A model is a mathematical representation of a problem.

When modeling, their are essentially 2 types of models: Descriptive and Optimization. There are many others but for our puposes we will focus on these 2.

• A descriptive model, as it name imples, describes a situation and its relationships. When incorporating variance into your model, Monte-Carlo Simulation enables the modeler to better understand the interactions between the variables.
   


• An Optimization model is based on a descriptive model where varibles that are under the modelers control are identified and simulated to find the best possible situation or outcome.