CMA Final · Strategic Cost Management · Simulation
A Monte Carlo simulation uses two-digit random numbers 00-99. Daily demand of a dairy booth has probabilities: 100 litres 0.20, 200 litres 0.50, 300 litres 0.30. Which random-number range should be assigned to 200 litres?
The range 20-69 is correct. The first 20 numbers (00-19) go to 100 litres, so 200 litres, with probability 0.50, takes the next 50 numbers, 20 to 69. The remaining 70-99 go to 300 litres.
- A20-69Correct
- B20-70
- C00-49
- D21-70
Explanation
Cumulative probabilities are 0.20, 0.70 and 1.00. With numbers 00-99, 100 litres gets 00-19, 200 litres gets 20-69 (50 numbers), and 300 litres gets 70-99. Option 20-70 has 51 numbers, and 21-70 starts a number late and leaves 20 unassigned.
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