Header Blog What if Analytics

What-If-Analytics on Trade in Tableau

The Commodity Trading Market deals with the commerce of commodities of any sorts, such as oil, soy, milk and cheese. With ERP-system Oracle JD Edwards and the Cadran add-on CTRM (Commodity Trading & Risk Management) an organization has the full ERP-solution that can help a trading company with these complex back-office processes. The contracts that often represent very high volumes – and therefore very high values – are entered into the system and then processed both logistically and financially.

Interactive Tableau Dashboard gives insight in M2M

This market is a highly volatile high risk business in which all depends on how accurate future prices and future currency exchange rates are predicted. This means the real-time-analysis of data plays a crucial role. The interactive Tableau dashboard in this blog shows the capabilities of Tableau to help traders give insight in their current MarkToMarket position (M2M) and the ability to play with what-if-scenarios such as: what if the currency exchange rate to USDollars changes by 1%, or what if the Market Price drops 2%. The effects on the profit margin is then directly made visible in this analysis.

Minimize risk and maximize profit

Embed this dashboard below in the screens of CTRM and a trader has direct insights in how to manage, hedge and insure contracts in a way to minimize risk and to maximize profit.

This is just to show an example, but of course many more variables can be added to make this insight more complex and thus more detailed. One could think of

  • Interest Rates
  • Spot Rates
  • Volatility or maybe even
  • The average temperature or
  • Humidity.

Include Machine learning

The analysis below becomes even more insightful when the likelihoods of the different what-if scenarios are included. Machine learning can be used for this, given that the relevant variables are included in the model. The model could for example show the most likely scenario, or a bandwidth of most likely scenario’s.

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Auteur RickAuthor: Rick Brobbel
BI Consultant at Cadran Consultancy