A company that manufactures automobile parts is weighing the possibility of investing in an FMC (Flexible Manufacturing
Question:
An economic analyst is hired to estimate the desired parameter, AW. He concludes that the scenario presented to him is suitable for Monte Carlo simulation (method of statistical trials) because there are uncertainties in three variables and the direct analytical approach is virtually impossible.
The company has done a preliminary economic study of the situation and provided the analyst with the following estimates:
All the elements subject to variation vary independently. Use Monte Carlo simulation to generate 10 AW outcomes for the proposed FMC. What is the standard deviation of the outcomes?
Monte Carlo simulationMonte Carlo simulation is a technique used to understand the impact of risk and uncertainty in financial, project management, cost, and other forecasting models. A Monte Carlo simulator helps one visualize most or all of the potential outcomes to... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Question Posted: