Simulation

Simulation is the process of designing a model of a real system and conducting

experiments with the model for the purpose of understanding the behaviour for the
operation of the real system.
or
Simulation is the representative model for the real situations. Simulation techniques is
used where it is not possible to construct mathematical tools like linear programming.
System: Any set of interrelated components acting together to achieve a common
objective.
Some applications of the simulation techniques can be:
Financial planning, Inventory problem/control as per different business situations.
Model:
Advantages of Simulation:

Many important managerial problems can not be solved by mathematical techniques. Simulation
offers the solution by allowing experimentation with a model of the system without interfering with
the real system.

Through simulation, management can predict the difficulties which may come up due to the
introduction of new machine , equipment or process.

Simulation models are comparatively flexible and can be modified due to the changes in the
environment of the real situation.

Simulation techniques are easier to use than mathematical models.

It is always advantageous to train the people on the simulated models before putting them on real
system.
Disadvantages of Simulation:

• Optimal results can not be guaranteed by the simulation

• In a no. of situation simulation is comparatively costly and time consuming.

• It is very difficult to construct simulation models if the no. of variables are large
and their interrelationship is complex.
TYPES OF SIMULATION

1) Deterministic versus probabilistic simulation

2) Time independent versus time dependent simulation

Random Number

Random numbers are the numbers which have equal probability of being generated.

Generation of Random Number

In order to use the simulation-based techniques, we will need to be able to generate

sequences of random numbers.

Pseudo-random Numbers (Linear congruential generators)

STEPS IN SIMULATION PROCESS

Step 1: Define the problem (involves understanding of the problems to be studied, objective of the
study, specific issues that need to be addressed and time constraints for performing the study)

Step 2: Analyze cost and benefits (It is advisable to review the probable cost and possible benefits of
the study)

Step 3: Abstract the real system into model (Formulate an appropriate model of the given situation)

Step 4: Testing and Validating the Model

Step 5: Identify and collect the data needed to test the model / Designing of the Experiment

Step 6: Run the Simulation Model

Step 7: Analyze the results of the simulation model

Step 8: Validate the simulation

MONTE CARLO SIMULATION
The Monte Carlo Simulation is the most popular method of simulation. It uses random numbers
and is employed to solve problems requiring decision making under uncertainty.
The monte carlo simulation comprise the following steps:
1. Define the problem
2. Construct an appropriate model
3. Setting up a probability distribution for variables to be analyzed.
4. Compute cumulative probability distribution
5. Generating random numbers and then assigning an appropriate set of random numbers to
represent value or range (interval) of values for each random variable.
6. Conducting the simulation experiment using random sampling.
7. Repeating step 4 until the required number of simulation runs has been generated.
8. Designing and implementing a course of action and maintaining control.
Example:
A bakery keeps stock of a popular brand of cake. Previous experience shows the
daily demand pattern for the item with associated probabilities, as given below:
Daily demand (Units) 0 10 20 30 40 50
Probability 0.01 0.20 0.15 0.50 0.12 0.02

Use the following sequence of random numbers to simulate the demand for next 10
days.

Random number 25 39 65 76 12 05 73 89 19 49
Estimate the daily average demand for the cakes based on the simulated data.
Solution:
Using the daily demand distribution, we first obtain a probability distribution.
Daily demand Probability Cumulative Random Number
(Units) Probability Intervals
0 0.01 0.01 00
10 0.20 0.21 01-20
20 0.15 0.36 21-35
30 0.50 0.86 36-85
40 0.12 0.98 86-97
50 0.12 1.00 98-99
Next to conduct a simulation experiment for demand, take a sample of random numbers.
They represent the sequence of 10 samples.
DAYS RANDOM NUMBER SIMULATED DEMAND
1 25 20
2 39 30
3 65 30
4 76 30
5 12 10
6 05 10
7 73 30
8 89 40
9 19 10
10 49 30
Total Demand 240

Expected demand = (240/10) = 24 units.

Example: A dentist schedules all his patients for 30 minute appointments. Some of the
patients take more than 30 minutes, some less, depending on the type of dental work to
be done. The following is the summary of the various categories of work, time needed to
complete the work and their probabilities.
Category of Service Time required (Minutes) Probability of Category
Filling 45 0.40
Crown 60 0.15
Cleaning 15 0.15
Extraction 45 0.10
Check-up 15 0.20
Simulate the dentist’s clinic for four hours and determine the average waiting time for the
patients as well as the idleness of the doctor. Assume that the patients are given
appointments at half-an-hour intervals (i.e., at 8:00, 8:30, 9:00, 9:30, 10:00, 10:30, 11:00,
11:30 AM) and that they show up at the clinic at exactly their scheduled arrival time.
Use the following random numbers:
40 82 11 34 25 66 17 79
Solution:
The cumulative probability distribution and random number intervals
associated with service times are shown below:
Category of Probability of CUMULATIVE RANDOM
Service Category PROBABILITY NUMBER
INTERVAL
Filling 0.40 0.40 00-39
Crown 0.15 0.55 40-54
Cleaning 0.15 0.70 55-69
Extraction 0.10 0.80 70-79
Check-up 0.20 1.00 80-99
The results of simulation run are as follows:
Patient Arrival Service Random Category Time of Service Service Customer Waiting Time
Number Time Starts Number of Service (Minutes) Ends (Service starts – arrival time)
1 8:00 8:00 40 Crown 60 9:00 0
2 8:30 9:00 82 Check up 15 9:15 30
3 9:00 9:15 11 Filling 45 10:00 15
4 9:30 10:00 34 Filling 45 10:45 30
5 10:00 10:45 25 Filling 45 11:30 45
6 10:30 11:30 66 Cleaning 15 11:45 60
7 11:00 11:45 17 Filling 45 12:30 45
8 11:30 12:30 79 Extraction 45 1:15 60
Total Waiting Time 285

Average waiting time of patient = (Total Waiting Time / Number of patients)

= (285 / 8) = 35.625 minutes.
Waiting time of dentist = Nil