How much does it cost to pull the event now?
The exposure on a cancelled event is not one number, it is a ladder: what you owe ninety days out is not what you owe inside thirty. Model the timing as its own uncertain input and the answer comes back as a range you can insure against.
Words on this sheet
- Venue: The place an event is held. A venue line is what hiring it costs, usually a fixed amount whatever the turnout.
Operations Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
What If It Has to Be Cancelled?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
- Net loss if cancelled
- $110,840 mean · median $104,242
- P95 loss
- $202,464 the insurance-schedule number
- Provision for the year
- $7,583 expected exposure at 7% odds it happens
- P10 to P90
- $52K to $179K set by when the call is made, not by costs
Three costs and one question about timing. The venue, catering and audio-visual contract releases you at 75% if you call it ninety days out, 40% between thirty and ninety days, and not at all inside thirty. Talent is the same ladder with different rungs. Marketing and production money is already gone whenever you call it. The cancellation window is modeled as a discrete input weighted late, at 25, 35 and 40 percent, because nobody pulls an event while there is still a chance it can run, which is exactly why cancellations land in the expensive window.
Click Run on 20,000 trials and read the outputs as three different questions. The net loss if it happens comes back with a mean of $110,840, a median of $104,242 and a ninety-fifth percentile of $202,464, ranging from $24,217 at best to $303,744 at worst. That is the number for the risk register and the insurance schedule. Expected exposure across the year has a mean of $7,583, and that is the number for the budget as a provision.
They answer different questions, and quoting one where the other belongs is the most common mistake in this whole area. Look at the shape of the net loss and the ladder is visible in it: the distribution is not smooth, it has clusters, one per cancellation window, and the gap between the tenth percentile at $51,873 and the ninetieth at $178,504 is almost entirely a question of when the call is made rather than how much anything costs.
That is the actionable finding. The tornado says the same thing outright: the cancellation window ranks at about 0.94 against about 0.35 for the size of the venue contract itself. A decision rule that forces the call at day ninety, on a trigger you set now, moves the whole distribution left by more than any negotiation on that contract would.
Second run: change the window probabilities to 0.60, 0.30 and 0.10, which is what a written cancellation trigger looks like, and run it again. The mean net loss falls sharply while nothing about your costs has changed at all. What this cannot tell you is whether the cover actually pays. The minimum on the recovery share is zero for a reason: exclusions get argued, and a policy that has never been tested is an assumption.
To adapt it, replace the two ladder rows with the real terms from your venue and talent contracts, put your own committed spend in, and set the cancellation probability from your own history rather than from the 7% default.
The model
It arrives on a tab called Template: Event Cancellation:
| Cancellation window (1 = 90 days out, 2 = 30 to 89 days, 3 = inside 30 days) | 3 |
| Share of the venue and catering contract that is non-refundable | 1 |
| Venue, catering and AV contracted ($) | 185000 |
| Non-refundable venue, catering and AV ($) | 185,000 |
| Marketing and production already spent ($) | 62000 |
| Speaker and talent fees contracted ($) | 48000 |
| Share of talent fees still payable | 1 |
| Talent fees still payable ($) | 48,000 |
| Committed cost if the event is pulled ($) | 295,000 |
| Share of that cost the cancellation cover pays back | 0.55 |
| Net loss if the event is cancelled ($) | 132,750 |
| The event is cancelled (1 = yes) | 0 |
| Expected exposure this year ($) | 0 |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Will the new store pay for its fit-out?Is the New Store Worth Opening?
- How many stores does your pilot really need?How Big Does the Pilot Have to Be?
- Should you drop the slow line?Should We Drop This Line?
- Is a random draw a fair way to split the weekends?Assign the Shifts Without Arguing
- How much of the opening date is just waiting?What Sets the Opening Date?
- Should you make more of your most profitable product?What Should We Make This Week?
Every model like this one, and the method behind them: Monte Carlo simulation.