Do you grab an umbrella when the weatherman calls for an 80% chance of rain? 50%? 20%? How do you make decisions about something as uncertain as the weather?
Life in general, and business specifically, can be just as uncertain as the weather. Unfortunately, most companies and highly paid executives rely on a combination of deterministic tools, heuristic thinking and averages to make their decisions. This “flaw of averages” leads many business leaders to oversimplify problems and to be far more confident in their decisions than they have any right to be.
For our last session of the 2011-2012 season, David Cordeiro will give an introduction to Monte Carlo simulation and its application to a wide variety of important business decisions. Mr. Cordeiro will share his first hand experience witnessing how deterministic decision making led to falling stock prices, work force reductions and ruined careers. It is never too late or too early to learn the art of stochastic forecasting and how to use these powerful techniques to make better decisions and avoid the Flaw of Averages.
Once requiring the power of a mainframe computer, Monte Carlo simulation software now runs on a standard laptop and can take advantage of the logic of standard Excel spreadsheets. This software should be in the toolkit of anyone trying to make decisions about future outcomes (i.e. everyone). 
