Marginal Books

Practical Monte Carlo Simulation with Excel (Part 2 of 2)

TitlePractical Monte Carlo Simulation with Excel (Part 2 of 2)
AuthorAkram Najjar
PublishedJanuary 2017
Size458 pages (124,000 words)

There is a fair number of stand alone applications as well as add on’s to Microsoft Excel in the market to be used to run Monte Carlo Simulation (MCS) models. However, out of the box, Excel has all the functions you need to develop such models. What is needed are robust modeling procedures, techniques and analytic formulations. Initially, I started with one book. This grew out of proportion as more and more applications and models were identified. Some of these had not been modeled with MCS before. I had to break the book into two parts.

Part 1 presents the basics of modeling always providing methods and typical models as applications of simulation. Part 1 also spends time on clarifying different ways of analyzing the simulation output using a variety of statistical functions and procedures all found within Excel. The eBook clarifies a variety of Excel facilities needed in different parts of simulation: sensitivity analysis, linear regression and the Analysis Toolpack. Finally, Part 1 presents a few standard modeling techniques that can be used in a variety of models, specifically in Part 2.

Part 2 concentrates on applications such as project management, acceptance sampling, sales and budget forecasting, queuing models, reliability engineering and more. Since these operations behave according to specific statistical distributions, time is spent on clarifying a variety of these functions. When one or two are not available in Excel, alternative methods of computation are presented. A special chapter addresses Markov Processes and shows how simulation can be coupled to such an analysis.

The uses and applications of statistical distributions in these operations are addressed in depth. Having covered Uniform, Normal and Discrete Distributions in Part 1, Part 2 proceeds to present and give applications for the following distributions: binomial, negative binomial, geometric, hypergeometric, triangular (not commonly used but is the basis as to why betaPERT is preferred), Poisson, exponential, Gamma and Weibull.

No programming is required although in one single case, an embedded VBA module is included. It is used to formulate a method that allows the analyst to develop a two level simulation. To get the results of each of the primary runs in the model, the model runs a further “sub-simulation”. No VBA competence is required.

The two eBooks come with 21 and 54 step by step models, respectively, and with supporting images. Whenever statistical functions are used, they are fully clarified using a common sense and non-theoretical approach. All the workouts are solved and are available for download from this page.

Where can you Purchase the eBook?

Click Here to view the Online Stores where the eBook can be purchased.


Click Here to download a sample chapter from the book.

Click Here to download the workouts and templates for the eBook.

(A password is provided in the purchased eBook).

Table of Contents

Introducing Part 2 of the eBook
Downloading the Supporting Files
Alerts, Guidelines, Exclusions and Apologies
Models that Sample the Normal Distribution
Models that Sample the Triangular Distributions
Models that Sample the BetaPERT Distribution
Simulate Project Schedules (CPM and PERT)
Models that Sample the Binomial Distribution and its Relatives
Models that Sample the Geometric and the Negative Binomial Distributions
Simulate Acceptance Sampling Plans
Queuing Models with Poisson and Exponential Distributions
Simulate Time to Failure, Reliability and Multi-component Systems
Simulate Markov Chains
Appendix A: Additional Statistical Concepts
Appendix B: Fundamentals of Matrices and Excel
Appendix C: Setup the VBA Sub-Runs Module
Appendix D: Acronyms and AbbreviationsTop of Page