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CMA Intermediate · Operations Management and Strategic Management · Simulation and Line Balancing

In a Monte Carlo simulation of a demand process, what is the main purpose of assigning random number ranges to the values of a variable?

Random number ranges are assigned in proportion to each value's probability, so that over many trials the simulated values occur with frequencies matching the observed probability distribution. Equal ranges would misrepresent the process.

  1. ATo make each value occur with a frequency matching its probabilityCorrect
  2. BTo make every value equally likely to occur
  3. CTo remove the effect of chance from the model
  4. DTo fix the demand at its expected value

Explanation

Random number intervals are allocated in proportion to the probability of each value. A value with probability 0.30 gets 30 of 100 two-digit numbers. Giving equal ranges would distort the distribution, so option B is wrong.

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