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Monte Carlo Simulation

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    Monte Carlo Simulation

    I want to do The Inventory Management by Monte Carlo Simulation. Then I want to use solver in the simplex LP How to use it?
    I try to do it but have pop-up "The linearity conditions required by this LP solver are not satisfied". I think that formula "if" or "average" not to use in simplex LP?

    Thanks.

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    Re: Monte Carlo Simulation

    Welcome to the forum!

    You have marked this thread as solved - is it?
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    Re: Monte Carlo Simulation

    The Linear solver engine solves linear problems, the GRG nonlinear engine can solve smooth nonlinear problems and the Evolutionary engine can handle non-smooth problems and discontinuous functions.

    By far the most common discontinuous function in Excel is the IF function where the conditional test depends on the decision variables, as in the example =IF(C1>10,D1,2*D1) where C1 is a variable. Here is a short list of common discontinuous Excel functions:

    IF, CHOOSE

    LOOKUP, HLOOKUP, VLOOKUP

    COUNT

    INT, ROUND

    CEILING, FLOOR
    And some of the common non-smooth Excel functions: ABS, MIN and MAX

    So yes using the IF function will not work trying to run Solver using the Simplex linear engine.

    Alf

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    Re: Monte Carlo Simulation

    Thank you I'm attaching file I don't know how to use solver(Simplex LP) for find order quatity (Cell H9) to minimize total cost

    Thank you so much.
    Attached Files Attached Files
    Last edited by Chanut; 03-17-2019 at 09:28 PM.

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    Forum Expert Alf's Avatar
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    Re: Monte Carlo Simulation

    Looking at you file it seems to me to be some kind of home work. Forum Guidelines require members not to do your home work but we can offer hints on solving the problems.

    Still in order to offer a hint or two I need to understand the file setup in detail and I assume there must be an instruction sheet you have so could you post that as well.

    At the moment you can't use the Simplex LP as you have "IF" constructs (as you are aware of) but also "AVERAGE" a thing that is not accepted in the Simplex LP.

    Alf
    Last edited by Alf; 03-18-2019 at 03:27 AM.

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