They also provide a number of advantages over predictive models with fixed inputs, such as the ability to conduct sensitivity analysis or calculate the correlation of inputs. Since its introduction, Monte Carlo Simulations have assessed the impact of risk in many real-life scenarios, such as in artificial intelligence, stock prices, sales forecasting, project management, and pricing. It was named after a well-known casino town, called Monaco, since the element of chance is core to the modeling approach, similar to a game of roulette.

The Monte Carlo Method was invented by John von Neumann and Stanislaw Ulam during World War II to improve decision making under uncertain conditions. Monte Carlo Simulation, also known as the Monte Carlo Method or a multiple probability simulation, is a mathematical technique, which is used to estimate the possible outcomes of an uncertain event.