Simulation

What Is Simulation?
Why Is It Important?
The Connection Between Simulation & Scenario Planning
Appropriate Use

The Connection Between Simulation & Scenario Planning
Computer simulation provides a very powerful way to evaluate the possible outcomes of decisions. But there are two potential dangers:

• Design Flaws
• Inappropriate Use

Design Flaws
Simulation models are very effective at modeling how well defined processes work. The usefulness of the models is limited by the skill of the designer.

For example, no one denies that spreadsheets are useful. But they also lowered the technical barriers facing people who wanted to do financial modeling. As a result, the first few years after the introduction of spreadsheets, the average quality of financial models plummeted. Today, many financial models are not only useless, but downright harmful to decision-makers who use them to justify poor decisions.

Inappropriate Use
Let's suppose you have a computer simulation model...What shouldn't you do with it? Attempt to make predictions about the future!

Until about 10 years ago, there were various approaches used in anticipating the future, from computer-based mathematical forecasting models to Delphi surveys. All of them were attempts to predict, all of them were scientifically rigorous, and all of them failed because the future is unpredictable.

It is simply not possible to predict the future with certainty.

Appropriate Use ... click here

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