Which of the Following Are Viewed as Advantages of Simulation

question 23

Multiple Choice

Which of the following are viewed as advantages of simulation in operations management decision making?

• A)A simulation can be used in training courses as though it were a game
• B)A significant amount of computer time can be utilized running simulations
• C)The technique of simulation requires innovation as it lacks a standardized approach
• D)Simulation may be equally precise but less accurate than a mathematical analysis
• E)Simulations are inexpensive and easy to set up and run

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Definitions:

Break-Even Sales

The amount of sales revenue needed to cover all fixed and variable costs, resulting in no profit or loss.

Variable Production Costs

Costs that fluctuate directly with the level of output, including materials, labor, and other expenses that vary with production volume.

Fixed Cost

Expenses that remain constant in total regardless of changes in the level of production or sales volume, such as rent, salaries, and insurance.

Contribution Margin Ratio

A financial metric that shows what portion of sales revenue is available to cover fixed costs and generate profit after variable costs have been paid.