![]() Since its introduction in World War II, Monte Carlo simulation has been used to model a variety of physical and conceptual systems. The technique was first used by scientists working on the atom bomb it was named for Monte Carlo, the Monaco resort town renowned for its casinos. ![]() ![]() It shows the extreme possibilities-the outcomes of going for broke and for the most conservative decision-along with all possible consequences for middle-of-the-road decisions. Monte Carlo simulation furnishes the decision-maker with a range of possible outcomes and the probabilities they will occur for any choice of action. The technique is used by professionals in such widely disparate fields as finance, project management, energy, manufacturing, engineering, research and development, insurance, oil & gas, transportation, and the environment. Monte Carlo simulation is a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making.
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