Suppose You Run a Simulation Model Several Times with Different

question 9

Multiple Choice

Suppose you run a simulation model several times with different order quantities.What can we infer about the quantity that maximizes the output,the company's profit?

• A) This quantity is the optimal order quantity.
• B) This quantity might be the optimal order quantity,but we also need to consider the company's attitude toward risk.
• C) This is not necessarily the optimal order quantity,because it may have produced the largest profit by luck.
• D) We can't infer anything.

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Definitions:

Balance Sheet

A financial report detailing a company's assets, liabilities, and equity at a particular moment, serving as a foundation for calculating return rates and assessing its financial structure.

Administration Expenses

Expenses related to the general operation of a business, including executive salaries, HR, and IT, not directly tied to the production or selling of goods/services.

Operating Expense

Expenses that a business incurs through its normal business operations, often excluding the cost of goods sold, financing costs, and taxes.

Income Statement

A document presenting a business's income and outgoings within a set timeframe, leading to a declaration of either profit or loss.