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Definition

Simulation is a technique which describes a process by developing a model of that process, and then performing experiments on the model to predict the behavior of the process over time. Simulation is a technique of problem solving based upon experimentation performed on a model of real world situation.

Simulation is a numerical technique for conducting experiments which involves certain types of mathematical and logical relationships necessary to describe the behavior and structure of a complex, real world system over extended period of time.

Actual observation of a system may be too expensive. The problem is too big or intricate to handle with dynamic models.

Identify the problem Identify the decision variables Construct a model Testing the model Designing experiment Run the model Evaluate the result

This method uses random numbers for generating some data by which a problem can be solved. These random numbers helps in creating a hypothetical data for a problem which helps in solving it. These random numbers are generated by computers or taken from random number tables.

The Lajwaab Bakery Shop keeps stock of a popular brand of cake. Previous experience indicates the daily demand as given below:

Daily demand 0 15 25 35 45 50 Probability 0.01 0.15 0.20 0.50 0.12 0.02

Consider the following sequence of random numbers: 21, 27, 47, 54, 60, 39, 43, 91, 25, 20 Using this sequence, simulate the demand for the next 10 days. Find out the stock situation, if the owner of the bakery shop decides to make 30 cakes every day. Also estimate the daily average demand for the cakes on the basis of simulated data.

Using the daily demand distribution, we obtain a probability distribution as shown in the following table.

Daily demand

Probability

Cumulative probability

Random Numbers

0 15 25 35 45 50

0.01 0.15 0.20 0.50 0.12 0.02

0.01 0.16 0.36 0.86 0.98 1.00

0 1-15 16-35 36-85 86-97 98-99

Demand

Random Numbers

Next demand

Daily production = 30 cakes Left out Shortage

1 2 3 4 5 6 7 8 9 10

Total

21 27 47 54 60 39 43 91 25 20

25 25 35 35 35 35 35 45 25 25

320

5 10 5 0 5 10 15 30 25 20

10

Total demand = 320 The daily average demand for the cakes = Total demand/no. of days320/10 = 32 cakes.

** A factory produces 150 scooters. But the production rate varies with the following Distribution.
**

Production rate probability 147 148 149 0.15 150 0.20 151 0.30 152 0.15 153 0.05 0.05 0.10

At present it calls for a truck which will hold 150 scooters. Using the following random numbers determine the average number of scooters waiting for shipment in the factory and the average number of empty space in the truck. Random Nos: 82,54,50,96,85,34,30,02,64,47

Production rate 147 14 149 150 151 152 153

probability 0.05 0.10 0.15 0.20 0.30 0.15 0.05

Cum. probability 0.05 0.15 0.30 0.50 0.80 0.95 1.00

Random numbers 00-04 05-14 15-29 30-49 50-79 80-94 95-99

Trial No. 1 2 3 4 5 6 7 8 9 10

Random no.

Simulated production rate 152 150 150 153 152 150 150 147 151 150

Scooter waiting in factory 2 3 2 1 2 8

No. of empty spaces in the truck 3 3

82 54 50 96 85 34 30 2 64 47 Total

Average no. of scooters waiting = 8/10 = .8/day. Average empty space = 3/10 = 0.3/ day.

A dentist gives appointment to patients every half an hour. However he does not know the nature of illness of patients arriving at his clinic. From past records he has the following probability distribution and also know the exact treatment timings. He starts his clinic at 8 a.m. Using the following information determine the average waiting time of the customers and idle time of the doctor.

Nature of illness Filling Check up Crowning Cleaning extraction

probability .10 .30 .15 .30 .15

Time taken for treatment (in min) 50 15 40 15 30

Use the random numbers: 56,40,26,66,87,48,17,22,04,15.

Illness Filling Check up Crowning Cleaning extraction

Probability .10 .30 .15 .30 .15

Cum. Probability .10 .40 .55 .85 1.00

Random numbers 00-09 10-39 40-54 55-84 85-99

Tri Randm al No. No . 1 2 3 4 5 6 7 8 9 56 40 26 66 87 48 17 22 04

Illness

Ti me tak en 15 40 15 15 30 40 15 15 50 15

Patients arrival time

Treatment

Doctor identifi cation

Patients waiting time

Starts Cleaning Crowning Check up Cleaning extraction Crowning Check up Check up filling Check up 8:00 8:30 9:00 9:30 10:00 10:30 11:00 11:30 12:00 12:30 8:00 8:30 9:10 9:30 10:00 10:30 11:10 11:30 12:00 12:50

finishes 8:15 9:10 9:25 9:45 10:30 11:10 11:25 11:45 12:50 13:05 15 5 15 5 15 45 10 10 20 40

10 15

Total

Doctor s idle time = 45 minutes Patients average waiting time = 40/10 = 4 minutes.

The investment cooperation wants to study the investment projects based on three factors, namely, market demand, price minus cost per unit and required investments. These factors are believed to be independent of each other. In analyzing a new consumer product, the cooperation estimates the following probability distributions:

Annual Demand Units 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Probability 0.05 0.10 0.20 0.30 0.20 0.10 0.05

Price minus cost per unit Rs 3.00 5.00 7.00 9.00 10.00 Probability .10 .20 .40 .20 .10

Investment required Rs 17,50,000 20,00,000 25,00,000 Probability 0.25 0.50 0.25

Using simulation, repeat the trial 10 times and compute the return on investment for each trial taking theses three factors into account.

Annual demand 20,000 25,000 0,000 35,000 40,000 45,000 50,000 Price minus cost per unit 3.00 5.00 7.00 9.00 10.00

Probability 0.05 0.10 0.20 0.30 0.20 0.10 0.05 Probability

Cum. probability 0.05 0.15 0.35 0.65 0.85 0.95 1.00 Cum. probability 0.10 0.30 0.70 0.90 1.00

Random number 00-04 05-14 15-34 35-64 65-84 85-94 95-99 Random number

.10 .20 .40 .20 .10

00-09 10-19 20-69 70-89 90-99

Investment required 17,50,000 20,00,000 25,00,000 0.25 0.50 0.25

Probability

Cum. probability

Random number

0.25 0.75 1.00

00-24 25-74 75-99

To calculate return we have: Demand* profit per unit/investment *100

Trial R.N. for Simulated R.N. for Simulated R.N. for no. demand demand profit profit invstmnt 1 2 3 4 5 6 7 8 9 10 28 57 60 17 64 20 27 58 61 30 30 35 35 30 35 30 30 35 35 30 19 07 90 02 57 28 29 83 58 41 5.00 3.00 10.00 3.00 7.00 7.00 7.00 9.00 7.00 7.00 18 61 16 71 43 68 47 24 19 97

Simulatd Simulated investmnt return(in %) 1750 2000 1750 2000 2000 2000 2000 1750 1750 2500 8.57 5.25 20.00 4.50 12.25 7.50 7.50 18.00 14.00 8.40

The highest likely return is 20 % having annual demand of 35,000 yielding a profit of Rs. 10 per unit and investment required is Rs. 1750.

** People arrive at the New Delhi Railway station to buy tickets according to the following distribution.
**

Inter-arrival Time (Min.) 2 3 4 5 6 Frequency 10 20 40 20 10

The service time is 5 minutes and there is only one ticket counter. The Railway station in charge is interested in predicting the operating characteristics of this counter during a typical operating day from 10.00 a.m. to 11.00 a.m. Use simulation to determine the average waiting time before service and average time a person spends in the system. Solution: From the given distribution of arrivals, the random numbers can be assigned to the arrival times as shown in table 1.

Inter-arrival Time (Min.) 2 3 4 5 6

Frequency

Probability

Cumulative Probability 0.10 0.30 0.70 0.90 1.00

R.No.

10 20 40 20 10

0.10 0.20 0.40 0.20 0.10

0 - 09 10 - 29 30 - 69 70 - 89 90 - 99

The first random number generated is 17, which corresponds to the inter-arrival time of 3 minutes. This implies that the first person arrives 3 minutes after the service window opens, as shown in table 2. Since the first person arrives at 10.03 a.m., therefore, the server has to wait for 3 minutes. The server takes 5 minutes and thus, the first person leaves the system at 10.08 a.m. (10.03 + .05). Similarly, other values can be calculated.

S.No.

R.No.

1 2 3 4 5 6 7 8 9 10 11 12 Total

17 86 84 79 33 55 6 42 93 38 58 71

InterArrival Time 3 5 5 5 4 4 2 4 6 4 4 5

Arrival Time 10.03 10.08 10.13 10.18 10.22 10.26 10.28 10.32 10.38 10.42 10.46 10.51

Service Starts 10.03 10.08 10.13 10.18 10.23 10.28 10.33 10.38 10.43 10.48 10.53 10.58

Service Ends 10.08 10.13 10.18 10.23 10.28 10.33 10.38 10.43 10.48 10.53 10.58 11.03

Waiting Time Server 3 1 2 5 6 5 6 7 7 39 Person

Average waiting time before service. = Total waiting time (person)/Total no. of arrivals = 39/12 = 3.25 minutes. Average time a person spends in the system. = Service time + Average waiting time before service = 5 + 3.25 = 8.25 minutes.

Zicom Electronics wants to determine the order size for calculators. The demand and lead time are probabilistic and their distributions are given below:

Demand / week (thousands) 0 1 2 3 Probability Lead time Probability

0.2 0.4 0.3 0.1

2 3 4

0.3 0.4 0.3

The cost of placing an order is Rs. 100 per order and the holding cost for 1000 calculators is Rs. 2 per week. The shortage cost is Rs. 20 per thousand. Whenever the inventory level is equal to or below 2000, an order is placed equal to the difference between the current inventory balance and specified maximum replenishment level equal to 4000.

** Simulate the policy for 10 weeks. Assume the following:
**

± the beginning inventory is 3000 units ± no back orders are permitted ± each order is placed at the beginning of the week following the drop in inventory level to (or below) the reorder point ± the replenishment orders are received at the beginning of the week.

Using the daily demand and lead time distributions, we assign a set of random numbers to represent the range of values of variables as shown in table 1 & table 2.

Table 1

Demand / Probability Cumulative Random week Probability Numbers (thousand s) 0 0.2 0.2 00-19 1 0.4 0.6 20-59 2 0.3 0.9 60-89 3 0.1 1.0 90-99

Table:2

Lead time (weeks) 2 3 4

Probability 0.3 0.4 0.3

Cumulative Probability 0.3 0.7 1.0

Random Numbers 00-29 30-69 70-99

At the start of simulation, the first random number 31 generates a demand of 1000 units, as shown in table 3. The demand is determined from the cumulative probability values in table 1. At the end of first week, the closing balance is 2000 units, which is equal to the reorder level; therefore, an order for 2000 (4000-2000) units is placed. The random number generated is 29, so the lead time is 2 weeks. The lead time is determined from the cumulative probability values in table 2. Since closing balance is 2000 units, the holding cost is Rs. 4

In the second week, the random number 70 generates a demand of 2000 units. Therefore, the closing balance at the end of second week is reduced to zero units. In the third week, the demand for 1000 units can't be fulfilled because the available inventory is zero. This results in the shortage cost of Rs. 20. The 2000 units ordered in the first week are received at the beginning of fourth week. The random number 86 generates a demand of 2000 units, and, hence closing stock is zero. Therefore, an order for 4000 (4000-0) units is placed. The random number generated is 83, so the lead time is 4 weeks. Therefore, the second shortage occurs in the fifth week. The units ordered at the end of fourth week are received in the beginning of ninth week.

Table 3 Week Opening Demand Balance Random Units Inventor Number ('000) y ('000) s 3 2 0 2* 0 0 0 0 4* 3 31 70 53 86 32 78 26 64 45 12 1 2 1 2 1 2 1 2 1 0 13 Closing Lead Time Balance Random Weeks Inventor Number y ('000) s 2 0 -1 0 -1 -2 -1 -2 3 3 29 83 2 4 6 Quantit Costs y Holding Shortag Ordered Cost e Cost ('000) (Rs.) (Rs.) 2 4 4 6 6 20 20 40 20 40 -

1 2 3 4 5 6 7 8 9 10 Total

Average Inventory = 8000/10 = 800 units. The average inventory is calculated by adding the closing inventory balances (ignoring negative balances) and dividing by the number of weeks. Weekly average cost = Ordering Cost + Inventory Holding Cost + Shortage Cost Ordering Cost = (100 X 2)/10 = Rs. 20 Inventory Holding Cost = (800 X 2)/1000 = Rs. 1.60

Shortage Cost = [20 X (1 + 1 + 2 + 1 + 2)]/10 = Rs. 14 Weekly average cost = Rs. 20 + Rs. 1.60 + Rs. 14 = Rs. 35.60 It should be noted that the shortage cost is high as compared to holding cost. The shortage cost can be reduced by increasing the reorder level. Average lead time = 6/2 = 3 weeks Average demand per week = 13000/10 = 1300 units Average demand during lead time = 3 X 1300 = 3900 units Maximum lead time = 4 weeks Maximum weekly demand = 2000 units Maximum demand during lead time = 4 x 2000 = 8000 units Thus, the best reorder point should be somewhere between 3900 to 8000 units.

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