Random Variables

Abstract

Probability theory has been studied since the 17th century, and applied in a wide variety of areas of engineering, science, and management. As an important tool, stochastic simulation is defined as a technique of performing sampling experiments on the models of stochastic systems. It is heavily based on sampling random variables from probability distributions. Stochastic simulation is also referred to as Monte Carlo simulation. Although simulation is an imprecise technique which provides only statistical estimates rather than exact results and is also a slow and costly way to study problems, it is indeed a powerful tool dealing with complex problems without analytic techniques.