Dr.

Bishram

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 Simulation Defined
A computer-based model used to run
experiments on a real system.
 Typically done on a computer.
 Determines reactions to different operating rules or
change in structure.
 Can be used in conjunction with traditional statistical
and management science techniques (such as waiting
line problems, when the basic assumptions do not hold,
or where problems involve multiple phases).

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 Differences Between
Optimization and Simulation
Optimization models
 Yield decision variables as outputs
 Promise the best (optimal) solution to the model
Simulation models
 Require the decision variables as inputs
 Give only a satisfactory answer

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Types of Simulation Models
 Continuous
 Based on mathematical equations.
 Used for simulating continuous values for all points in
time.
 Example: The amount of time a person spends in a
queue.

 Discrete
 Used for simulating specific values or specific points.
 Example: Number of people in a waiting line (queue).

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 Simulation Methodology:

 Estimate probabilities of future events

 Assign random number ranges to percentages
(probabilities)
 Obtain random numbers
 Use random numbers to “simulate” events.

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Probability Distributions
A probability distribution defines the behavior of a
variable by defining its limits, central tendency
and nature
 Mean
 Standard Deviation
 Upper and Lower Limits
 Continuous or Discrete
Examples are:
 Normal Distribution (continuous)
 Binomial (discrete)
 Poisson (discrete)
 Uniform (continuous or discrete)
 Custom (create your own!)

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Normal Distribution
 Conditions:
 Uncertain variable is symmetric about the mean
 Uncertain variable is more likely to be in vicinity of the
mean than far away
 Use when:
 Distribution of x is normal (for any sample size)
 Distribution of x is not normal, but the distribution of
sample means (x-bar) will be normally distributed with
samples of size 30 or more (Central Limit Theorem)
 Excel function: NORMSDIST() – returns a random
number from the cumulative standard normal distribution
with a mean of zero and a standard deviation of one [e.g.,
NORMSDIST(1) = .84]

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Uniform Distribution
 All values between minimum and maximum occur
with equal likelihood
 Conditions
 Minimum Value is Fixed
 Maximum Value is Fixed
 All values occur with equal likelihood
 Excel function: RAND() – returns a uniformly
distributed random number in the range (0,1)

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Note on Random Numbers in Excel
Spreadsheets
 Once entered in a spreadsheet, a random number
function remains “live.” A new random number is
created whenever the spreadsheet is re-calculated.
To re-calculate the spreadsheet, use the F9 key.
Note, almost any change in the spreadsheet causes
the spreadsheet to be recalculated!
 If you do not want the random number to change,
you can freeze it by selecting: tools, options,
calculations, and checking “manual.”

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 Evaluating Results

 Conclusions depend on the degree to which the model

reflects the real system

 The only true test of a simulation is how well the real

system performs after the results of the study have
been implemented.

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Simulation Applications
 Machine Breakdown problems

 Queuing problems

 Inventory problems

 Many other applications

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Advantages of Simulation
 Simulation often leads to a better understanding
of the real system.
 Years of experience in the real system can be
compressed into seconds or minutes.
 Simulation does not disrupt ongoing activities of
the real system.
 Simulation is far more general than mathematical
models.
 Simulation can be used as a game for training
experience (safety!).

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Simulation Advantages (cont’d)
 Simulation can be used when data is hard to
come by.
 Simulation can provide a more realistic
replication of a system than mathematical
analysis.
 Simulation can be used to analyze transient
conditions, whereas mathematical techniques
usually cannot.
 Simulation considers variation and can
calculate confidence intervals of model results.

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Disadvantages of Simulation
 There is no guarantee that the model will, in fact,
provide good answers.
 There is no way to prove reliability.
 Simulation may be less accurate than mathematical
analysis because it is randomly based.
 Building a simulation model can take a great deal of
time (but if the payoff is great, then it is worth it!).
 A significant amount of computer time may be
needed to run complex models (old concern - no
longer an issue!).
 The technique of simulation still lacks a standardized
approach.

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In a service station, customers arrive randomly. The
arrival pattern and service pattern distribution is given
below. Calculate
1. Average waiting time of the customer?
2. Average idling time of service station.

Arrival Pattern Service Pattern

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Random Number Assignment - Arrivals

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Random Number Assignment - Service

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 Simulated System

Find Out
1. % waiting of customer? 1 * 100/ 29 = 3%
2. Percentage Idle time in Service? 14.5/29= 50 %

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 Simulation Calculation
Arrival Service

Time Waiting
Random between Arrival Random Service Start End For Station
Number Arrival Time No Time Service Service Service Idling
78 3.5 3.5 54 1.5 3.5 5 0 2
78 3.5 7 26 1 7 8 0 0
6 1 8 51 1.5 8 9.5 0 0
4 1 9 45 1.5 9.5 11 0.5 2.5
97 4.5 13.5 46 1.5 13.5 15 0 1.5
71 3 16.5 84 2 16.5 18.5 0 1.5
78 3.5 20 58 1.5 20 21.5 0 1
59 2.5 22.5 58 1.5 22.5 24 0 0
5 1 23.5 60 1.5 24 25.5 0.5 2.5
95 4.5 28 24 1 28 29 0 0

Total 1 11+3.5

% 3.45% 50%
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Thank You

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