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Running head: WEEK 5 ASSIGNMENT: SIMULATIONS 1 Week 5 Assignment: Simulating Events in Excel American Public University
WEEK 5 ASSIGNMENT: SIMULATIONS 2 Week 5 Assignment: Simulating Events in Excel Simulations are utilized across many business sectors for various reasons from improving operations to determining a strategic course of action (Bell & Zaric, 2013). Prior to computers, these simulations may have been unheard of, but after the 1950s, these computer simulations, especially those using Microsoft Excel, have been used by many companies across many different sectors. These simulations can mimic future scenarios and outcomes given a specific or even non-specific set of parameters (Bell & Zaric, 2013). One of the easiest and potentially cheapest options to run these simulation models are in Microsoft Excel using the various functions built in, such as the RAND function and the NPV function. This paper will explore three specific models to demonstrate how Excel can be used to predict future outcomes. Simulation 1: Single Die Roll The first simulation is a simple example of rolling one die twice and adding the results together for one number. This is easily done by using a variation of the RAND() function in excel. The outcomes of this can be viewed in the attached spreadsheet or in Appendix A. In this specific case, the formula =INT(6*RAND()+1) was used in 23 rows of data. The “int” part of the formula tells Excel that it should be an integer. The 6 is because die are typically six-sided; a different number could be used for a different number sided die if necessary. The RAND function generates a random number and the +1 is added because the RAND function will generate a number between 0 and 1, and a 6-sided die only rolls one through six, not a zero. As such, this specific formula tells Excel to generate a random number between one and six. This formula was used for column A and column B. In column C, a simple addition was used to add