Simulation models, Managerial Accounting


Simulation is a method of analyzing a system by experimentally duplicating its behavior. Management accountants can be able to make meaningful inferences concerning the operation of some real-world system by constructing a model of the system and then experimenting with the model. If the model is an adequate representation of the real system, a study of the responses of the model to various decisions will give considerable insight into the effects of implementing such decisions in the real system.

Simulation is used where analytical methods are not available or would be very complicated. E.g. in inventory control problems, production planning problems, corporate planning, and queuing problems etc.

Posted Date: 12/6/2012 7:43:02 AM | Location : United States

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