Advantages of monte carlo method

Advantages and Disadvantages
of Monte Carlo Simulation
Compared to the exact analytical or mathematical model:
+ Makes it possible to study more complicated models,
which do not have an analytical solution (or solution is
difficult)
+ Don’t have to make as many simplifying assumptions—
get more flexible models that can be more valid
+ Can include randomness in a controlled way
+ Correlations and other inter-dependencies can be included
+ Changes to the model are quite easy and quick to do
- Don’t get simple formulas, which could help to
understand the system
- Don’t get exact answers—only estimates, which Include
uncertainty - that should also be estimated


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