ABSTRACT
Monte Carlo analysis uses the process of simulation to achieve a range of solutions to a problem. This technique generally is used to solve problems for which the definition of specific solution equations to calculate a specific answer is either too complex or too cumbersome to be practical. In Monte Carlo analysis, typically (but not necessarily) input variables are represented as distributions of values (see Chapter 12 of this book). Values comprising these distributions represent the range and frequency of occurrence of the possible values for the variables. Also needed are equations that relate the input variables to the output (result or answer) variables.
