Some tips for AT1B
1. Firstly, a general point about MC simulations in relation to this assignment is that it might be
useful is to keep in mind that t
he simulation is effectively pretending to run 10,000 universes in
parallel and then looking at the outputs from all 10,000 universes and counting up which
outcomes occurred from the most to the least. This is what the charts represent, with results
binned into 20 buckets. Another way to use the simulations - more in line with the assignment - is
to explore what happens in bad scenarios - for example, where ore production is unduly low. This
may help you frame advice along the lines of “If ore production is below X units then do Y”. More
on this in the next point.
2. The report should explore the variables and the decisions that should be made to guide the
business to maximise the amount of cash at the end of five years. One way to do this is to look at
creating a decision tree. The aim is to provide an analysis that can be used when running the
mine. So that when an event occurs, you can outline what the choices are and which one should
be taken to help drive the best performance from the business. A contrived example: If the mine
produces gold within this range and the price is within this range in the first year, you can invest
this additional amount of money in exploration in order to increase the chances of finding another
mine. However, if the mine produces… and so on.
3. As for the report style, deductive writing can be used as a technique to focus on the key points up
front. This allows the findings and insights to be given at the beginning of the report. The reason
for doing this is that it enables busy executives to focus on the most important takeaways and
does not force them to read the whole document before getting the substance. Often reports are
rarely read to the end, so it makes sense to get the key messages up front, grab their attention
and then work through the main points of your argument in the rest of the report. All the
supporting evidence can be provided either in the text (if it is important) or in the appendices (if
less important or too detailed). I am pretty sure that most of the latter never gets read (except by
people marking assignments!).
a. This is a nice summary piece about what kind of style, deductive or inductive, is relevant
in different contexts from Prof. Fudge at Kaplan University.
b. This guide from Victoria University makes some interesting points, only some of which I
have reiterated in this document.
c. Another useful resource, the Colorado State University Writing Guides -
4. Strategic use of white space can be a great tool for creating a well laid out report that draws the
reader in and guides them through.
5. Don’t be afraid to use pictures and graphics to make the report more welcoming. Just make sure
they are appropriate, relevant and you are not infringing copyright. Remember to label them and
reference them using the UTS Harvard style as well.
6. When tables and charts are used it is also important that they support the argument you are
presenting. They also need to be presented in such a way that makes it clear that is what they are
doing by giving them meaningful labels. Finally, in the same way, that it is good practice to include
a table of contents, a table of figures and tables included at the end of a report looks more
professional and makes it easier to find a specific item easily.
7. Make sure that you are including and emphasising only the most important things to make your
recommendations and arguments. Things such as working through a 100-line Monte Carlo
simulation may not be the best use of your limited word count to grab and hold the attention of
the board of a company. Similarly, you do not need to include extensive details of different
scenarios you tried while simply getting yourself an understanding the model. Include and
emphasise only the relevant ones (Those that are pertinent the points you are trying to make.) In
terms of doing this assignment, I will look at your model, but if you wish to explain in detail, what
you explored, put it in the appendixes.
8. Similar to the point above, back of the envelope calculations are for working out your model, they
don't need to be shared with senior management. If you would like to include them, please
include these as plausibility arguments in your appendices.
9. Cutting and pasting bits of your code runs the risk of looking unprofessional. I would advise
creating a word table and place the information in that, ensuring only the information that
directly supports your argument is used.
10. Following on from the point above, cut and paste of distribution ranges can also be difficult to
interpret to the plain eye. I would advise translating this into the ‘business’ language. That is,
write about what the ranges are and the confidence intervals. For example, “the range of most
likely outcomes (50% of simulations) is between $1.2Mil and $3.2Mil. There is a 10% chance of
only generating less than $600K in a poor performing mine, but on the other hand, it could
generate at least $12Mil if all our assumptions fall in our favour. However, there is less than a 10%
chance of that happening with our current forecasts. The most likely scenario is that it will
generate around $2.6Mil at the end of the second year.”
11. Another example of how to state the different values and their likelihood is: 50% of all modelled
revenue outcomes fall in the range $1.1 million to $4.8 million OR The possibility of exceeding
$50Mil total revenue is less than 1 in 10.
12. Please note that the top and bottom 10% was only intended as a guide to help you think about
what was happening in the model. It was not the default benchmark for talking about the
outcomes. Explore different thresholds and their outcomes. How bad is the ‘worst’ end and how
good is the ‘good’ end of the distribution?
13. Talking about the maximum and minimum can be misleading since those figures are very unlikely
to eventuate. It would be better to look at more realistic ranges such as 10% and 20%. These can
be talked about in ways such as; “There is only a 10% chance of reaching $X in revenue”. Some
more examples:
a. The maximum total revenue is $5Mil.
b. Earning more than $3Mil is the best-case outcome that will only occur in only 10% of the
most favourable simulations.
c. The outcome that was reached in top 20% of simulations is at least $2.6Mil.
d. Note: The $5Mil figure is almost impossible to reach (1 in 10,000).
The impression taken away from each of the above statements is very different
14. Rounding - given that you are dealing with simulations it doesn’t make sense to talk about the
figures in very accurate terms. For example, $4,234,244.32 give a feeling of certainty that is not
warranted by the Monte Carlo technique.
15. It is strongly advised to pick a reasonable a number naming convention that is consistent and
conveys meaning and maintain that consistency throughout the report. This includes the number
of decimal points in use. Be clear about what currency is that you are using in the report and if for
a reason you need to introduce a second currency, always refer to that with its currency code.
16. Assumptions - If you make an assumption, clearly state it where it is relevant in the report. It can
also be helpful to have a table of assumptions as an appendix to allow easy access to them all in
one place.
17. Provide reports as PDFs not Word documents for the final submission. Helps with Word's
overzealous format correction helper that highlights any spelling mistakes, formatting
inconsistencies and unresolved tracked changes. Also, if you have images with circles drawn on
them they are frozen in place and don’t get moved to a different part of the figure. Plus, fonts are
fixed and don't rely on the target machines configuration.

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