Exam 15: Introduction to Simulation Modeling

The binomial distribution can be well approximated by the normal distribution when the number of trials n is sufficiently small and the probability of success p is not too close to 0 or 1.

Which of the following statements is (are)false regarding the numbers generated by the RAND function in Excel?

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

A common guideline in constructing confidence intervals for the mean is to place upper and lower bounds one standard error on either side of the average to obtain an approximate 95% confidence interval.

A probability distribution is bounded if there are values A and B such that:

A continuous probability distribution is characterized by a:

Excel's built-in functions,along with the RAND function,can be used to generate random numbers from many different types of probability distributions.

A probability distribution is bounded if there are values A and B such that only one possible value can be less than A or greater than B.

Suppose you run a simulation model several times with different order quantities.What can we infer about the quantity that maximizes the output,the company's profit?

We sometimes use discrete distributions in place of continuous distributions:

Assume that x is a random number between 0 and 1,and that the number of units expected to be sold is uniformly distributed between 300 and 500.Then,sales are given by the expression

When you try to find the most appropriate input probability distribution in a simulation model,you first have to choose the most appropriate family,and then you have to select the most appropriate member of that family

Correlation between two random input variables might not change the mean of an output,but it can definitely affect the variability and shape of an output disbribution.

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

If we want to model a random stock price,we should do so with an unbounded symmetric probability distribution.

If we want to model the time it takes to serve a customer at a bank,we will probably choose

Which of the following statements are true?

Many companies have used simulation to determine which of several possible investment projects they should choose.This is often referred to as

Spreadsheet simulation modeling is quite similar to the other modeling applications in that it begins with input variables and then relates these with appropriate Excel formulas to produce output variables of interest.

Each different set of values obtained for the uncertain quantities in a simulation model can considered to be: