The material below comprises excerpts from books by Dr. Johnathan Mun, our CEO and founder, such as Readings in Certified Quantitative Risk Management, 3rd Edition, and Quantitative Research Methods Using Risk Simulator and ROV BizStats Software Applying Econometrics, Multivariate Regression, Parametric and Nonparametric Hypothesis Testing, Monte Carlo Risk Simulation, Predictive Modeling, and Optimization, 4th Edition (https://www.amazon.com/author/johnathanmun). All screenshots and analytical models are run using the ROV Risk Simulator and ROV BizStats software applications. Statistical results shown are computed using Risk Simulator or BizStats. Online Training Videos are also available on these topics as well as the Certified in Quantitative Risk Management (CQRM) certification program. All materials are copyrighted as well as patent protected under international law, with all rights reserved.

In most simulation models, there are variables over which you have control, such as how much to charge for a product or how much to invest in a project. These controlled variables are called decision variables. Finding the optimal values for decision variables can make the difference between reaching an important goal and missing that goal. This chapter details the optimization process at a high level, while the next chapter, Optimization Under Uncertainty provides several step-by-step examples of resource optimization and portfolio optimization solved using Risk Simulator software.

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