Using Monte Carlo Simulation to Assess and Manage Risk In The Clinical Laboratory
- Topics:
- Risk Analysis and Management
- Tags:
- Crystal Ball,
- Management,
- Risk,
- Risk Analysis,
- Strategy
- Source:
- Crystal Ball
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Overview: Managers often are asked to consider opportunities that involve risks. Traditional approaches to evaluating uncertainty fall short of providing a comprehensive view of possible outcomes. Risk analysis techniques using Monte Carlo simulation offer a more sophisticated approach that can help the manager better understand and manage those risks. This article discusses the advantages of using risk analysis and provides three illustrations of how this approach can aid in decisionmaking in the clinical laboratory setting. Risk analysis can provide a much clearer assessment of risk and also aid in managing that risk. It provides an understanding of which assumptions pose the greatest potential risk, which can then lead to a closer examination of key assumptions. Where two or more models can be developed for a given set of assumptions, a comparison of outcomes can result in strategies for negotiation of contracts that will improve laboratory and hospital financial performance.
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Format: PDF | Size: 702KB | Date: Jan 2003 | Pages: 6
