Using the following link answer the questions listed below. https://www.vertex42

Question

Using the following link answer the questions listed below.

https://www.vertex42.com/ExcelArticles/mc/

If possible, please replicate the problem using Python and provide the following details:

Provide an explanation for the Monte Carlo simulation Explanation of the difference between Monte Carlo and Deterministic models Listing of the steps in setting up a Monte Carlo simulation Write down the question being investigated Write down the model and specify the type of model being used List the variables with random inputs List he Excel random functions used List all excel functions used and explain their use Histogram generated (snip) and statistic that describe the histogram Statistics and explanation of each statistic generated Conclusion with supporting statistics The tutorial lists several other distributions List the distributions and explain their purpose Identify the model Identify the random inputs List and explain the Python functions used to simulate the random inputs Provide a Histogram Provide Cumulative Histogram Provide the following statistics Mean Standard deviation Standard Error Range 95 % Confidence interval

Explanation / Answer

Question 1

A Monte Carlo method is the statistical technique of simulation process which involves the use of random numbers and probability for solving the problems. In this technique we use the random numbers and probabilities from specific distributions for the purpose of simulation of the data. This simulation method is very useful in the random generation process and its related probability task.

Question 2

Deterministic models are the mathematical models in which there is no use of any random numbers and that’s why we get the same results even though if we re-calculate the numbers so many times. The Monte Carlo simulation method is a deterministic model which uses the random numbers as inputs. These types of simulation methods are useful when the model is complex, non-linear, or it contains more uncertain parameters.

Question 3

Steps for the Monte Carlo simulation are given as below:

First step: Create a parametric model

Second step: Generate the set of random inputs

Third step: Evaluate the model

Fourth step: Repeat the steps again and again

Fifth step: Analyze the results

Question 4

The question being investigated is given as below:

The company wants to study the profit from the market for the new gadget considering many uncertainties associated with market size, expenses, and revenue.

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