How Do Simulations Work?

How Do Simulations Work?

Simulations allow you to forecast results by performing calculations as if the current period was complete. It does so by "filling" missing transactions, up to your end date.

This is best explained using a diagram:

Suppose that today is April 15, and that your plan is monthly. You want to run a calculation for the month of April, but you don't yet have transactions from April 15 to April 30. If you were run a normal calculation, it's likely that results would be incomplete.

Most users would probably miss their sales targets. You just don't have all the transactions you expect by the end of the month. This makes it hard to estimate what your incentive spend, attainment levels, and reward assignments would look like for the entire month.

So, instead of running a normal calculation, you could choose to run the calculation in simulation mode. When you do this, the system does the following:
  • Determines that you had 6 transactions from April 1st to April 15
  • Determines that you are half-way through your plan period (April)
  • Determines that, at the current pace, 6 more transactions would be expected by April 30
  • Draws 6 transactions at random from past ones (which serve as realistic examples)
  • Complete your simulation calculation as if there were 12 transactions (not 6)

In our simple example, the simulation may be rather inaccurate because 6 transactions isn't a lot of data to determine a pace. However, as the number of transactions increases, the simulation quickly gains statistical validity. Also, those transactions drawn at random, need not be limited to those 6 from April 1st to April 15th. For example, you could decide to draw at random from the 100 (or even 1000) most recent transactions.

You can run multiple simulations. Each simulation will likely give you slightly different results, because a different set of past transactions will be selected at random. We recommend running multiple simulations to understand what variations may look like.

We will offer simulation mode each time you run a calculation for an incomplete period (i.e. some transactions are missing). Also, we will prevent accidental release of credits / rewards to users for those calculations using simulation. Indeed, the results are simulated (not real), and releasing simulated credits / rewards would be confusing to users.

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