What Is the First Step in a Monte Carlo Analysis

question 54

Multiple Choice

What is the first step in a Monte Carlo analysis?

• A)Determine the probability distribution of each variable. 
• B)For each variable, such as the time estimate for a task, select a random value based on the probability distribution for the occurrence of the variable. 
• C)Assess the range for the variables being considered. 
• D)Run a deterministic analysis or one pass through the model using the combination of values selected for each one of the variables.

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Definitions:

Organizational Culture

The set of shared beliefs, values, norms, and practices that influences the behavior of members of an organization.

Management Philosophy

A belief system or set of principles that influence how an organization is managed and how it makes decisions.

External Adaptation

The process by which an organization adjusts its strategies, goals, and processes in response to changes in its external environment.

Top Managers

Senior executives responsible for the strategic direction and overall success of an organization, typically including roles such as CEO, CFO, and COO.