Suppose you run a simulation model several times with different order quantities.What can we infer about the the quantity that maximizes the output,the company's profit?
A)This quantity is the optimal order quantity.
B)This quantity might be the optimal order quantity,but we also need to consider the company's attitude toward risk.
C)This is not necessarily the optimal order quantity,because it may have produced the largest profit by luck.
D)We can't infer anything.

Question

Quizplus · Accepted Answer

Running a simulation model with different order quantities can provide valuable information about the range of outcomes and potential risks associated with each quantity. However, it is important to consider the company's attitude toward risk as well as other factors such as inventory holding costs, lead times, and demand variability when determining the optimal order quantity. Therefore, choice B, which acknowledges the need to consider risk and other factors, is the best option.

Suppose You Run a Simulation Model Several Times with Different