Practical Monte Carlo Simulation with Excel Part 1

Monte Carlo Simulation is a numeric technique that allows the analyst to simulate a specific formulation by running the computation a large number of times (typically in the thousands). In each model, there will be several input variables. Each input variable will be modeled to behave in a way that represents reality. This could be a uniform distribution, a normal distribution, a Binomial or a Weibull distribution. For each run, the model will use a single random sample from these distributions …