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.

Question

Quizplus · Accepted Answer

While running a simulation multiple times with different order quantities can give an idea of the range of profits that can be made, it does not necessarily mean that the highest profit made from the simulation is the optimal order quantity. Other factors such as company's risk attitude, inventory holding costs, lead time, and demand uncertainty need to be considered to determine the optimal order quantity. Therefore, choice B is the best answer.

Suppose You Run a Simulation Model Several Times with Different