Simulation Modeling Using @RISK: Updated for Version 4
PREFACE 1. WHAT IS SIMULATION? Actual Applications of Simulation / What's Ahead? / Simulation Models Versus Analytic Models 2. RANDOM NUMBERS -- THE BUILDING BLOCKS OF SIMULATION PROBLEMS 3. USING SPREADSHEETS TO PERFORM SIMULATIONS Example 3.1: The Newsvendor Problem / Finding a Confidence Interval for Expected Profit / How Many Trials Do We Need? / Determination of the Optimal Order Quantity / Using Excel Data Tables to Repeat a Simulation / Performing the Newsvendor Simulation with the Excel Random Number Generator / Problems 4. AN INTRODUCTION TO @RISK Simulating the Newsvendor Example with @RISK / Explanation of Statistical Results / Conclusions 5. GENERATING NORMAL RANDOM VARIABLES Simulating Normal Demand with @RISK / Using the Graph Type Icons / Placing Target Values in the Statistics Output / Estimating the Mean and Standard Deviation of a Normal Distribution / Problems 6. APPLICATIONS OF SIMULATION TO CORPORATE FINANCIAL PLANNING Using the Triangular Distribution to Model Sales / Sensitivity Analysis with Tornado Graphs / Sensitivity Analysis with Scenarios / Alternative Modeling Strategies / Problems 7. SIMULATING A CASH BUDGET Example 7.1: Cash Budgeting / Problems 8. A SIMULATION APPROACH TO CAPACITY PLANNING Example 8.1: Wozac Capacity Example / Problems 9. SIMULATION AND BIDDING Uniform Random Variables / A Bidding Example / Problems 10. DEMING'S FUNNEL EXPERIMENT Simulating Rule 1 (Don't Touch That Funnel!) / Simulating Rule 2 / Comparison of Rules 1-4 / Lesson of the Funnel Experiment / Mathematical Explanation of the Funnel Experiment / Problems 11. THE TAGUCHI LOSS FUNCTIONS Using @RISK to Quantify Quality Loss / Problems 12. THE USE OF SIMULATION ON PROJECT MANAGEMENT The Widgetco Example / Estimating Probability Distribution of Projected Completion Time / Determining the Probability That an Activity is Critical / The Beta Distribution and Project Management / Problems 13. SIMULATING CRAPS (AND OTHER GAMES) Example 13.1: Simulating Craps / Confidence Interval for Winning at Craps / Problems 14. USING SIMULATION TO DETERMINE OPTIMAL MAINTENANCE POLICIES Example 14.1 / Problems 15. USING THE WEIBULL DISTRIBUTION TO MODEL MACHINE LIFE Example 15.1: Simulating Equipment Replacement Decisions / Problems 16. SIMULATING STOCK PRICES AND OPTIONS Modeling the Price of a Stock / Estimating the Mean and Standard Deviation of Stock Returns from Historical Data / What Is an Option? / Pricing a Call Option / Example 16.1a: Pricing a European Call Option with @RISK / Analyzing a Portfolio of Investments / Example 16.1b: Simulating Portfolio Return / Problems 17. PRICING PATH-DEPENDENT AND EXOTIC OPTIONS Example 17.1: Pricing a Path Dependent Option / Problems 18. USING IMMUNIZATION TO MANAGE INTEREST RATE RISK Duration / Convexity / Immunization Against Interest Rate Risk / Example 18.1: Immunization Using Solver / Better Models for Interest Rate Risk / Problems 19. HEDGING WITH FUTURES Hedging with Futures: The Basics / Modeling Futures Risk with @RISK / Problems 20. MODELING MARKET SHARE Example 20.1a: Market Share Simulation / Is Advertising Worthwhile? / Example 20.1b: Advertising Effectiveness / To Coupon or Not to Coupon? / Example 20.1c: Should Coke Give Out Coupons? / Problems 21. GENERATING CORRELATED VARIABLES: DESIGNING A NEW PRODUCT Example 21.1 / Problems 22. SIMULATING SAMPLING PLANS WITH THE HYPERGEOMETRIC DISTRIBUTION Example 22.1: Simulating a Sampling Plan / Problems 23. SIMULATING INVENTORY MODELS Example 23.1: Simulating a Periodic Review Inventory System / Problems 24. SIMULATING A SINGLE-SERVER QUEUING SYSTEM Example 24.1: Queuing Simulation in @RISK / Estimating the Operating Characteristics of a Queuing System / Problems