CRYSTAL BALL

SOFTWARE REVIEW by Evan R. Anderman
Calibra Consulting LLC, www.inversemodeling.com

CRYSTAL BALL is an easy to use, yet powerful Monte-Carlo simulation add-in to Microsoft Excel that allows analysis of the risks and uncertainties associated with Microsoft Excel spreadsheet models. Monte Carlo simulation is a long established method for defining the uncertain components in a mathematical model. It involves generating numerous scenarios from a user-defined range of values, or a probability distribution, for each uncertain parameter in the spreadsheet. It calculates the result for each scenario, generating a range of results, which is evaluated to assess risk. Crystal Ball is widely used in many industries, including education, environmental, financial planning, oil and gas, and telecom, among others. There are many statistical distributions to choose from, or the user can enter a custom distribution. Crystal Ball’s functionality includes sensitivity analysis, correlation, and historical data fitting. The sensitivity analysis indicates which of the uncertain variables are most critical, and thus dominates the uncertainty associated with the model. The correlation feature allows the user to link uncertain variables and account for their positive or negative dependencies. If historical data are available, the data-fitting feature can be used to compare the data to the range of results and calculate the parameter values that yield the best fit to the data. Crystal Ball’s clear graphics and reports facilitate inclusion of as little, or as much, detail as needed to effectively present the results, although there are no options for personalized chart formats. The user’s manual is well written and includes straight-forward directions to get users started as well as in-depth discussions of the underlying theory. Crystal Ball is easy to use and experienced Excel users should have a simulation running in 30 minutes or less. More information can be obtained at www.CrystalBall.com where demo versions are available for download and various applications of Monte-Carlo Simulation are discussed. Academic pricing is available.  

Last Update: July 2003