# Simulations Essay

2993 WordsFeb 1, 201412 Pages
Simulation Chapter 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14-1 Chapter Topics ■ The Monte Carlo Process ■ Computer Simulation with Excel Spreadsheets ■ Simulation of a Queuing System ■ Continuous Probability Distributions ■ Statistical Analysis of Simulation Results ■ Crystal Ball ■ Verification of the Simulation Model ■ Areas of Simulation Application Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14-2 Overview ■ Analogue simulation replaces a physical system with an analogous physical system that is easier to manipulate. ■ In computer mathematical simulation a system is replaced with a mathematical model that is analyzed with the computer. ■ Simulation offers a means of analyzing very complex systems that cannot be analyzed using the other management science techniques in the text. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14-3 Monte Carlo Process ■ A large proportion of the applications of simulations are for probabilistic models. ■ The Monte Carlo technique is defined as a technique for selecting numbers randomly from a probability distribution for use in a trial (computer run) of a simulation model. ■ The basic principle behind the process is the same as in the operation of gambling devices in casinos (such as those in Monte Carlo, Monaco). Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14-4 Monte Carlo Process Use of Random Numbers (1 of 10)  In the Monte Carlo process, values for a random variable are generated by sampling from a probability distribution. Example: ComputerWorld demand data for laptops selling for \$4,300 over a period of 100 weeks.  Table 14.1 Probability Distribution of Demand for Laptop PC’s Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14-5 Monte