When using the Monte Carlo risk approaches… a.The Monte Carlo approach uses the

Question

When using the Monte Carlo risk approaches…

a.The Monte Carlo approach uses the central limit theorem where the moments and variances are taken from each input variable.

b. Monte Carlo simulations are easy to compute without computer based software package

c.The Monte Carlo approach is more complex but it uses random values from input variables and their corresponding distributions in helping to determine the final total cost distribution.

d. The Monte Carlo approach take a long time to compute 1000 or larger sample runs in its computer based applications.

Explanation / Answer

The Monte Carlo approach is more complex but it uses random values from input variables and their corresponding distributions in helping to determine the final total cost distribution.

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