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    When is a simulation better than hypothesis testing?

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    a) Can you think of an example related to your work where a simulation could not be performed, (b) one where a simulation could be performed, yet a formal test would be preferred? (c) What specific (different than hiring) business decisions would a manager make using hypothesis testing?

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    I would use a simulation if I wanted to see a range of possible outcomes. Hypothesis testing is more when you want to be sure something is true or false but not so interested in the range of possible outcomes. I don't know where you work so I will have to just pick some business examples....

    a. I couldn't do a simulation if I didn't have any history to use in predicting or didn't know what ...

    Solution Summary

    This solution discusses business scenarios best suited to simulations versus hypothesis testing. Response is in everyday language suitable for a beginner.