Question

Discuss stochastic and deterministic modeling with 2 examples of a same situation.

Answer 1

Answer:-

Stochastic model:- In the Stochastic model, there is a certain randomness in the output which is due to a random variable in the system that provides unpredictable results. It has the potential to handle uncertainty through the input built into it. Stochastic models possibly produce different results each time the model is run. Even scientists often apply a Stochastic model to analyze a complex communication system and obtain a description of the system.

Deterministic model:- It is opposite to Stochastic mode where there is no randomness and always gives a predictable outcome. This model will predict a population that is unvarying in size. It has a set of equations that exactly describe the system input and output. Most commonly used in Physics and mathematics.

Examples:-

1) In a sawmill, in order to meet the demand fulfillment, the decision-makers generate the plan based on available predicted data and the manufacturing process is updated at a regular interval with regards to demand and actual inventory. This is an example of a deterministic model where there is a predicted outcome.  

2) In a sawmill, if there are random outcomes and demand, this is because the volume of supply delivered or input is a random variable. So to overcome these uncertainties the decision-makers generate a plan with minimum expected cost to handle all possible random output and demand situations. This is an example of a stochastic model where we get a random output.

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