Management Accounting Report Essay

In decision do process ambiguity, variability and uncertainty be often faced. For this basis Risk Analysis is always part of any decision making process. level off if the access to information is unprecedented even then future cant be announceed accurately. For this reason monte Carlo simulation is apply which provides all the possible outcomes of decisions, access the impacts of take a chances and allow better decision making under uncertain situations.four-card monte Carlo SimulationIt is a computerized mathematical technique based on coarse class of computer algorithms which allow people and organisations to count on risks and hence helps in better decision making. Monte Carlo Simulation can also 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 utilise by professionals in engineering, medicine, physics, chemists, stray mana gement, manufacturing, research and development, environmental specialists, oil and gas and several melodic line engages. This is a reflective report in which case study of Fennel Design Project of Laura Watson federation is employ to predict the demand of greeting cards. The aim of the report is to speculate the situation of the Fennel Design project and also to provide a base for the companies experiencing these situations.This report uses discrete data of continuous range In this report discrete data of continuous range is used. Example of discrete data is when a fall upon flips in air, it have two possibilities either head or tail. Whereas, a running engine capacity have many temperature changes at different time intervals which is an example of continuous data. Laura Watson is a new company and so can also face these uncertainties as they dont have any belief of when to produce, when to 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 utilized to make timely decision making. This report is divided into three main parts.In Monte Carlo Simulation we can take as many amounts of trials to get an accurate answer. But, in the granted casestudy, business managers Alex and Laura took one thousand trials. Number of trials increases the profit probabilities and helps in getting close 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 mechanically calculates all statistical data like mean, median, mode and standard deviation. Whereas, in caper two WHAT IF analysis helps us in getting the results within the given number of trials. It creates thee situations or results which are base case scenario, best case scenario and worst case s cenario.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 balance between mean and standard deviation given in the projected demand. Rand command is used to calculate the cost of parts, random discreet method 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 recognize 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. New Jersey World Scientific.