumptions and probability distributions.......................................................... 2-23.2.2 Defining an assumption...................................................................................................... 2-23.2.3 Entering an assumption...................................................................................................... 2-33.3 Additional assumption features ............................................................................................... 2-63.3.1 Entering cell references and formulas .............................................................................. 2-63.3.1.1 Dynamic vs. static cell references............................................................................... 2-63.3.1.2 Relative references........................................................................................................ 2-73.3.1.3 Absolute references ...................................................................................................... 2-73.3.1.4 Range names ................................................................................................................. 2-73.3.1.5 Formulas ........................................................................................................................ 2-73.3.2 Alternate parameter sets..................................................................................................... 2-73.3.3 Fitting distributions to data................................................................................................ 2-83.3.3.1 How distribution fitting works .................................................................................. 2-93.3.3.2 Using distribution fitting............................................................................................. 2-93.3.3.3 A distribution fitting example ................................................................................. 2-133.3.3.4 Locking parameters when fitting distributions .................................................... 2-143.3.4 Specifying correlations between assumptions ............................................................. 2-143.3.5 Setting assumption preferences...................................................................................... 2-183.4 Additional Distribution Gallery features ............................................................................. 2-203.4.1 Displaying the Distribution Gallery............................................................................... 2-203.4.2 The Distribution Gallery window .................................................................................. 2-213.4.2.1 The Distribution Gallery menubar and buttons ................................................... 2-213.4.2.2 The Category pane .................................................................................................... 2-223.4.2.3 The Distribution pane ............................................................................................... 2-223.4.2.4 The Description pane ................................................................................................ 2-223.4.3 Managing distributions.................................................................................................... 2-223.4.3.1 Creating new distributions ...................................................................................... 2-233.4.3.2 Copying and pasting distributions ......................................................................... 2-243.4.3.3 Modifying distributions............................................................................................ 2-243.4.3.4 Modifying distribution summaries and descriptions .......................................... 2-253.4.3.5 Deleting distributions ............................................................................................... 2-253.4.3.6 Setting up distributions for printing....................................................................... 2-253.4.3.7 Printing distribution information............................................................................ 2-253.4.4 Managing categories ........................................................................................................ 2-263.4.4.1 Creating new categories ........................................................................................... 2-263.4.4.2 Viewing and editing category properties .............................................................. 2-273.4.4.3 Deleting categories .................................................................................................... 2-273.4.4.4 Rearranging category order ..................................................................................... 2-273.4.4.5 Sharing categories over networks ........................................................................... 2-273.4.4.6 Using shared categories............................................................................................ 2-283.4.4.7 Sharing categories through email ........................................................................... 2-293.4.4.8 Editing shared categories ......................................................................................... 2-303.4.4.9 Unpublishing shared categories.............................................................................. 2-303.4.4.10 A note about modifying shared categories............................................................ 2-30

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4 Defining Other Model Elements4.1 Defining decision variable cells and forecast cells ................................................................. 3-14.1.1 Defining decision variable cells ......................................................................................... 3-14.1.1.1 About the Category decision variable type .............................................................. 3-34.1.2 Defining forecasts ................................................................................................................ 3-34.1.2.1 Setting forecast preferences......................................................................................... 3-54.2 Working with Crystal Ball data ............................................................................................. 3-104.2.1 Editing Crystal Ball data.................................................................................................. 3-104.2.1.1 Copying Crystal Ball data ........................................................................................ 3-104.2.1.2 Pasting Crystal Ball data........................................................................................... 3-114.2.1.3 Clearing Crystal Ball data......................................................................................... 3-114.2.2 Selecting and reviewing your data................................................................................. 3-124.2.2.1 Reviewing assumption cells..................................................................................... 3-124.2.2.2 Reviewing decision variable cells ........................................................................... 3-124.2.2.3 Reviewing forecast cells............................................................................................ 3-124.2.2.4 Reviewing selected cells ........................................................................................... 3-134.3 Setting cell preferences ........................................................................................................... 3-144.4 Saving and restoring your models ........................................................................................ 3-15

5 Running Simulations5.1 About Crystal Ball simulations ................................................................................................. 4-15.1.1 How Crystal Ball uses Monte Carlo simulation.............................................................. 4-15.1.2 Steps for running simulations............................................................................................ 4-25.2 Setting run preferences .............................................................................................................. 4-25.2.1 Trials preferences................................................................................................................. 4-45.2.2 Sampling preferences .......................................................................................................... 4-55.2.3 Speed preferences ................................................................................................................ 4-65.2.4 Options preferences............................................................................................................. 4-85.2.5 Statistics preferences ........................................................................................................... 4-95.3 Freezing Crystal Ball data cells .............................................................................................. 4-105.4 Running simulations ............................................................................................................... 4-115.4.1 About running simulations ............................................................................................. 4-115.4.2 Running a simulation....................................................................................................... 4-125.4.3 Stopping a simulation ...................................................................................................... 4-135.4.4 Continuing a simulation .................................................................................................. 4-135.4.5 Resetting and rerunning a simulation ........................................................................... 4-135.4.6 Single-stepping.................................................................................................................. 4-135.4.7 The Crystal Ball Control Panel........................................................................................ 4-145.4.7.1 The Crystal Ball Control Panel menubar ............................................................... 4-155.5 Managing chart windows....................................................................................................... 4-155.5.1 Single windows................................................................................................................. 4-155.5.2 Multiple windows ............................................................................................................ 4-165.6 Saving and restoring simulation results ............................................................................... 4-165.6.1 Saving Crystal Ball simulation results ........................................................................... 4-175.6.2 Restoring Crystal Ball simulation results ...................................................................... 4-175.6.3 Using restored results ...................................................................................................... 4-18

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5.6.4 Restored results with capability metrics ....................................................................... 4-195.7 Functions for use in Excel models ......................................................................................... 4-195.8 Running user-defined macros................................................................................................ 4-195.8.1 Interfaces ............................................................................................................................ 4-215.8.1.1 CBBeforeSimulation .................................................................................................. 4-215.8.1.2 CBAfterSimulation .................................................................................................... 4-215.8.1.3 CBBeforeTrial ............................................................................................................. 4-225.8.1.4 CBAfterTrial ............................................................................................................... 4-225.8.1.5 CBAfterRecalc ............................................................................................................ 4-225.8.2 Priority rules...................................................................................................................... 4-225.8.3 Global macros.................................................................................................................... 4-235.8.4 Toolbar macros.................................................................................................................. 4-23

6 Analyzing Forecast Charts6.1 Guidelines for analyzing simulation results ........................................................................... 5-16.2 Understanding and using forecast charts................................................................................ 5-36.2.1 Determining the certainty level ......................................................................................... 5-46.2.1.1 Moving certainty grabbers .......................................................................................... 5-46.2.1.2 Changing the certainty minimum and maximum fields ........................................ 5-56.2.1.3 Entering certainty directly........................................................................................... 5-56.2.1.4 Anchoring a grabber, then entering certainty .......................................................... 5-66.2.1.5 Resetting the certainty range ...................................................................................... 5-76.2.2 Focusing on the display range ........................................................................................... 5-76.2.2.1 Showing statistics for the display range.................................................................... 5-86.2.3 Formatting chart numbers.................................................................................................. 5-86.2.4 Changing the distribution view and interpreting statistics........................................... 5-96.2.4.1 Fitting a distribution to a forecast ........................................................................... 5-146.2.5 Using Split View ............................................................................................................... 5-156.2.6 Setting forecast preferences............................................................................................. 5-176.2.6.1 Basic instructions for setting forecast preferences................................................ 5-176.2.7 Setting forecast chart preferences................................................................................... 5-186.3 Setting chart preferences......................................................................................................... 5-196.3.1 Available settings.............................................................................................................. 5-196.3.2 Setting preferences with shortcut keys.......................................................................... 5-196.3.3 Basic customization instructions .................................................................................... 5-206.3.4 Specific customization instructions................................................................................ 5-216.3.4.1 Adding and formatting chart titles ......................................................................... 5-216.3.4.2 Setting the chart type ................................................................................................ 5-226.3.4.3 Changing the chart density ...................................................................................... 5-236.3.4.4 Showing grid lines..................................................................................................... 5-246.3.4.5 Showing the chart legend......................................................................................... 5-246.3.4.6 Setting special chart effects ...................................................................................... 5-256.3.4.7 Setting chart colors .................................................................................................... 5-256.3.4.8 Showing the mean and other marker lines............................................................ 5-256.3.4.9 Customizing chart axes and axis labels.................................................................. 5-266.3.4.10 Applying settings to the current chart and other charts...................................... 5-276.4 Managing existing charts ........................................................................................................ 5-28

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6.4.1 Opening charts .................................................................................................................. 5-286.4.2 Copying and pasting charts to other applications ....................................................... 5-286.4.2.1 Copying charts ........................................................................................................... 5-286.4.2.2 Pasting charts from the Clipboard .......................................................................... 5-296.4.3 Printing charts ................................................................................................................... 5-296.4.4 Closing charts .................................................................................................................... 5-306.4.5 Deleting charts .................................................................................................................. 5-30

7 Analyzing Other Charts7.1 Overview...................................................................................................................................... 6-17.2 Understanding and using overlay charts ................................................................................ 6-17.2.1 Creating an overlay chart ................................................................................................... 6-27.2.2 Customizing overlay charts ............................................................................................... 6-67.2.3 Using distribution fitting with overlay charts................................................................. 6-67.3 Understanding and using trend charts.................................................................................... 6-77.3.1 Creating trend charts........................................................................................................... 6-87.3.2 Customizing trend charts ................................................................................................ 6-107.3.2.1 Changing trend chart views..................................................................................... 6-107.3.2.2 Specifying when trend charts appear ..................................................................... 6-117.3.2.3 Adding, removing, and ordering forecasts ........................................................... 6-127.3.2.4 Changing the overall appearance of trend charts................................................. 6-127.3.2.5 Setting certainty band type and colors ................................................................... 6-137.3.2.6 Setting certainty bands ............................................................................................. 6-147.3.2.7 Changing value axis preferences............................................................................. 6-147.4 Understanding and using sensitivity charts ........................................................................ 6-167.4.1 About sensitivity charts ................................................................................................... 6-167.4.2 Creating sensitivity charts ............................................................................................... 6-177.4.3 How Crystal Ball calculates sensitivity ......................................................................... 6-197.4.4 Limitations ......................................................................................................................... 6-207.4.5 Customizing sensitivity charts........................................................................................ 6-217.4.5.1 Adding and removing assumptions ....................................................................... 6-217.4.5.2 Changing the target forecast .................................................................................... 6-227.4.5.3 Setting sensitivity preferences ................................................................................. 6-227.4.5.4 Setting sensitivity chart preferences ....................................................................... 6-247.5 Understanding and using assumption charts...................................................................... 6-267.5.1 Customizing assumption charts ..................................................................................... 6-277.5.1.1 Setting assumption chart views............................................................................... 6-277.5.1.2 Setting assumption preferences............................................................................... 6-277.5.1.3 Setting assumption chart preferences..................................................................... 6-287.6 Understanding and using scatter charts............................................................................... 6-287.6.1 Creating scatter charts...................................................................................................... 6-297.6.2 Customizing scatter charts .............................................................................................. 6-327.6.2.1 Adding and removing assumptions and forecasts............................................... 6-327.6.2.2 Setting scatter preferences........................................................................................ 6-337.6.2.3 Setting scatter chart preferences.............................................................................. 6-357.6.2.4 Scatter charts and filtered data ................................................................................ 6-36

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8 Creating Reports and Extracting Data8.1 Creating reports .......................................................................................................................... 7-18.1.1 Basic steps ............................................................................................................................. 7-28.1.2 Defining custom reports ..................................................................................................... 7-48.1.2.1 Report sections .............................................................................................................. 7-58.1.2.2 Report details ................................................................................................................ 7-68.1.2.3 Report processing notes............................................................................................... 7-88.2 Extracting data............................................................................................................................. 7-8

9 Crystal Ball Tools9.1 Overview...................................................................................................................................... 9-19.1.1 Tools and run preferences .................................................................................................. 9-29.2 Batch Fit tool ................................................................................................................................ 9-29.2.1 Batch Fit example................................................................................................................. 9-39.2.1.1 Generating Batch Fit results ........................................................................................ 9-39.2.1.2 Using Batch Fit results in a model ............................................................................. 9-79.2.1.3 Interpreting the results ................................................................................................ 9-89.3 Correlation Matrix tool............................................................................................................... 9-99.3.1 Correlations .......................................................................................................................... 9-99.3.2 Correlation matrix ............................................................................................................... 9-99.3.3 Correlation Matrix example ............................................................................................ 9-109.4 Tornado Chart tool .................................................................................................................. 9-139.4.1 Tornado chart ................................................................................................................... 9-139.4.2 Spider chart........................................................................................................................ 9-149.4.3 Tornado Chart example ................................................................................................... 9-159.4.3.1 Interpreting the results ............................................................................................. 9-179.4.4 Limitations ......................................................................................................................... 9-199.5 Bootstrap tool............................................................................................................................ 9-199.5.1 Bootstrap example ............................................................................................................ 9-219.5.1.1 Interpreting the results ............................................................................................. 9-249.6 Decision Table tool................................................................................................................... 9-269.6.1 Decision Table example ................................................................................................... 9-279.6.1.1 Interpreting the results ............................................................................................. 9-299.7 Scenario Analysis tool ............................................................................................................. 9-309.7.1 Scenario Analysis example.............................................................................................. 9-319.7.1.1 Interpreting the results ............................................................................................. 9-339.8 2D Simulation tool ................................................................................................................... 9-349.8.1 2D Simulation example.................................................................................................... 9-359.8.1.1 Interpreting the results ............................................................................................. 9-379.8.2 Second-order assumptions .............................................................................................. 9-409.9 Data Analysis tool.................................................................................................................... 9-419.9.1 Data Analysis example .................................................................................................... 9-419.9.1.1 Generating Data Analysis results............................................................................ 9-42

A Selecting and Using Probability DistributionsA.1 Understanding probability distributions ............................................................................... A-1

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A.1.1 A probability example........................................................................................................ A-2A.1.2 Discrete and continuous probability distributions ........................................................ A-4A.2 Selecting a probability distribution ......................................................................................... A-4A.3 Using basic distributions .......................................................................................................... A-6A.4 Using continuous distributions................................................................................................ A-7A.4.1 Beta distribution ................................................................................................................. A-8A.4.1.1 Parameters .................................................................................................................... A-8A.4.1.2 Conditions .................................................................................................................... A-8A.4.1.3 Description ................................................................................................................... A-8A.4.1.4 Example......................................................................................................................... A-9A.4.2 BetaPERT distribution...................................................................................................... A-10A.4.2.1 Parameters .................................................................................................................. A-10A.4.2.2 Conditions .................................................................................................................. A-10A.4.2.3 Description ................................................................................................................. A-10A.4.2.4 Example....................................................................................................................... A-10A.4.3 Exponential distribution .................................................................................................. A-11A.4.3.1 Parameter.................................................................................................................... A-11A.4.3.2 Conditions .................................................................................................................. A-11A.4.3.3 Description ................................................................................................................. A-12A.4.3.4 Example one ............................................................................................................... A-12A.4.3.5 Example two............................................................................................................... A-12A.4.4 Gamma distribution (also Erlang and chi-square)...................................................... A-13A.4.4.1 Parameters .................................................................................................................. A-13A.4.4.2 Conditions .................................................................................................................. A-13A.4.4.3 Description ................................................................................................................. A-13A.4.4.4 Example one ............................................................................................................... A-13A.4.4.5 Example two............................................................................................................... A-14A.4.4.6 Chi-square and Erlang distributions ...................................................................... A-14A.4.5 Logistic distribution ......................................................................................................... A-15A.4.5.1 Parameters .................................................................................................................. A-15A.4.5.2 Description ................................................................................................................. A-15A.4.5.3 Calculating parameters............................................................................................. A-15A.4.6 Lognormal distribution ................................................................................................... A-16A.4.6.1 Parameters .................................................................................................................. A-16A.4.6.2 Conditions .................................................................................................................. A-16A.4.6.3 Description ................................................................................................................. A-16A.4.6.4 Example....................................................................................................................... A-16A.4.6.5 Lognormal parameter sets........................................................................................ A-17A.4.7 Maximum extreme distribution ..................................................................................... A-17A.4.7.1 Parameters .................................................................................................................. A-17A.4.7.2 Description ................................................................................................................. A-17A.4.7.3 Calculating parameters............................................................................................. A-18A.4.8 Minimum extreme distribution...................................................................................... A-18A.4.8.1 Parameters .................................................................................................................. A-18A.4.8.2 Description ................................................................................................................. A-18A.4.8.3 Calculating parameters............................................................................................. A-19A.4.9 Normal distribution.......................................................................................................... A-19

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A.4.9.1 Parameters .................................................................................................................. A-19A.4.9.2 Conditions .................................................................................................................. A-19A.4.9.3 Description ................................................................................................................. A-20A.4.9.4 Example....................................................................................................................... A-20A.4.10 Pareto distribution............................................................................................................ A-21A.4.10.1 Parameters .................................................................................................................. A-21A.4.10.2 Description ................................................................................................................. A-21A.4.10.3 Calculating parameters............................................................................................. A-21A.4.11 Students t distribution .................................................................................................... A-22A.4.11.1 Parameters .................................................................................................................. A-22A.4.11.2 Conditions .................................................................................................................. A-22A.4.11.3 Description ................................................................................................................. A-22A.4.11.4 Example....................................................................................................................... A-23A.4.12 Triangular distribution .................................................................................................... A-23A.4.12.1 Parameters .................................................................................................................. A-23A.4.12.2 Conditions .................................................................................................................. A-23A.4.12.3 Description ................................................................................................................. A-23A.4.12.4 Example one ............................................................................................................... A-23A.4.12.5 Example two............................................................................................................... A-24A.4.13 Uniform distribution ........................................................................................................ A-24A.4.13.1 Parameters .................................................................................................................. A-24A.4.13.2 Conditions .................................................................................................................. A-24A.4.13.3 Description ................................................................................................................. A-24A.4.13.4 Example one ............................................................................................................... A-24A.4.13.5 Example two............................................................................................................... A-25A.4.14 Weibull distribution (also Rayleigh distribution) ....................................................... A-26A.4.14.1 Parameters .................................................................................................................. A-26A.4.14.2 Description ................................................................................................................. A-26A.4.14.3 Calculating parameters............................................................................................. A-26A.4.14.4 Example....................................................................................................................... A-27A.5 Using discrete distributions ................................................................................................... A-27A.5.1 Binomial distribution ....................................................................................................... A-28A.5.1.1 Parameters .................................................................................................................. A-28A.5.1.2 Conditions .................................................................................................................. A-28A.5.1.3 Description ................................................................................................................. A-28A.5.1.4 Example one ............................................................................................................... A-28A.5.1.5 Example two............................................................................................................... A-29A.5.2 Discrete uniform distribution ......................................................................................... A-29A.5.2.1 Parameters .................................................................................................................. A-29A.5.2.2 Conditions .................................................................................................................. A-29A.5.2.3 Description ................................................................................................................. A-30A.5.2.4 Example....................................................................................................................... A-30A.5.3 Geometric distribution..................................................................................................... A-30A.5.3.1 Parameter.................................................................................................................... A-30A.5.3.2 Conditions .................................................................................................................. A-31A.5.3.3 Description ................................................................................................................. A-31A.5.3.4 Example one ............................................................................................................... A-31

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A.5.3.5 Example two............................................................................................................... A-31A.5.4 Hypergeometric distribution .......................................................................................... A-32A.5.4.1 Parameters .................................................................................................................. A-32A.5.4.2 Conditions .................................................................................................................. A-32A.5.4.3 Description ................................................................................................................. A-32A.5.4.4 Example one ............................................................................................................... A-32A.5.4.5 Example two............................................................................................................... A-33A.5.5 Negative binomial distribution ...................................................................................... A-34A.5.5.1 Parameters .................................................................................................................. A-34A.5.5.2 Conditions .................................................................................................................. A-34A.5.5.3 Description ................................................................................................................. A-34A.5.5.4 Example....................................................................................................................... A-34A.5.6 Poisson distribution ......................................................................................................... A-35A.5.6.1 Parameter.................................................................................................................... A-35A.5.6.2 Conditions .................................................................................................................. A-35A.5.6.3 Description ................................................................................................................. A-35A.5.6.4 Example one ............................................................................................................... A-35A.5.6.5 Example two............................................................................................................... A-36A.5.7 Yes-no distribution ........................................................................................................... A-37A.5.7.1 Parameter.................................................................................................................... A-37A.5.7.2 Conditions .................................................................................................................. A-37A.5.7.3 Description ................................................................................................................. A-37A.5.7.4 Example....................................................................................................................... A-37A.6 Using the custom distribution ............................................................................................... A-38A.6.1 Custom distribution ......................................................................................................... A-38A.6.2 Example one ...................................................................................................................... A-38A.6.3 Example two...................................................................................................................... A-41A.6.4 Example three.................................................................................................................... A-44A.6.5 Entering tables of data into custom distributions........................................................ A-46A.6.5.1 Unweighted values.................................................................................................... A-46A.6.5.2 Weighted values ........................................................................................................ A-47A.6.5.3 Mixed single values, continuous ranges, and discrete ranges............................ A-48A.6.5.4 Mixed ranges, including sloping ranges ................................................................ A-48A.6.5.5 Connected series of ranges (sloping) ...................................................................... A-49A.6.5.6 Connected series of continuous uniform ranges (cumulative)........................... A-49A.6.5.7 Other data load notes................................................................................................ A-50A.6.6 Changes from Crystal Ball 2000.x (5.x) .......................................................................... A-50A.6.7 Other important custom distribution notes ................................................................. A-50A.7 Truncating distributions......................................................................................................... A-51A.7.1 Be aware... .......................................................................................................................... A-51A.8 Comparing the distributions.................................................................................................. A-52A.9 Using probability functions.................................................................................................... A-53A.9.1 Limitations of probability functions .............................................................................. A-54A.9.2 Probability functions and random seeds....................................................................... A-54A.10 Sequential sampling with custom distributions.................................................................. A-54A.10.1 Creating a custom SIP distribution ................................................................................ A-55A.10.2 Running simulations with SIPs ...................................................................................... A-56

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B Maximizing Your Use of Crystal BallB.1 Simulation accuracy................................................................................................................... B-1B.1.1 Precision control.................................................................................................................. B-1B.1.2 Sampling method................................................................................................................ B-3B.2 Simulation speed........................................................................................................................ B-3B.3 Sample size.................................................................................................................................. B-4B.4 Correlated assumptions ............................................................................................................ B-4

C Using the Extreme Speed FeatureC.1 Overview..................................................................................................................................... C-1C.2 Compatibility issues .................................................................................................................. C-2C.2.1 Multiple-workbook models............................................................................................... C-2C.2.2 Circular references.............................................................................................................. C-2C.2.3 Crystal Ball Excel functions............................................................................................... C-3C.2.4 User-defined functions....................................................................................................... C-3C.2.4.1 Pure functions .............................................................................................................. C-3C.2.4.2 Range arguments ......................................................................................................... C-4C.2.4.3 Volatile functions and array arguments................................................................... C-4C.2.5 Running user-defined macros........................................................................................... C-5C.2.6 Special functions ................................................................................................................. C-5C.2.7 Undocumented behavior of standard functions ............................................................ C-5C.2.8 Incompatible range constructs.......................................................................................... C-6C.2.8.1 Dynamic ranges ........................................................................................................... C-6C.2.9 Labels in formulas that are not defined names .............................................................. C-6C.2.10 Multiple area references..................................................................................................... C-6C.2.11 3-D references...................................................................................................................... C-6C.2.12 Data Tables .......................................................................................................................... C-6C.3 Other important differences ..................................................................................................... C-6C.3.1 OptQuest and CB Tools ..................................................................................................... C-7C.3.2 Precision control and cell error checking ........................................................................ C-7C.3.3 Spreadsheet updating ........................................................................................................ C-7C.3.4 Very large models............................................................................................................... C-7C.3.5 Memory usage..................................................................................................................... C-7C.3.6 Spreadsheets with no Crystal Ball data ........................................................................... C-8C.4 Numerical differences ............................................................................................................... C-8C.5 Maximizing the benefits of Extreme Speed.......................................................................... C-10C.5.1 String intermediate results in formulas......................................................................... C-11C.5.2 Calls to user-defined functions....................................................................................... C-11C.5.3 Dynamic assumptions...................................................................................................... C-11C.5.4 Excel functions .................................................................................................................. C-11

D Using the Process Capability FeaturesD.1 Overview..................................................................................................................................... D-1D.2 Activating the process capability features ............................................................................. D-2D.3 Setting capability calculation options ..................................................................................... D-2D.3.1 Calculation Method ............................................................................................................ D-3

xiii

D.4 Setting specification limits and targets ................................................................................... D-4D.5 Viewing capability metrics ....................................................................................................... D-4D.5.1 Viewing forecast charts and capability metrics together.............................................. D-5D.5.2 Viewing LSL, USL, and Target marker lines .................................................................. D-7D.6 Extracting capability metrics .................................................................................................... D-7D.6.1 Extracting capability metrics automatically ................................................................... D-8D.6.2 Extracting capability metrics manually........................................................................... D-8D.7 Including capability metrics in reports................................................................................... D-9D.8 Capability metrics list.............................................................................................................. D-11

E BibliographyE.1 Bootstrap ..................................................................................................................................... E-1E.2 Monte Carlo simulation ............................................................................................................ E-1E.3 Probability theory and statistics .............................................................................................. E-2E.4 Random variate generation methods...................................................................................... E-2E.5 Specific distributions ................................................................................................................. E-3E.5.1 Extreme value distribution................................................................................................ E-3E.5.2 Lognormal distribution...................................................................................................... E-3E.5.3 Weibull distribution ........................................................................................................... E-3E.6 Tornado charts and sensitivity analysis ................................................................................. E-3E.7 Two-Dimensional simulation................................................................................................... E-3E.8 Uncertainty analysis .................................................................................................................. E-4E.9 Sequential sampling with SIPs................................................................................................. E-4

1 Welcome 1-1

1Welcome

Oracle Crystal Ball, Fusion Edition, is a user-friendly, graphically oriented forecasting and risk analysis program that takes the uncertainty out of decision-making.

Through the power of simulation, Crystal Ball becomes an effective tool in the hands of the decision-maker. You can answer questions such as, "Will we stay under budget if we build this facility?" or, "What are the chances this project will finish on time?" or, "How likely are we to achieve this level of profitability?" With Crystal Ball, you will become a more confident, efficient, and accurate decision-maker.

Crystal Ball is easy to learn and easy to use. Unlike other forecasting and risk analysis programs, you do not have to learn unfamiliar formats or special modeling languages. To get started, all you have to do is create a spreadsheet. From there, this manual guides you step by step, explaining Crystal Ball terms, procedures, and results.

And you do get results from Crystal Ball. Through a technique known as Monte Carlo simulation, Crystal Ball forecasts the entire range of results possible for a given situation. It also shows you confidence levels, so you will know the likelihood of any specific event taking place.

1.1 Who should use this programCrystal Ball is for decision-makers, from the businessperson analyzing the potential for new markets to the scientist evaluating experiments and hypotheses. Crystal Ball and has been developed with a wide range of spreadsheet uses and users in mind.

You dont need highly advanced statistical or computer knowledge to use Crystal Ball to its full potential. All you need is a basic working knowledge of your personal computer and the ability to create a spreadsheet model.

1.2 What you will needCrystal Ball runs on several versions of Microsoft Windows and Microsoft Excel. For a complete list of required hardware and software, see cb_system_requirements.html in your Crystal Ball installation folder, by default, C:\Program Files\Oracle\Crystal Ball.

Any changes to these requirements can be found at:

http://www.oracle.com/crystalball

1.3 About the Crystal Ball documentation setThe Crystal Ball User Manual is intended for students, analysts, engineers, executives, and others who want to learn how to use the main features of Crystal Ball.

About the Crystal Ball documentation set

1-2 Crystal Ball User Manual

The Crystal Ball Installation and Licensing Guide describes how to install and license Crystal Ball.

For a brief introduction and tutorials that offer hands-on experience with Crystal Ball, see the Crystal Ball Getting Started Guide. That guide also contains a summary of the task information included in this User Manual.

For information about distribution defaults and formulas plus other statistical information, see the Crystal Ball Reference Manual.

The CB Predictor User Manual, OptQuest User Manual, Crystal Ball Developer Kit User Manual, and OptQuest Developer Kit User Manual offer additional information about those Crystal Ball products.

For users of Six Sigma, DFSS, Lean principles, and similar quality methodologies, the Process Capability Guide offers tutorials and other information to help you use Crystal Balls process capability features.

All of these Crystal Ball documents are available in Adobe Acrobat pdf format. To view them, choose Start > [All] Programs > Crystal Ball > Documentation or start Crystal Ball and choose Help > Crystal Ball > User Manuals.

This Crystal Ball User Manual includes the following additional chapters and appendices:

Chapter 2 "Crystal Ball Overview"

Introduces Crystal Ball and explains how it uses spreadsheet models to help with risk analysis and many types of decision-making.

Chapter 3 "Defining Model Assumptions"

Describes how to define assumption cells in models and how to use the Crystal Ball Distribution Gallery.

Chapter 4 "Defining Other Model Elements"

Describes how to define decision variable cells and forecast cells in models. It also explains how to set cell preferences.

Chapter 5 "Running Simulations"

Provides step-by-step instructions for setting up and running a simulation in Crystal Ball.

Chapter 6 "Analyzing Forecast Charts"

Explains how to use Crystal Balls powerful analytical features to interpret the results of a simulation, focusing on forecast charts.

Chapter 7 "Analyzing Other Charts"

Provides additional information to help you analyze and present the results of your simulations using advanced charting features.

Chapter 8 "Creating Reports and Extracting Data"

Provides additional information to help you share Crystal Ball data and graphics with other applications, and describes how to prepare reports with charts and data.

Chapter 9 "Crystal Ball Tools"

Describes tools that extend the functionality of Crystal Ball, such as the Tornado Chart and Decision Table tools.

Appendix A "Selecting and Using Probability Distributions"

Conventions used in this manual

Welcome 1-3

Describes all the pre-defined probability distributions used to define assumptions in Crystal Ball, and includes suggestions on how to choose and use them.

Appendix B "Maximizing Your Use of Crystal Ball"

Describes different aspects that enhance the performance of the programs features.

Appendix C "Using the Extreme Speed Feature"

Discusses the optional Extreme Speed feature available with Crystal Ball and describes its benefits and compatibility issues.

Appendix D "Using the Process Capability Features"

Discusses the process capability features that can be activated to support Six Sigma, DFSS, Lean principles, and similar quality programs.

Appendix E "Bibliography"

Lists related publications, including statistics textbooks.

Glossary

Defines terms specific to Crystal Ball and other statistical terms used in this manual.

1.4 Conventions used in this manualThe following text conventions are used in this document:

This manual uses the following additional conventions:

Text separated by > symbols means that you select menu options in the sequence shown, starting from the left. The following example means that you select the Exit option from the File menu:

1. Select File > Exit.

Steps with attached icons mean that you can click the icon instead of manually selecting the menu options in the text. For example:

2. Select Define > Define Assumption.

Sometimes you have to press two or more keys at the same time. For example, Ctrl-c means that you hold down the Ctrl key and type c. Capitalization is important; Ctrl-c and Ctrl-C are two different key sequences.

A key sequence without hyphens means you type the sequence in the order shown but not simultaneously. For example, Ctrl-q N means that you press the Ctrl key and type q simultaneously, and then type N.

This version of Crystal Ball runs on Microsoft Office 2007 as well as Office 2003 and earlier versions. The default instructions are for Office 2003. Where Office 2007

Convention Meaningboldface Boldface type indicates graphical user interface elements associated

with an action, or terms defined in text or the glossary.

italic Italic type indicates book titles, emphasis, or placeholder variables for which you supply particular values.

monospace Monospace type indicates commands within a paragraph, URLs, code in examples, text that appears on the screen, or text that you enter.

Getting help


instructions are different, a note describes the difference. For more information about using Crystal Ball with Office 2007, see Appendix B in the Crystal Ball Getting Started Guide.

1.4.1 Screen capture notesAll the screen captures in this document were taken in Excel 2003 for Windows XP Professional and Excel 2003 for Windows XP, using a Crystal Ball Run Preferences random seed setting of 999 unless otherwise noted.

Due to round-off differences between various system configurations, you might obtain slightly different calculated results than those shown in the examples.

1.5 Getting helpAs you work in Crystal Ball, you can display online help in a variety of ways:

Click the Help button in a dialog.

Click the Help tool in the Crystal Ball toolbar or ribbon in Excel.

In the Excel menubar, choose Help > Crystal Ball > Crystal Ball Help.

In the Distribution Gallery and other dialogs, press F1.

1.6 Technical support and moreOracle offers a variety of resources to help you use Crystal Ball, such as technical support, training, and other services. For information, see:

http://www.oracle.com/crystalball

Note: In Excel 2007, click Help at the right end of the Crystal Ball ribbon. Note that if you press F1 in Excel 2007, Excel help appears unless you are viewing the Distribution Gallery or another Crystal Ball dialog.

The legacy WinHlp32 viewer for online help files is not shipped with Windows Vista, so 32-bit help files in WinHelp format with extension .hlp (such as the CB Predictor help) cannot be opened. For information from Microsoft about downloading a viewer, see:

http://support.microsoft.com/kb/917607

2 Crystal Ball Overview 2-1

2Crystal Ball Overview

In this chapter:

Section 2.1, "Model building and risk analysis overview"

Section 2.2, "Steps for using Crystal Ball"

Section 2.3, "Starting and closing Crystal Ball"

Section 2.4, "The Crystal Ball menus and toolbar"

This chapter presents the basics you need to understand, start, review the menus and toolbars, and close Crystal Ball. Now, spend a few moments learning how Crystal Ball can help you make better decisions under conditions of uncertainty.

Chapters 2 through 7 of this Crystal Ball User Manual describe how to build, run, analyze, and present your own Crystal Ball model simulations.

2.1 Model building and risk analysis overviewCrystal Ball is an analytical tool that helps executives, analysts, and others make decisions by performing simulations on spreadsheet models. The forecasts that result from these simulations help quantify areas of risk so decision-makers can have as much information as possible to support wise decisions.

The basic process for using Crystal Ball, then, is to:

1. Build a spreadsheet model that describes an uncertain situation.

2. Run a simulation on it.

3. Analyze the results.

This User Manual is structured to match those main tasks. The guidelines in Section 2.2, "Steps for using Crystal Ball" fill in some details and indicate where each task is discussed.

If you are new to Crystal Ball and risk analysis tools, you might not be familiar with or know what is meant by models or risk analysis. Or, if you do know, you might want a better understanding of how Crystal Ball performs a risk analysis.

The following sections give a brief overview of risk analysis and modeling. They build a foundation for understanding the many ways Crystal Ball and related products can help you minimize risk and maximize success in virtually any decision-making environment.

Model building and risk analysis overview


2.1.1 Risk and risk analysisUncertainty is usually associated with risk, where risk includes the possibility of an undesirable event coupled with severity. For example, if sales for next month are above a certain amount (a desirable event), then orders will reduce the inventory. If the reduction in inventory is large enough, there will be a delay in shipping orders (an undesirable event). If a delay in shipping means losing orders (severity), then that possibility presents a risk. As uncertainty and risk increase, decision-making becomes more difficult.

There are two points to keep in mind when analyzing risk:

Where is the risk?

How significant is the risk?

Almost any change, good or bad, poses some risk. Your own analysis will usually reveal numerous potential risk areas: overtime costs, inventory shortages, future sales, geological survey results, personnel fluctuations, unpredictable demand, changing labor costs, government approvals, potential mergers, pending legislation.

Once you identify your risks, a model can help you quantify them. Quantifying risk means determining the chances that the risk will occur and the cost if it does, to help you decide whether a risk is worth taking. For example, if there is a 25% chance of running over schedule, costing you $100 out of your own pocket, that might be a risk you are willing to take. But if you have a 5% chance of running over schedule, knowing that there is a $10,000 penalty, you might be less willing to take that risk.

Finding the certainty of achieving a particular result is often the goal of a model analysis. Risk analysis takes a model and sees what effect changing different values has on the bottom line. Risk analysis can:

Help end "analysis paralysis" and contribute to better decision-making by quickly examining all possible scenarios

Identify which variables most affect the bottom-line forecast

Expose the uncertainty in a model, leading to a better communication of risk

2.1.2 What is a model?Crystal Ball works with spreadsheet models, specifically Excel spreadsheet models. Your spreadsheet might already contain a model, depending on what type of information you have in your spreadsheet and how you use it.

2.1.2.1 Data vs. analysisIf you only use spreadsheets to hold datasales data, inventory data, account data, etc.then you dont have a model. Even if you have formulas that total or subtotal the data, you might not have a model that is useful for simulation.

A model is a spreadsheet that has taken the leap from being a data organizer to an analysis tool. A model represents the relationships between input and output variables using a combination of functions, formulas, and data. As you add more cells to the model, your spreadsheet begins to portray the behavior of a real-world system or situation.

2.1.3 Traditional spreadsheet analysisSo now you have a model, or you have created your first model. For each variable in your model, ask yourself, "How certain am I of its value? Will it vary? Is this a best


Crystal Ball Overview 2-3

estimate or a known fact?" You might notice that your model has some variables in it that arent definitely certain. Perhaps you dont have the actual data yet (this months sales figures) or the variable behaves unpredictably (individual item cost). This lack of knowledge about particular values or how some variables behave contributes to the models uncertainty.

Traditional spreadsheet analysis tries to capture this uncertainty in one of three ways:

Point estimates

Range estimates

What-if scenarios

2.1.3.1 Point estimatesPoint estimates are when you use what you think are the most likely values (technically referred to as the mode) for the uncertain variables. These estimates are the easiest, but can return very misleading results. For example, try crossing a river with an average depth of three feet. Or, if it takes you an average of 25 minutes to get to the airport, leave 25 minutes before your flight takes off. You will miss your plane 50% of the time.

2.1.3.2 Range estimatesRange estimates typically calculate three scenarios: the best case, the worst case, and the most likely case. These types of estimates can show you the range of outcomes, but not the probability of any of these outcomes.

2.1.3.3 What-if scenariosWhat-if scenarios are usually based on range estimates, and are often constructed informally. What is the worst case for sales? What if sales are best case but expenses are the worst case? What if sales are average, but expenses are the best case? What if sales are average, expenses are average, but sales for the next month are flat?

As you can see, this is extremely time consuming, and results in lots of data, but still doesnt give you the probability of achieving different outcomes.

You are still faced with these two fundamental limitations of ordinary spreadsheets:

You can change only one spreadsheet cell at a time. As a result, exploring the entire range of possible outcomes is next to impossible; you cannot realistically determine the amount of risk that is impacting your bottom line.

"What-if" analysis always results in single-point estimates which do not indicate the likelihood of achieving any particular outcome. While single-point estimates might tell you what is possible, they do not tell you what is probable.

This is where simulation with Crystal Ball comes in.

2.1.4 Monte Carlo simulation and Crystal BallSpreadsheet risk analysis uses both a spreadsheet model and simulation to analyze the effect of varying inputs on outputs of the modeled system. One type of spreadsheet simulation is Monte Carlo simulation, which randomly generates values for uncertain variables over and over to simulate a model.



2.1.4.1 HistoryMonte Carlo simulation was named for Monte Carlo, Monaco, where the primary attractions are casinos containing games of chance. Games of chance such as roulette wheels, dice, and slot machines exhibit random behavior.

The random behavior in games of chance is similar to how Monte Carlo simulation selects variable values at random to simulate a model. When you roll a die, you know that either a 1, 2, 3, 4, 5, or 6 will come up, but you dont know which for any particular trial. It is the same with the variables that have a known range of values but an uncertain value for any particular time or event (for example, interest rates, staffing needs, stock prices, inventory, phone calls per minute).

2.1.4.2 Probability distributions and assumptionsFor each uncertain variable in a simulation, you define the possible values with a probability distribution. A simulation calculates numerous scenarios of a model by repeatedly picking values from the probability distribution for the uncertain variables and using those values for the cell. Commonly, a Crystal Ball simulation calculates hundreds or thousands of scenarios in just a few seconds.

In Crystal Ball, distributions and associated scenario input values are called assumptions. They are entered and stored in assumption cells. For more information on assumptions and probability distributions, see Section 3.2.1, "About assumptions and probability distributions".

2.1.4.3 ForecastsSince all those scenarios produce associated results, Crystal Ball also keeps track of the forecasts for each scenario. These are important outputs of the model, such as totals, net profit, or gross expenses. They are defined with formulas in spreadsheet forecast cells.

For each forecast, Crystal Ball remembers the cell value for all the trials (scenarios). If you run a simulation at Demo speed, you can watch histograms of the results calculated for each forecast cell and can see how the results stabilize toward a smooth frequency distribution as the simulation progresses. After hundreds or thousands of trials, you can view sets of values, the statistics of the results (such as the mean forecast value), and the certainty of any particular value. Chapter 5 gives more information about charts of forecast results and how to interpret them.

2.1.4.4 CertaintyThe forecast results show you not only the different result values for each forecast, but also the probability of obtaining any value. Crystal Ball normalizes these probabilities to calculate another important number: the certainty.

The chance of any forecast value falling between Infinity and +Infinity is always 100%. However, the chance or certainty of that same forecast being at least zero (which you might want to calculate to make sure that you make a profit) might be only 45%.

For any range you define, Crystal Ball calculates the resulting certainty. This way, not only do you know that your company has a chance to make a profit, but you can also quantify that chance by saying that the company has a 45% chance of making a profit on a venture (a venture you might, therefore, decide to skip).

Steps for using Crystal Ball

Crystal Ball Overview 2-5

2.1.4.5 Benefits of Monte Carlo analysisCrystal Ball uses Monte Carlo simulation to overcome both of the spreadsheet limitations listed earlier:

You can describe a range of possible values for each uncertain cell in your spreadsheet. Everything you know about each assumption is expressed all at once. For example, you can define your business phone bill for future months as any value between $2500 and $3750, instead of using a single-point estimate of $3000. Crystal Ball then uses the defined range in a simulation.

With Monte Carlo simulation, Crystal Ball displays results in a forecast chart that shows the entire range of possible outcomes and the likelihood of achieving each of them.

In addition, Crystal Ball keeps track of the results of each scenario for you.

2.2 Steps for using Crystal BallFollow these general steps to create and interpret simulations with Crystal Ball; the remaining chapters provide detailed instructions:

1. Create a spreadsheet model in Microsoft Excel format with data and formula cells that represent the situation you want to analyze.

Section 2.1.2, "What is a model?" discusses spreadsheet models. Also see the references in the Bibliography.

2. Start Crystal Ball.

If you havent set up Crystal Ball to load automatically with Microsoft Excel, start Crystal Ball as described in Section 2.3, "Starting and closing Crystal Ball".

3. Load your spreadsheet model.

4. Using Crystal Ball, define assumption cells and forecast cells. If appropriate for your situation, you can also define decision variable cells.

For more information, see Section 3.2.3, "Entering an assumption" and continue on with Chapter 4.

5. Set run preferences for your simulation, as described in Section 5.2, "Setting run preferences".

6. Run the simulation, following the instructions in Section 5.4.2, "Running a simulation".

7. Analyze your results. See Section 6.2, "Understanding and using forecast charts" for suggestions.

8. Consider using CB Predictor or OptQuest, if available, for further analysis.

9. Take advantage of the many resources available to help you get the most out of Crystal Ball.

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