In a Simulation Process, the Error of the Estimates of the Output

question 40

Multiple Choice

In a simulation process, the error of the estimates of the output can be reduced by

• A)increasing the range of possible values for the random variables.
• B)increasing the number of random variables.
• C)increasing the number of trials per simulation.
• D)conducting regression analysis to forecast values.

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Definitions:

Mixed Costs

Expenses that have both fixed and variable components, changing in total with activity level but not directly proportional.

Variable Costs

Variable costs are expenses that change in proportion to the activity or volume of a business, such as raw materials and labor costs that vary with production levels.

Contribution Margin

Contribution margin represents the difference between sales revenue and variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Sales Revenue

The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.