18s

Simulation

McGraw-Hill/Irwin

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives
Explain what is meant by the term simulation
List some of the reasons for simulations popularity
as a tool for decision making
Explain how and why random numbers are used
are used in simulation
Outline the advantages and limitations of simulation
Describe the alternatives that a manager would
reject before choosing simulation as a decision
making tool
Solve typical problems that require simulation
18S-2

Simulation
Simulation: a descriptive technique that
enables a decision maker to evaluate the
behavior of a model under various
conditions.
Simulation models complex situations
Models are simple to use and understand
Models can play what if experiments

Extensive software packages available

18S-3

Simulation Process
1. Identify the problem
2. Develop the simulation model
3. Test the model
4. Develop the experiments
5. Run the simulation and evaluate results
6. Repeat 4 and 5 until results are
satisfactory
18S-4

Monte Carlo Simulation

Monte Carlo method: Probabilistic simulation
technique used when a process has a
random component
Identify a probability
distribution
Setup intervals of
random numbers to
match probability distribution
Obtain the random numbers
Interpret the results

18S-5

Example S-1

18S-6

Example S-1

18S-7

Simulating Distributions
Poisson

Mean of distribution is required

Normal

Need to know the mean and standard

deviation

Simulated =
Mean
value

Random X Standard
number
deviation

18S-8

Uniform Distribution
Figure 18S.1
F(x)

Simulated
a + (b - a)(Random number as a percentage)
=
value

18S-9

Negative Exponential Distribution

Figure 18S.2

F(t)

P ( t T ) . RN

18S-10

Computer Simulation
Simulation languages
SIMSCRIPT II.5
GPSS/H
GPSS/PC
RESQ

18S-11

Advantages of Simulation
Solves problems that are difficult or
impossible to solve mathematically
Allows experimentation without risk to actual
system
Compresses time to
show long-term effects
Serves as training tool
for decision makers

18S-12

Limitations of Simulation
Does not produce optimum solution
Model development may be difficult
Computer run time may be substantial
Monte Carlo simulation only applicable to
random systems

18S-13