- The Essay topic: Monte Carlo Method in Simulations
- Class:4IT496 Simulation of Systems (WS 2017/2018)
- Author: Bc. Yauheniya Andreyuk
Monte Carlo simulation is a technique that allows to see all the possible outcomes of the decisions and assess the impact of risk, allowing better decision making under uncertainty. The technique is used by professionals in such fields as finance, project management, energy, manufacturing, engineering, research and development, insurance, oil & gas, transportation, and the environment.
Monte Carlo simulation furnishes the decision-maker with a range of possible outcomes and the probabilities they will occur for any choice of action.. It shows the extreme possibilities—the outcomes of going for broke and for the most conservative decision—along with all possible consequences for middle-of-the-road decisions.
The technique was first used by scientists working on the atom bomb; it was named for Monte Carlo, the Monaco resort town renowned for its casinos. Since its introduction in World War II, Monte Carlo simulation has been used to model a variety of physical and conceptual systems.
- Monte Carlo Simulation. Palisade.com [online]. Available at: http://www.palisade.com/risk/monte_carlo_simulation.asp