Asked by Keyara Lewis on Jul 21, 2024

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One reason for using simulation rather than an analytical model in an inventory problem is that the simulation is able to handle probabilistic demand and lead times.

Probabilistic Demand

A forecasting approach that estimates the likelihood of various levels of demand for products or services based on probability distributions.

Lead Times

The duration between the initiation and completion of a process or project, often used in manufacturing and supply chain management to schedule production or deliveries.

  • Comprehend the advantages and limitations of simulation when dealing with complex problems.
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PK
Parteek KumarJul 27, 2024
Final Answer :
True
Explanation :
Analytical models assume certain fixed values for variables, whereas simulations can incorporate randomness and variability in demand and lead times, making them better suited for modeling inventory problems that involve probabilistic variables.