MKTG 2030 Lecture Notes - Lecture 7: Triangular Distribution, List Of Excel Saga Characters, Probability Distribution

• School: York University
• Department: Marketing
• Course: MKTG 2030
• Professor: Ben Kelly

Document Summary

Introduction to simulation using risk solver platform. In many spreadsheets, the value for one or more cells representing independent variables is unknown or uncertain. As a result there"s uncertainty about the value that the dependent variable will assume. Simulation can be used to analyze these types of models. Random variable is any variable whose value can"t be predicted or set with certainty. Decisions made on the basis of uncertain info often involve risk (i. e. the potential for loss) Suppose an investment is expected to return ,000 in two years. Alternatives with the same expected value may involve different levels of risk. Best case- plug in the most optimistic values for each of the uncertain cells. Worst case- plug in the more pessimistic values for each of the uncertain cells. Possible performance measure distributions within a range: Plug in different values for the uncertain cells and see what happens. This is easy to do with spreadsheets.