Okay, this is just a quick one for those who attended the webinar a couple of weeks back on State Space Theory and Monte Carlo.
During the presentation, we demonstrated the effects of ’Control Design Error’ versus ’Control Operation Quality’ through a Control Spread setting in our model. We also entertained a Benefit of Cost Analysis for responding to this inherent risk so that we could make an investment decision for treating the risk.
All grand !!!
To our surprise, the impact of widening the Control Spread in the model generated a Long Tailed Distribution effect, and that spurred on various questions from practitioners. How could the convolution of a group of uniform distributions in our randomised Monte Carlo model result in such Long Tailed outcomes?
Control Spread Long Tails | Martin Davies [LINK]
Well as promised, we have another short presentation to summarise the effects from weak control operation and a few stark realities seem to become obvious. Primarily, if anyone wanted proof that Risk Based Auditors or Quality Control Managers add value to a business, this Long-Tailed Control Spread dynamic puts forward an argument to support what these people do, and the fight against tails is surely a desirable endeavour for stakeholders to consider in any business. Separately, we added to our long-standing story that risk has shape, and in that, I will leave you here for the time being until next time.