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This lecture covers the development of Schrage's algorithm, a computer-independent method for generating random numbers by avoiding overflow upon multiplication. The algorithm is based on an approximate factorization and involves the calculation of the next random number using specific conditions and formulas. Additionally, the lecture explores non-portable algorithms and the shift-register generator, explaining how numbers are stored in computers and the process of generating random numbers using shift operations and specific combinations. The maximum cycle for the shift-register generator is discussed, along with the concept of magic pairs for optimal cycles.