1. Simulation is a tool managers can use to describe the behavior of a system under specified conditions. A major feature of simulation is the ability to answer "what if" questions by describing how a system will behave given certain changes.

2. Simulation is especially useful in situations that are too complex to be analyzed mathematically.

3. Monte Carlo simulations involve the use of random numbers to incorporate randomness in models of system behavior.

4. Simulations that use random numbers must be run a sufficient number of times to enable a decision maker to separate the "real" aspects of behavior from the random aspects.

5. In developing simulation models, it is important to thoroughly test the models to assure that their results are consistent with reality.

6. Simulation applications are found throughout production and operations management. Examples include product design, facilities layout, aggregate planning, scheduling, and project management.

7. The advantages of simulation include:

1. It is useful when situations are too complex for analytical models.
2. It can be used to answer "what if" questions for a variety of conditions.
3. Time is compressed; simulations of a year's experience can be run in a matter of seconds.
4. Simulations can serve as training exercises for managers and others.

8. Among the limitations of simulation are:

1. It is descriptive, it does not provide an optimal solution to a problem.
2. The construction of large-scale simulations can be very costly and time consuming.
3. Monte Carlo simulation is only appropriate when randomness is a factor.

9. When a random event can be described by a theoretical distribution, simulation models should incorporate that; empirical distributions can be used for situations not adequately described by a theoretical distribution.