Question

Can anyone walk me through this please!!-- Build a Monte Carlo simulation model to solve a project problem.

He does not provide that information, it just says a probabilistic model.

Answer 1

Monte Carlo method refers to a generic process for a wide range of stochastic techniques. Monte Carlo processes are based on the use of random numbers and probability statistics to solve problems in diverse fields such as Chemical and Biological sciences, Material Science, nuclear physics and high energy particle physics, economics, road traffic etc. In general a "Monte Carlo" method requires you to do is use random numbers to examine your problem.

A simple application of Monte Carlo method is to find out the value of .

Draw a square and then inscribe a circle within it. Generate a large number of random points within the square and count how many fall in the enclosed circle.

The area of the circle is πr² and the area of the square is (2r)² = 4r². Divide the area of the circle by the area of the square to get π/4. The same ratio can be used between the number of points within the square and the number of points within the circle.

So, we get π ≈ 4 x (number of points in the circle / total number of points)

The greater the number of points used the better the value of π that can be generated.