Question

Which of the following best defines Monte Carlo simulation?
a) It’s a tool for building statistical models that characterize relationships among a dependent variable and one or more independent variables.
b) It’s a collection of techniques that seeks to group or segment a collection of objects into subsets.
c) It’s the process of selecting values of decision variables that minimizes or maximizes some quantity of interest.
d) It’s the process of generating random values for uncertain inputs in a model and computing the output variables of interest.

Answer 1

Answer:

answer is D...........

Answer 2

It is the process of generating random values for uncertain inputs in a model and computing the output variables of interest.

• This specific technique is employed to anticipate the chances of potential results when different parameters are involved.
• These scenarios may be used to demonstrate how risk and uncertainty influence forecasting and prediction models.
• The procedure is then repeated, each time with a different set of random values from the probability functions.
• Thus, It's the technique of determining the output variables of interest after generating random values for uncertain inputs in a model.