Using a Simulation Model to Gather a Year of Operating

question 21

Multiple Choice

Using a simulation model to gather a year of operating data in a few minutes is known as:

• A) historical search data collection.
• B) Monte Carlo optimization.
• C) sub-optimization.
• D) time compression.

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Definitions:

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two products that may be produced with available resources and technology.

Increasing Opportunity Costs

The principle that as you increase production of one good, the opportunity cost of producing an additional unit of this good increases.

Constant Opportunity Costs

A condition in which the opportunity cost of producing one more unit of a good remains constant irrespective of the quantity.

Decreasing Opportunity Costs

A situation where the cost of forgoing the next best alternative decreases as more units of a product or service are produced.