The Mandrel Monte Carlo Setup tool acts as a front end to Palisade Corporation's @Risk Monte Carlo engine. @Risk software requires you to insert special Excel-type formulas into costing spreadsheets in order to perform Monte Carlo analysis. Mandrel enables you to create complex @Risk formulas that would otherwise have to be created manually.
Mandrel does not perform Monte Carlo analysis itself, nor is @Risk distributed as part of the Mandrel package. You must therefore have @Risk installed on your system before you can usefully employ the Mandrel facility.
What is Monte Carlo Analysis?
Monte Carlo analysis operates in a way that is analogous to predicting the outcome of an election by polling. Rather than asking every single voter how they intend to vote, several hundred randomly selected voters are polled and the outcome is inferred from their answers. In the same way, Monte Carlo analysis samples a large number of cost 'scenarios' and infers the most likely outcome from the results. Each scenario is derived by randomly selecting a cost outcome for each individual task or cost item within the uncertainty limits that you have set for that item.
Monte Carlo is a statistical tool. It doesn't give answers to direct question such as "how much will this project cost?". However, it will give probabilities that a project will not cost more than a given amount, such as "there is a 90% probability that this project will not cost more than $1.9 million".
