Q.1 What is the primary purpose of simulation techniques in commerce?
To predict real-world outcomes using a model
To calculate taxes automatically
To replace all human decision-making
To create financial statements
Explanation - Simulation techniques allow businesses to model real-world systems and study outcomes under different scenarios without taking real-world risks.
Correct answer is: To predict real-world outcomes using a model
Q.2 Which of the following is a common method used in simulation?
Monte Carlo method
Regression analysis
Time series decomposition
Index number calculation
Explanation - The Monte Carlo method uses random sampling to obtain numerical results and is widely used in simulation.
Correct answer is: Monte Carlo method
Q.3 In a simulation model, what is a 'state variable'?
A variable representing the system's condition at a given time
A fixed constant in calculations
A random number used for sampling
A variable used to control taxes
Explanation - State variables define the current status or condition of the system being simulated at any point in time.
Correct answer is: A variable representing the system's condition at a given time
Q.4 Which type of simulation is used for systems where events occur at discrete points in time?
Discrete-event simulation
Continuous simulation
Static simulation
Deterministic simulation
Explanation - Discrete-event simulation models systems in which state changes occur at specific points in time due to events.
Correct answer is: Discrete-event simulation
Q.5 Random numbers in simulation are primarily used to:
Model uncertainty and variability
Increase computational speed
Store data efficiently
Generate deterministic results
Explanation - Random numbers simulate unpredictable elements, allowing the model to mimic real-world randomness.
Correct answer is: Model uncertainty and variability
Q.6 Which of the following is NOT a step in building a simulation model?
Defining objectives
Validating the model
Performing tax audits
Collecting input data
Explanation - Building a simulation model involves defining objectives, collecting data, creating the model, and validating it; tax audits are unrelated.
Correct answer is: Performing tax audits
Q.7 In Monte Carlo simulation, the term 'iterations' refers to:
Repeated trials of the simulation to estimate results
Number of employees in a company
Steps to calculate taxes
The time between two events
Explanation - Iterations are repeated runs of the simulation to provide a statistical estimate of outcomes.
Correct answer is: Repeated trials of the simulation to estimate results
Q.8 Which software tool is commonly used for business simulations?
Arena
Photoshop
AutoCAD
SPSS for surveys only
Explanation - Arena is a popular simulation software used to model and analyze business processes and systems.
Correct answer is: Arena
Q.9 Continuous simulation differs from discrete-event simulation because:
State changes continuously over time
It does not require computers
It only models financial systems
It ignores random events
Explanation - Continuous simulations model systems where changes happen in a continuous manner rather than at discrete events.
Correct answer is: State changes continuously over time
Q.10 Which of the following is a limitation of simulation techniques?
High computational cost for complex models
Cannot handle randomness
Does not require any data
Always gives exact predictions
Explanation - Complex simulations may require significant computing resources and time to produce results.
Correct answer is: High computational cost for complex models
Q.11 In simulation terminology, 'warm-up period' refers to:
Initial phase where results are not considered reliable
Time spent in training employees
The phase of preparing hardware for simulation
The time between two random events
Explanation - The warm-up period allows the system to reach a steady state before measurements are taken.
Correct answer is: Initial phase where results are not considered reliable
Q.12 Which application is a key use of simulation in commerce?
Inventory management and supply chain optimization
Graphic design
Personal budgeting only
Manual bookkeeping
Explanation - Simulation helps in analyzing inventory policies, demand fluctuations, and supply chain performance without real-world risk.
Correct answer is: Inventory management and supply chain optimization
Q.13 A deterministic simulation:
Produces the same output for a given input
Incorporates random events
Requires Monte Carlo methods
Is always continuous
Explanation - Deterministic simulations do not include randomness and will produce consistent results for identical inputs.
Correct answer is: Produces the same output for a given input
Q.14 Sensitivity analysis in simulation is used to:
Understand how changes in input affect output
Determine tax obligations
Reduce the number of iterations
Visualize employee performance
Explanation - Sensitivity analysis identifies which input variables have the most impact on the simulation results.
Correct answer is: Understand how changes in input affect output
Q.15 Which random number generation method is most widely used in simulation?
Pseudo-random number generation
Manual dice rolling
True random number from sensors only
Deterministic counting
Explanation - Pseudo-random numbers generated by algorithms are commonly used in simulations due to their reproducibility and speed.
Correct answer is: Pseudo-random number generation
Q.16 In simulation, validation is important to:
Ensure the model accurately represents the real system
Increase computing power
Train employees
Generate random numbers
Explanation - Validation confirms that the simulation model behaves in a manner consistent with the actual system.
Correct answer is: Ensure the model accurately represents the real system
Q.17 What is a primary advantage of using simulation over real-world experimentation?
It reduces risk and cost
It eliminates all uncertainty
It requires no data
It replaces human managers
Explanation - Simulation allows testing different scenarios without the financial, time, or safety risks of real-world experiments.
Correct answer is: It reduces risk and cost
Q.18 Which of the following is a step in Monte Carlo simulation?
Generate random inputs and calculate outcomes
Collect taxes from employees
Draw graphs manually
Perform time series decomposition
Explanation - Monte Carlo simulation involves generating random input variables, running the model, and analyzing the resulting outputs.
Correct answer is: Generate random inputs and calculate outcomes
Q.19 In a business simulation, queuing models are typically used to:
Analyze waiting lines and service systems
Manage stock investments
Calculate employee salaries
Prepare tax returns
Explanation - Queuing models simulate customer flow, service times, and waiting lines to optimize operations.
Correct answer is: Analyze waiting lines and service systems
Q.20 The accuracy of a simulation model depends mainly on:
Quality of input data and model assumptions
Speed of the computer only
Number of employees in the company
Type of office furniture
Explanation - Accurate input data and realistic assumptions are critical to ensure the simulation produces meaningful results.
Correct answer is: Quality of input data and model assumptions
Q.21 Which of the following best defines 'stochastic simulation'?
Simulation that incorporates randomness and uncertainty
Simulation with fixed outputs
Simulation only for financial statements
Simulation using continuous functions only
Explanation - Stochastic simulations include random variables to model uncertainty inherent in real systems.
Correct answer is: Simulation that incorporates randomness and uncertainty
Q.22 Which type of simulation is suitable for analyzing manufacturing processes with constant flow?
Continuous simulation
Discrete-event simulation
Stochastic simulation
Deterministic simulation
Explanation - Continuous simulation is used when the system changes smoothly over time, such as in fluid or production flow systems.
Correct answer is: Continuous simulation
Q.23 In simulation studies, 'output analysis' refers to:
Examining results to derive insights and decisions
Collecting input data only
Generating random numbers
Calculating taxes
Explanation - Output analysis helps interpret simulation results to make informed business decisions.
Correct answer is: Examining results to derive insights and decisions
Q.24 Which of the following is an example of simulation in commerce?
Forecasting inventory requirements using a model
Manual bookkeeping
Printing invoices
Calculating simple interest only
Explanation - Simulation can predict inventory needs under different scenarios, reducing shortages and excess stock.
Correct answer is: Forecasting inventory requirements using a model