Issues in Simulation Modeling
I am beginning to believe that most of the phenomena in our world are too complex to be modeled using closed-form analytic models. Even if you could identify the variables, the inter-relationship between the variables are forever changing, and the variables themselves might change. The natural tendency is to turn to computer simulation modeling, where we generate data for the simulation, run the simulation and analyze the results.. From this we can calculate probability of outcomes and the confidence intervals. Computer simulation is widely used in many fields from the simulation of manufacturing processes, to military planning and econometric forecasting, and the valuation of financial derivatives. On a more pedestrianlevel it can help estimate waiting times in queues, estimate the resources required for a project or help with decision-making when there are several options. The exponential increase in the speed and power of today's computers makes simulation less of a chore than i...