The Rapid Recursive® Toolbox for MATLAB® provides tools that compose, error-check, solve using recursive methods, and report the results of sequential decision problems. This software is built on the patent-pending Rapid Recursive method, which mimics the way people naturally approach decision problems. The toolbox has applications in a wide variety of fields, including management, investment, military strategy, medical, and family decisions, and more. You or your organization can benefit from using the toolbox by increasing revenue, reducing costs, and avoiding unnecessary risks.
Recursive methods have greater power to properly compose and solve decision problems involving real options and asymmetric risks than traditional tools such as spreadsheet software, Monte Carlo simulations, and decision trees. The Rapid Recursive® Toolbox gives users:
- The ability to compose and solve decision problems involving real options, interactions between decisions and market conditions, and asymmetric risks.
- Native capability to analyze hundreds, or even thousands, of possible scenarios.
- Patent-pending capability to compose, error-check, solve, and report the results of sequential decision problems.
Getting your data into and out of the Rapid Recursive® Toolbox is quick and painless thanks to the following features:
- Straightforward ability to import from and export to a variety of formats (including .xls, .csv, XML, CDF, and HDF).
- Ability to use various MATLAB® data structures to share data with other MATLAB® users and to export or import these data to users of other statistical, financial, scientific, and technical software in a number of possible formats.
Included Solution Templates for Example Decision Problems
Solution Templates demonstrate how the Rapid Recursive® toolbox can be used to compose and solve valuation and decision support problems. All Solution Templates are provided in open-code format that can be adapted by the user to quickly address specific decision problems. The Rapid Recursive® Toolbox currently includes the following Solution Templates:
- Auto Market Share: A large manufacturer of consumer goods such as automobiles and trucks considers increasing its investment in product development. The new investment could increase its market share in the future, but will also reduce its profits immediately. The management is considering which investment strategy maximizes the value of the company.
- Basic Black Swan: A manager or investor must decide whether to operate in the normal manner; operate but pay extra to improve the chances of greater earnings in the future (a decision that could represent a discretionary expense or investment); or sell an interest in a business, operation, or similar enterprise. Market conditions, which are outside the control of this person, could improve (increasing the value of the investment), or decline. In one state, the entire investment is wiped out.
- Beverages Wholesaler: A person considering acquiring or investing in an alcoholic beverage wholesaler that operates in a moderately strong market wishes to know the value of the wholesaler if managed in an effective manner.
- Classic Reinvestment Problem: The investor has to choose among four different investment actions in an uncertain economic environment. The value of the investment opportunity depends on both likely earnings in the future and the choices available to the investor.
- Job Loss Risk: An employee is considering making a major purchase or investment, and knows that there is a significant risk of losing his or her job in the next year. In the standard version of the problem, the employee believes his or her current income (including expected future wage increases) is sufficient to incur the debt necessary to fund the major purchase. However, should the employee lose his or her current job, the employee will incur some lost earnings while searching for a new job, and may not find another one that provides the same level of income.
- Machine Replacement: A company has a large number of assets that are used in the business. These could be computers, engines, machines, structures under heavy use. The company management must decide whether to operate and repair these machines, or to replace them. Once a machine is replaced, it needs less repairs than an older machine. However, replacement is more expensive than repairs.
- Operate or Abandon: An operating company is facing declining operating profits on a specific business operation, due to a secular decline in an important state variable. The company management must decide whether to continue to operate or to shut down and accept a salvage value. Once the operation is abandoned, it cannot be reopened.
- Rental Property Valuation: The model takes the perspective of a landlord. Every month the landlord receives an offer of rent drawn from a uniform distribution. The landlord can accept or reject this offer. If they reject. they pay a search cost and receive another rental offer next period, drawn independently from the same distribution. If the landlord accepts the offer, they get that amount every period until there is a separation.
- Startup Entrepreneur: An entrepreneur that owns a company that is not yet profitable is considering accepting an equity investment from a venture capitalist, which will add more capital to the company (and increase its chances of becoming profitable) but will dilute the entrepreneur’s stake in the company, and may also give preference in any future liquidation event to the VC over founders. This problem focuses on the decision facing the entrepreneur: whether to invest more in the firm, accept an investment from a venture capitalist, do nothing, or exit.
- Startup Investor: An investor is valuing a startup company without a track record of profitable operations, based on the stage of the company, the future prospect of the business, and the availability of selling the stake in the company to another firm or set of investors. This problem focuses on the decision facing the investor: whether to invest more in the firm, invest a lot more, do nothing, or exit.
- Unemployment and Policy Risk: A manager of a company has to decide the number of employees to maintain at the company considering the current economic conditions and government policies, as well as the risk that the policies could change. This model evaluates the decision to hire, layoff, or postpone workers as uncertainty about policies that may impose greater costs on employers change over time.
Industrial-Strength MATLAB® Platform
- Creating 2 and 3 dimensional matrices.
- Performing arithmetic operations, e.g. adding and subtracting scalars, vectors, and matrices.
- Creating a string (also known as a character array).
- Creating cell and structure arrays.
- Accessing data in cell and structure arrays.
- Clearing the workspace.
- Running a script.
- Writing a loop.
- Writing a logical decision statement (if … else …).
- Extensive error-checking tools that provide highly customized error messages.
- Thorough input validation with helpful error messages to help during the composition process.
Available Graphical User Interfaces
- Compose Tool: an interactive graphical user interface (GUI) that allows users to compose and solve a sequential decision problem without needing to program code.
- Graphical User Interfaces for selected solution templates (see below).
Extensive Documentation Including User’s Guide and Guide to Recursive Models
- Information on the theory behind sequential decision problems and recursive models, as well as practical guidance on how to use the Rapid Recursive® Toolbox to model them.
- Complete documentation including summaries, descriptions of key input and output arguments, and example uses for every function in the toolbox.
- A guide to the Solution Templates.
Robust Solution Algorithms
- Two widely-used algorithms for solving discrete‑time sequential decision problems: value function iteration and policy iteration.
- The industrial-strength calculation, data handling, and visualization capabilities of MATLAB®.
- The ability to extend the power of the Rapid Recursive® Toolbox by using other toolboxes and functionality within MATLAB®.
Reporting Tools and Multiple Output Formats
- Templates that publish a report summarizing a sequential decision problem–including its description, key inputs, and solution—in .pdf (Adobe Acrobat), HTML (web page), XML, .doc (Microsoft Word), and .ppt (Microsoft PowerPoint) formats—with a single click.
- Tools that report results in customized tables and graphs.
Other Product Features
- A specification sheet for the Rapid Recursive® Toolbox can be found here, which includes a list of software and hardware requirements.
- If you do not have a supported version of MATLAB®, Supported Intelligence can obtain a trial of MATLAB® for you. Simply contact us at help@SupportedIntelligence.com. Alternatively, you can can purchase MATLAB® or request a free trial at The MathWorks website.
During the development and testing process, Supported Intelligence will ensure that all future versions of the Rapid Recursive® Toolbox, beginning with version 1.3.0, are compatible with the current and at least two prior MATLAB® releases, determined at the time of release of the Rapid Recursive® Toolbox. Supported Intelligence will also ensure that the current version of the Rapid Recursive® Toolbox is fully compatible with the current MATLAB® release at all times, which will be accomplished through incremental releases of the Rapid Recursive® Toolbox as necessary.
It is expected that majority of the Rapid Recursive® Toolbox features may work on other versions of MATLAB®, but only those described above will be tested and guaranteed.
The Rapid Recursive® toolbox license agreement reserves to the licensed user the rights to use and adapt a Solution Template, and report the results to others. Of course, it prohibits the redistribution or reverse engineering of the source code, as well as other violations of the intellectual property and other rights of the software’s creators.
The Supported Intelligence® Service Desk is highly responsive to the needs of our end users. It is staffed with well-trained, U.S.-based agents. See our Support page for more information.
The Rapid Recursive Toolbox is available for license to professionals and consultants, small groups within an organization, nonprofit organizations, students, and academics. Supported Intelligence is confident that skilled users will see the benefits of the product and offers interested persons a free trial. SEe pricing options and information on available trials below.