Higher Education · Operations Research
Simulation
What is it
Simulation models a real system using random sampling to imitate its behaviour over time, often via Monte Carlo methods, used when a system is too complex for an exact mathematical solution.
Why it matters
Simulation is used throughout finance, engineering, and operations wherever a system involves too much randomness or complexity for an exact formula — from pricing financial derivatives to testing how a new factory layout performs under variable demand.
Exam tip
Always run enough simulation trials to get a stable, reliable estimate before drawing conclusions — a simulation with too few runs can give a misleadingly confident-looking answer that's actually just random noise.
Related topics
Want help mastering Simulation?
Tell us about the student's goals and confidence — we'll design a personalised plan.