Using of stochastic simulation for modeling of company sales plan in MS Excel

Abstract

Current real business processes are affected by a series of complex interactive and interdependent elements with probabilistic and dynamic characteristics. In this case it cannot be used mathematical methods with the exact analytical solutions for analysis of business processes and one of the alternatives is using of simulation. It is a very useful tool which can serve for modeling of the complex processes and for carrying out experiments with them. This article discusses using of stochastic simulation to generate a variable demand for the products of certain virtual manufacturing and commercial company. Presented simulation includes process from stochastic behavior of anonymous demand for finished products of the company through the creation of binding orders and through the distribution channels of finished goods (distribution warehouse, company shop, direct customers). The results of stochastic simulation serve as a basis for subsequent use of descriptive statistics and statistic inference methods. Own simulation was performed by the Monte Carlo method and by using of widely available software MS Excel.