Question 1

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.

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A)   Approximately 10% of the numbers will be between 0.0 and 1.0
B)   Approximately 20% of the numbers will be between 0.50 and 0.70
C)   Approximately 40% of the numbers will be between 0.20 and 0.60
D)   Approximately 60% of the numbers will be between 0.15 and 0.75
E)   All of these options are false A

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   A and B represent the 95% confidence interval
B)   A and B are the mean and standard deviation,respectively.
C)   A and B are the mean and variance,respectively.
D)   no value can be less than A or greater than B.

Question 6

A continuous probability distribution is characterized by a:

Accepted Answer

A)   mean and a standard deviation.
B)   mean and a variance.
C)   density function.
D)   histogram

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

A)   This quantity is the optimal order quantity.
B)   This quantity might be the optimal order quantity,but we also need to consider the company's attitude toward risk.
C)   This is not necessarily the optimal order quantity,because it may have produced the largest profit by luck.
D)   We can't infer anything.

Question 10

We sometimes use discrete distributions in place of continuous distributions:

Accepted Answer

A)   because they are more accurate.
B)   because they are more simple.
C)   when we don't know the mean and variance of the distribution.
D)   when we need to generate a histogram

Question 11

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

Accepted Answer

A)   300 + x
B)   500 - x
C)   300 + 200 x
D)   500 - 200 x
E)   300 + 500 xGenerate a set of 40 random numbers in a column in an Excel spreadsheet by using RAND function.Fix the set of random numbers by copying the column to another column and using the "Paste Special" command with the "Values" option selected.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)   symmetric distribution
B)   positively skewed distribution
C)   negatively skewed distribution
D)   All of these options

Question 17

Which of the following statements are true?

Accepted Answer

A)   A probability distribution is symmetric (around some point) if the distribution to the left of the point is a mirror image of the distribution to the right of the point.
B)   We say a distribution is skewed to the right (or positively skewed) if the "longer tail" is the right tail.
C)   We say a distribution is skewed to the left (or negatively skewed) if the "longer tail" is the left tail.
D)   All of the above

Question 18

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

Accepted Answer

A)   risk analysis
B)   @RISK investment
C)   unbounded risk
D)   None of the above

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)   the mean of the probability distribution.
B)   a scenario.
C)   a best guess.
D)   all of these options.

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: