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E20-065 · Question #16

A hotel chain runs a simul-ation on room pricing. They want to estimate revenue, per hotel, within +/- $10 with 95% confidence (Za/2=1.96). The estimated revenue standard deviation is $5000 based on…

The correct answer is C. A linear congruential generator (LCG) was used (or pseudo-random number generation. See the full explanation below for the reasoning.

Question

A hotel chain runs a simul-ation on room pricing. They want to estimate revenue, per hotel, within +/- $10 with 95% confidence (Za/2=1.96). The estimated revenue standard deviation is $5000 based on previous booking data. What is the optimal number of simulation trials to run?

Options

  • AA 32-bit operating system was used
  • BThe same number of trials was used
  • CA linear congruential generator (LCG) was used (or pseudo-random number generation
  • DDifferent seeds tor the random number generator were used.

How the community answered

(40 responses)
  • A
    8% (3)
  • B
    3% (1)
  • C
    80% (32)
  • D
    10% (4)

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