Simulation analysis
A)permits the calculation of expected value and standard deviation.
B)does not permit the calculation of expected value and standard deviation.
C)is too complex to ever be used in actual business situations.
D)does not consider probabilities.

Question

Quizplus · Accepted Answer

Simulation analysis involves running a model or scenario multiple times to generate a range of possible outcomes. By doing so, it allows the calculation of expected value (the average outcome) and standard deviation (the measure of variability around the expected value). Therefore, choice A is correct. Option B is incorrect because simulation analysis permits the calculation of expected value and standard deviation. Option C is incorrect because while simulation analysis can be complex, it is commonly used in business situations. Option D is also incorrect because simulation analysis considers probabilities in generating a range of possible outcomes.

Simulation Analysis