19s-1 Simulation

Chapter 19 Supplement

Simulation

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-2 Simulation

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

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-3 Simulation

Simulation Process

• Identify the problem

• Develop the simulation model
• Test the model
• Develop the experiments
• Run the simulation and evaluate results
• Repeat until results are satisfactory

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-4 Simulation

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

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-5 Simulation

Example S-1

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-6 Simulation

Example S-1

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-7 Simulation

Simulating Distributions
• Poisson
– Mean of distribution is required
• Normal
– Need to know the mean and standard
deviation

Simulated = Random X Standard

value
Mean + number deviation

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-8 Simulation

Uniform Distribution
Figure 19S-1

F(x)

0 a b x

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

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-9 Simulation

Negative Exponential Distribution

Figure 19S-2

F(t)

P ( t  T ) . RN

0 T t

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-10 Simulation

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

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
19s-11 Simulation

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

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.