Module F: Simulation
Introduction
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What: Simulation
Where: To duplicate the features,
appearance, and characteristics of a
real system
Why: To estimate the effects of various
actions
Simulation
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Imitate a real-world situation
mathematically
Study its properties and operating
characteristics
Draw conclusions and make decisions
based on the results of the simulation
Steps
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1. Define problem
2. Introduce variables
3. Construct numerical model
4. Set up possible courses of action
5. Run experiment
6. Consider results
7. Decide course of action
Advantages of Simulation
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Straightforward and flexible
Analyse large and complex real-world
systems that cannot be solved by
conventional models
Real-world complications can be inserted
Time compression
Allows “what if” questions
Does not interfere with real-world system
Study interactive effects of individual
components
Disadvantages of Simulation
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Good models are expensive and take
months to develop
Trial-and-error approach does not
generate optimal solutions
User must generate all conditions and
constraints
Each model is unique – solution not
transferable to other problems
Monte Carlo Simulation
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System contains elements that exhibit
chance
Experiment on chance elements by
means of random sampling
Step 1
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Establish Probability Distributions
Step 2
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Build a cumulative probability
distribution for each variable
Step 3
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Set random number intervals
Step 4
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Generate random numbers
(Table F.4)
Step 5
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Simulate the experiment
Where can Simulation Be
Used?
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Queueing problems – especially ones
that do not follow a Poisson distribution
Inventory Analysis – finding order
quantity and reorder points where
demand and lead time are not constant
Computer Simulations
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To draw valid results from the
simulation, you must repeat it many
times
The computer makes this easy by
generating random numbers, applying
them to the model, and tracking the
results
Commercial Products
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Extend – student version on CD
SimFactory
ModSim
MAP/I
Do-It-Yourself With Excel
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FREQUENCY function
VLOOKUP function