Management Accounting Report Essay

In decision do process ambiguity, variability and uncertainty ar often faced. For this reason attempt Analysis is always part of any decision making process. steady if the access to information is unprecedented even then future discountt be predicted accurately. For this reason Monte Carlo simulation is employ which returns e real(prenominal) the possible outcomes of decisions, access the impacts of insecuritys and tout ensembleow better decision making on a lower floor uncertain situations.Monte Carlo pretenseIt is a computerized mathematical technique establish on broad class of computer algorithms which in every last(predicate)ow people and organisations to puzzle out risks and hence helps in better decision making. Monte Carlo Simulation give the bounce likewise be termed as a problem solving technique to calculate probability of outcomes by using random variables and multiple trials which are termed as simulations (Berg, 2004). Monte Carlo Simulation is used by professionals in engineering, medicine, physics, chemists, control management, manufacturing, research and development, environmental specialists, oil and gas and several business functions. This is a reflective report in which good example study of Fennel jut out Project of Laura Watson company is used to predict the demand of greeting cards. The force back of the report is to speculate the situation of the Fennel Design project and alike to provide a base for the companies experiencing these situations.This report uses discrete data of nonstop couch In this report discrete data of continuous range is used. Example of discrete data is when a coin flips in air, it attain two possibilities either head or tail. Whereas, a running engine might have umpteen temperature changes at different time intervals which is an workout of continuous data. Laura Watson is a new company and so can also face these uncertainties as they dont have any predilection of when to produce, when t o produce, supply and demand analysis and the situation which drives these factors. For this reason Monte Carlo Simulation is used to calculate predicted demand, risk analysis in order to provide company with useful information which then can be employ to murder timely decision making. This report is divided into three chief(prenominal) parts.In Monte Carlo Simulation we can take as many amounts of trials to get an accurate answer. But, in the disposed casestudy, business managers Alex and Laura took one thousand trials. Number of trials increases the profit probabilities and helps in getting nigh(a) results and reduces the chances of risks. In this question we have to calculate the price of the cards and for this we used Descriptive Analysis Function in Microsoft Excel. This Function automatically calculates all statistical data like mean, median, mode and standard deviation. Whereas, in problem two WHAT IF analysis helps us in getting the results within the given number of t rials. It creates thee situations or results which are base case scenario, best case scenario and worst case scenario.When the values of these situations are changed answer automatically changes. It is very helpful for managers in decision making. In task three risk simulation function and random functions are used which makes a equalizer between mean and standard deviation given in the project demand. Rand command is used to calculate the cost of parts, random discreet method acting is used to. Variance Reduction is used to minimize non accurate profits. These all function enables to calculate price and predict risk. In this report every function is calculated independently to make the process easy to deduce and clear. By using Monte Carlo Simulation we have calculated all the possible parameters required in the case study and also predicted the risk. It helps the managers to make quick and accurate decisions.BibliographyBerg, A. B. (2004). Markov Chain Monte Carlo Simulation and their Statistical Analysis. impertinent Jersey World Scientific.