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Microsoft® Excel® 2010: Data Analysis and Business Modeling
book

Microsoft® Excel® 2010: Data Analysis and Business Modeling

by Wayne L. Winston
January 2011
Beginner to intermediate content levelBeginner to intermediate
720 pages
23h 29m
English
Microsoft Press
Content preview from Microsoft® Excel® 2010: Data Analysis and Business Modeling

Chapter 69. Introduction to Monte Carlo Simulation

Questions answered in this chapter:

  • Who uses Monte Carlo simulation?

  • What happens when I type =RAND() in a cell?

  • How can I simulate values of a discrete random variable?

  • How can I simulate values of a normal random variable?

  • How can a greeting card company determine how many cards to produce?

Data analysts would like to accurately estimate the probabilities of uncertain events. For example, what is the probability that a new product’s cash flows will have a positive net present value (NPV)? What is the risk factor of an investment portfolio? Monte Carlo simulation enables you to model situations that present uncertainty and then play them out on a computer thousands of times.

Note

The term Monte Carlo ...

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Publisher Resources

ISBN: 9780735656864Purchase book