Numerical accuracy issues in using Excel for simulation studies

Many researchers use Excel to perform simulations, but with each upgrade to Excel - Excel 97, Excel 2000, Excel XP, and Excel 2003 - numerical accuracy problems have been noted. In the latest version, Excel 2003, some substantial changes have been made to its algorithms as noted on its Web site. This paper discusses generating random numbers in Excel - including uniform, normal, and Poisson variates. In addition, the study assesses how Excel´s accuracy stacks up to other statistical software by using the NIST Statistical Reference Datasets tests as certified benchmarks of numerical accuracy. This paper will reveal that Excel 2003 still has room for improvement.