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Unformatted text preview: machine 24 Calculating the NPV for the Beta machine 25 Probability distributions for Alpha machine 26 NPV probability distributions for the two machines 27 Simulation Process 1. 1. Identify the problem 2. 2. Develop the simulation model 3. 3. Test the model 4. 4. Develop the experiments 5. 5. Run the simulation and evaluate results 6. 6. Repeat 4 and 5 until results are satisfactory 28 Excel Simulation Example 29 Advantages of Simulation • Solves problems that are difficult or impossible to solve mathematically • Allows experimentation without risk to actual system • Compresses time to show longterm effects • Serves as training tool for decision makers 30 Limitations of Simulation • Does not produce optimum solution • Model development may be difficult • Computer run time may be substantial • Monte Carlo simulation only applicable to random systems 31 Introduction to Crystal Ball 32...
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This note was uploaded on 12/08/2011 for the course ENGINEERIN BURD taught by Professor Benni during the Fall '09 term at Uni. Reykjavik.
 Fall '09
 BENNI

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