A simulated investment analysis for a gas pipeline company

摘要

The supply and demand schedules for gas pipeline companies are probabilistic in form and dynamistic in nature. These factors, along with the other uncertainties associated with gas supply investment decisions, must be considered in order to properly evaluate decision alternatives. These dynamic, uncertain and interrelated decision elements can be properly evaluated through computer based simulation, where each element not known precisely is considered as a random variate, to be simulated. The manifestation of the resulting simulation model is the expected profit and loss (variance from the perfect decision) of each investment alternative, evaluated over its anticipated life.