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Building Probability Models in Excel Part 3: Monte Carlo Simulations and Conditional Probability

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The view will learn how to download and install SIMTOOLS and FORMLIST into Excel, how to use SIMTOOLS to generate a Monte Carlo simulation of 30 sales calls, and how to calculate the conditional probability based on the results of the
Monte Carlo simulation.

Video Steps

1. Download and Install SIMTOOLS: Search Roger Myerson on Google, and click on the first link

2. Follow the links to find the SIMTOOLS download and download it

3. Go to Excel add-ins, click Select and find the file

4. Check the square to the left of SIMTOOLS.XLAM

5. Click Select to install

6. Use SIMTOOLS to generate a Monte Carlo Simulation: Open the spreadsheet from the last tutorial that simulates 30 sales calls

7. Enter =IF(C2=E2,1,0) into cell B33 and enter =C4 into cell C33

8. Enter target number of sales =12 into cell C26

9. Select A33:C232

10. Click Tools > SimTools > Simulation Table

11. Calculate the Conditional Probability: Enter =IF(C34=$C$26,B34,”..”) into D34 and copy down to D232

12. Enter =SUM(D34:D232) into Cell F28 and label “# High Skill”

13. Enter =COUNT(D34:D232) into Cell F29 and label “Total Target”

14. Enter =F28/F29 into Cell F31

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