Introduction to Monte Carlo simulation

This article was adapted from Microsoft Office Excel 2007 Data Analysis and Business Modeling by Wayne L. Winston. Visit Microsoft Learning to learn more about this book.
This classroom-style book was developed from a series of presentations by Wayne Winston, a well known statistician and business professor who specializes in creative, practical applications of Excel. So be prepared — you may need to put your thinking cap on.

In this article

---

• Overview
• Who uses Monte Carlo simulation?
• What happens when I enter =RAND() in a cell?
• How can I simulate values of a discrete random variable?
• How can I simulate values of a normal random variable?
• How can a greeting card company determine how many cards to produce?
• Problems