Case Study: JB Scherer Consulting Group LLC achieves risk-aware future net income forecasts with Palisade (@RISK)

The Most Un-Likely Case Scenario: an Introduction to Risk Analysis for Businesses

JB Scherer Consulting Group LLC, led by Jerry Scherer, used Palisade’s @RISK to help a Midwest widget manufacturer facing large forecast uncertainty. Management had widely divergent unit‑volume estimates, uncertain assemblies purchases and raw material prices, and a 30% chance of a minimum‑wage increase — all of which threatened next year’s net income and a mandatory $20,000 debt repayment.

Using Palisade’s @RISK Excel add‑in, Scherer built a Monte Carlo model (100,000 iterations) assigning probability distributions to unit volume, assemblies purchased, material price, and wage increase to produce distributions for Net Income and Net Change in Cash. The Palisade analysis found 90% of Net Income outcomes ranged from a $21,656 loss to a $50,414 gain, 90% of cash outcomes ranged from a $60,064 shortfall to a $4,516 gain, identified raw material unit price as the largest downside driver, and showed the $20,000 repayment was at serious risk—results that led management to pursue mitigation steps.

JB Scherer Consulting Group LLC

Jerry Scherer

President