Estimating Economic Risk Using Monte Carlo Enterprise Budgets

摘要

Farmers often admit that they are gamblers. By using Monte Carlo enterprise budgets they can learn the odds of obtaining a positive economic return from their farming enterprises. Deterministic spread sheet budgets can be converted to Monte Carlo or stochastic budgets using commercial add-ins such as @Risk. However, relatively simple budgets can be converted into Monte Carlo budgets by using the statistical functions found in Excel or Open Office. This management guide shows how to convert a simple deterministic hay budget into a Monte Carlo budget using the statistical functions in Excel.