Conceptual Questions
docx
School
University of Texas *
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Course
235H
Subject
Industrial Engineering
Date
Apr 3, 2024
Type
docx
Pages
3
Uploaded by studen0345
Question 1
1 / 1 pts
How does increasing the number of trials in a Monte Carlo simulation affect the results?
It decreases the accuracy of the results It has no effect on the results It increases the computational cost without improving accuracy Correct!
It generally increases the accuracy of the results Question 2
1 / 1 pts
Which statement is true about Monte Carlo simulations?
They can precisely predict the timing of future events Correct!
They require assumptions about the distributions of input variables They can only be used in the field of economics and finance They eliminate all uncertainties in model predictions Question 3
1 / 1 pts
Monte Carlo simulations are particularly useful for:
Analyzing systems with a small number of random variables Systems where the law of large numbers is not applicable Correct!
Estimating the impact of risk and uncertainty in quantitative analysis and decision making
Situations where deterministic, not probabilistic, outcomes are required Question 4
1 / 1 pts
What differentiates a Monte Carlo simulation from a deterministic model?
Monte Carlo simulations use historical data exclusively Deterministic models incorporate random variables and probabilities Correct!
Monte Carlo simulations incorporate randomness and probabilities to model
scenarios Deterministic models provide a range of possible outcomes instead of a single solution Question 5
1 / 1 pts
What is the primary purpose of sensitivity analysis?
To determine the best outcome for a given scenario Correct!
To identify how sensitive a model's output is to changes in its inputs To eliminate the need for assumptions in model building To ensure that the model always produces the same result, regardless of input variations Question 6
1 / 1 pts
Which statement best describes sensitivity analysis?
It is a process that guarantees the accuracy of a model's predictions It assesses the likelihood of various possible outcomes
Correct!
It evaluates how changes in input variables affect the outcome of a model or system It is used to predict the exact future value of investments Question 7
1 / 1 pts
The Flaw of Averages says that the average of the model output from a Monte Carlo simulation is often incorrect and misleading.
True Correct!
False
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