Exam 10: Introduction to Simulation Modeling

The primary difference between simulation models and other types of spreadsheet models is that simulation models contain ____:

A distribution for modeling the time it takes to serve a customer at a bank is probably:

A correlation matrix must always have 1's along its diagonal (because a variable is always perfectly correlated with itself)and numbers between -1 and +1 elsewhere.

Exhibit 10-1 A company is in the planning phase of constructing a new production facility.It wants to build a simulation model for the economics of the facility,and one key uncertain input is the construction cost.For each of the scenarios in the questions below,choose an "appropriate" distribution,together with its parameters,and explain your choice. -Refer to Exhibit 10-1.Company management currently has no idea what the distribution of the construction cost is.All they can state is that "we think it will be somewhere between $5,000,000 and $8,000,000."

Correlation between two random input variables may change the mean of an output,but it will not affect the variability and shape of an output distribution.

When n is reasonably large and p isn't too close to 0 or 1,the binomial distribution can be well approximated by which of the following distributions?

RISKSIMTABLE is an @RISK function for running several simulations simultaneously,one for each setting of an input or decision variable.

Exhibit 10-1 A company is in the planning phase of constructing a new production facility.It wants to build a simulation model for the economics of the facility,and one key uncertain input is the construction cost.For each of the scenarios in the questions below,choose an "appropriate" distribution,together with its parameters,and explain your choice. -Refer to Exhibit 10-1.A little later on,management still believes the upper and lower bounds for the costs are $5M and $8M,but now they can also state that "we believe the most likely value is about $6.5M."

Exhibit 10-2 A large apparel company wants to determine the profitability of one of its most popular products,a particular type of jacket.Demand is uncertain,due to economic conditions,competition,weather and other factors,and the following probability distributions have been estimated for each of the company's three regions: -Refer to Exhibit 10-2.What is the probability that the apparel company will exceed a profit at least $0.5M from the jacket line?

Exhibit 10-2 A large apparel company wants to determine the profitability of one of its most popular products,a particular type of jacket.Demand is uncertain,due to economic conditions,competition,weather and other factors,and the following probability distributions have been estimated for each of the company's three regions: -Refer to Exhibit 10-2.Total sales is a product of three different types of input distributions.What does the output distribution look like? What is the standard deviation of the total sales? What are the 5th and 95th percentiles of this distribution?