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Monte Carlo Simulation with Excel

This document discusses using simulation and random number generation to model probabilistic variables in inventory modeling spreadsheets. It describes how to generate random numbers from uniform, normal and discrete distributions in Excel and use Monte Carlo simulation to calculate quantities of interest. It also covers using the Solver tool to minimize or maximize a target cell by varying decision variable cells, noting Solver only finds local rather than global optima.

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Alaje Aadey
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2 views3 pages

Monte Carlo Simulation with Excel

This document discusses using simulation and random number generation to model probabilistic variables in inventory modeling spreadsheets. It describes how to generate random numbers from uniform, normal and discrete distributions in Excel and use Monte Carlo simulation to calculate quantities of interest. It also covers using the Solver tool to minimize or maximize a target cell by varying decision variable cells, noting Solver only finds local rather than global optima.

Uploaded by

Alaje Aadey
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

SIMULATION

INVENTORY

RANDOM NUMBERS
SIMULATION FOR UNIFORM, NORMAL AND DISCRETE DISTRIBUTIONS USE EXCEL TO GENERATE RANDOM SIMULATION MONTE CARLO DESIGN SPREAD SHEET WITH THESE VALUES FOR PROBABILISTIC VARIABLES CALCULATE QUANTITY OF INTEREST

SOLVER
USE SOLVER TO MINIMIZE OR MAXIMIZE CELL OF INTEREST BY VARYING CELLS WITH DECISION VARIABLES SOLVER ONLY GIVES LOCAL MINIMUMS AND MAXIMUMS

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