SIMULATION

DEFINITION:

“Simulation is the process of designing a

model of a real system and conducting
experiments with this model for the purpose of
either understanding the behavior of the
system and/or evaluating various strategies
for the operation of the system.”
SYSTEM

Measure/estimate performance
Improve operation
Prepare for failures System

Experiment Experiment with Experiment with a

with the a physical model mathematical model
actual system of the system of the system

Mathematical
Simulation
Analysis
CLASSIFICATION OF SIMULATION MODELS

Static (Monte Carlo) Dynamic Systems

Represents the system at a particular point

in time Represents the system behaviour over time

• Risk Analysis in Business Continuous Simulation:

• Water Level in a Dam
Discrete Event Simulation:
• System quantities (state variables) change
with events

• Queueing Systems
• Inventory Systems
ADVANTAGES

• Can be used to study existing systems without disrupting the

ongoing operations.

• Proposed systems can be “tested” before committing resources.

• Allows us to control time.

• Allows us to identify bottlenecks.

• Allows us to gain insight into which variables are most

important to system performance.
DISADVANTAGES

• Model building is an art as well as a science. The quality

of the analysis depends on the quality of the model and the
skill of the modeler

• Simulation results are sometimes hard to interpret.

• Simulation analysis can be time consuming

•Often expensive and time consuming to develop

•An invalid model may result with confidence in wrong results.

 HOW TO SIMULATE

• By hand
• Spreadsheets
• Programming in General Purpose Languages
• Simulation Languages
• SIMAN

• Simulation Packages
• ARENA, EXTEND, STROBOSCOPE, UM-CYCLONE
COMPONENTS OF A SYSTEM
Resources: what entities compete for
– Entity seizes a resource, uses it, releases it

– Resource being assigned to an entity, rather than an entity

“belonging to” a resource

– “A” resource can have several units of capacity which can be

changed during the simulation
 Phases of simulation
• Definition of problem

• Construction of model

• Experimentation with model

• Evaluation of result
COMPONENTS OF A SYSTEM
Variable: A piece of information that reflects some
characteristic of the whole system, not of specific entities
– Entities can access, change some variables

State: A collection of variables that contains all the

information necessary to describe the system at any time

Event: An instantaneous occurrence that changes the state of

the system

Activity: represents a time period of specified length.

 DATA COLLECTION & ANALYSIS

• Collect data for input analysis and validation

• Analysis of the data

– Determine the random variables
– Fit distribution functions
 ANALYSIS OF RESULTS

• Statistical tests for significance and ranking

– Point Estimation
– Confidence-Interval Estimation

• Interpretation of results

• More runs?
 Monte-Carlo Simulation
• Estimate the demand of cement bags for next 10days

Demand 5 6 7 8 9 10 11 12
No . Of days 4 10 16 50 62 38 12 8
 Random Numbers
 Uniformly distributed numbers in [0,1]

 Most useful method for obtaining random numbers

– Table
– Calculator
– Excel

 How random are these pseudo random numbers?

 R. No
40 10 8 21 91 16 94 91 10 18 47 7 2 77
1 30 51 22 89 75 48 12 48 41 61 54 69 53
43 2 93 83 21 95 75 12 45 59 6 59 47 81
91 70 19 85 25 22 27 75 89 24 92 90 16 80
18 84 37 56 2 48 32 58 73 98 96 30 61 27
25 74 57 94 41 28 8 87 2 48 17 18 63 25
80 65 81 61 8 4 21 88 69 60 73 10 44 6
35 87 23 85 66 74 53 67 28 15 77 24 88 55
21 61 90 88 72 75 17 59 78 36 49 21 40 90
65 41 10 27 12 87 28 90 41 46 26 50 3 40
22 88 24 53 10 92 44 27 84 20 48 51 99 63
98 29 4 63 65 30 47 78 3 75 38 69 67 95
53 31 24 24 0 28 39 36 85 48 7 36 49 4
16
 R. No
40 10 8 21 91 16 94 91 10 18 47 7 2 77
1 30 51 22 89 75 48 12 48 41 61 54 69 53
43 2 93 83 21 95 75 12 45 59 6 59 47 81
91 70 19 85 25 22 27 75 89 24 92 90 16 80
18 84 37 56 2 48 32 58 73 98 96 30 61 27
25 74 57 94 41 28 8 87 2 48 17 18 63 25
80 65 81 61 8 4 21 88 69 60 73 10 44 6
35 87 23 85 66 74 53 67 28 15 77 24 88 55
21 61 90 88 72 75 17 59 78 36 49 21 40 90
65 41 10 27 12 87 28 90 41 46 26 50 3 40
22 88 24 53 10 92 44 27 84 20 48 51 99 63
98 29 4 63 65 30 47 78 3 75 38 69 67 95
53 31 24 24 0 28 39 36 85 48 7 36 49 4
17
Determine the critical path
Activity Precedence Duration : Probability

3 :0.20
A - 4 :0.60
5 :0.20

4 :0.20
B - 5 :0.70
6 :0.10

1 :0.15
C A 3 :0.75
5 :0.10
4 :0.30
D B, C 5 :0.50
6 :0.20
3 :0.20
E D 4 :0.55
5 :0.25
4 :0.10
F D 5 :0.80
6 :0.1
1 :0.40
G E, F 2 :0.30
3 :0.20
 A B C D E F G
R. Dur R. Dur R. Dur R. Dur R. Dur R. Dur R No Dur
No No No No No No
1
2
3
4
5

Sim. Run Critical Act. Proj. Duration Critical path

Dur
1
2
3
4
5
 • An electric company produces 100 motors a day but the deviation occur owing to
many reasons. The production can be described by following probability
distribution. The finished motors are transported to warehouse by truck with
varying capacity. The capacity of truck and their availability is given by . Determine
the average empty space in truck and also motors waiting to be transported on the
basis on 20 runs

Production per probability

day
96 0.06
97 0.08 Truck Probability
capacity
98 0.10
99 0.25
99 0.16
100 0.35
100 0.20
101 0.25
101 0.16
102 0.15
102 0.10
103 0.08
08/12/22 104 0.06 20
• The dealer of certain product for which the probability distribution for daily
demand and lead time based on historic data is

Demand 3 4 5 6 7 8 9 10 11 12
Probability 0.02 0.08 0.11 0.16 0.19 0.13 0.10 0.08 0.07 0.06

Lead time (days) 2 3 4 5

Probability 0.20 0.30 0.35 0.15

The ordering cost is found to be Rs80,000/- per order, holding cost is Rs 2000/-
per average inventory, while the average unit shortage cost is Rs 20,000/- per
unit
Assume the re order level to be 20 units, reorder quantity is 40 units and initial
quantity is 30 units

08/12/22 21
Demand Probability Cumulative R. No. Range
5 0.02 0.02 00-01
6 0.05 0.07 02-06
7 0.08 0.15 07-14
8 0.25 0.40 15-39
9 0.31 0.71 40-70
10 0.19 0.90 71-89
11 0.06 0.96 90-95
12 0.04 100 96-99
Determine critical path for 20 simulation runs and
obtain the mean project duration. Compare the result by
determining the expected completion time of the
project.

Activity Preceden 1 2 3 4 5 6
ce
A - 0.2 0.4 0.4

B - 0.3 0.7

C A 0.3 0.3 0.4

D B 0.2 0.6 0.2

E C, D 0.6 0.4

F C, D 0.8 0.2

G F 0.3 0.5 0.2

H Last Act 0.1 0.2 0.3 0.4

23
R. No
40 10 8 21 91 16 94 91 10 18 47 7 2 77
1 30 51 22 89 75 48 12 48 41 61 54 69 53
43 2 93 83 21 95 75 12 45 59 6 59 47 81
91 70 19 85 25 22 27 75 89 24 92 90 16 80
18 84 37 56 2 48 32 58 73 98 96 30 61 27
25 74 57 94 41 28 8 87 2 48 17 18 63 25
80 65 81 61 8 4 21 88 69 60 73 10 44 6
35 87 23 85 66 74 53 67 28 15 77 24 88 55
21 61 90 88 72 75 17 59 78 36 49 21 40 90
65 41 10 27 12 87 28 90 41 46 26 50 3 40
22 88 24 53 10 92 44 27 84 20 48 51 99 63
98 29 4 63 65 30 47 78 3 75 38 69 67 95
53 31 24 24 0 28 39 36 85 48 7 36 49 4
24
R. No
40 10 8 21 91 16 94 91 10 18 47 7 2 77
1 30 51 22 89 75 48 12 48 41 61 54 69 53
43 2 93 83 21 95 75 12 45 59 6 59 47 81
91 70 19 85 25 22 27 75 89 24 92 90 16 80
18 84 37 56 2 48 32 58 73 98 96 30 61 27
25 74 57 94 41 28 8 87 2 48 17 18 63 25
80 65 81 61 8 4 21 88 69 60 73 10 44 6
35 87 23 85 66 74 53 67 28 15 77 24 88 55
21 61 90 88 72 75 17 59 78 36 49 21 40 90
65 41 10 27 12 87 28 90 41 46 26 50 3 40
22 88 24 53 10 92 44 27 84 20 48 51 99 63
98 29 4 63 65 30 47 78 3 75 38 69 67 95
53 31 24 24 0 28 39 36 85 48 7 36 49 4
25
• An electric company produces 100 motors a day but the deviation occur owing to many reasons.
The production can be described by following probability distribution. The finished motors are
transported to warehouse by truck with varying capacity. The capacity of truck and their
availability is given by . Determine the average empty space in truck and also motors waiting to
be transported on the basis on 20 runs

Production per probability

day
96 0.06
97 0.08
98 0.10 Truck Probability
99 0.16 capacity

100 0.20 99 0.25

101 0.16 100 0.35

102 0.10 101 0.25
103 0.08 102 0.15
104 0.06
08/12/22 26
 • The dealer of certain product for which the probability distribution for daily
demand and lead time based on historic data is

Demand 3 4 5 6 7 8 9 10 11 12
Probability 0.02 0.08 0.11 0.16 0.19 0.13 0.10 0.08 0.07 0.06

Lead time (days) 2 3 4 5

Probability 0.20 0.30 0.35 0.15

The ordering cost is found to be Rs80,000/- per order, holding cost is Rs 2000/-
per average inventory, while the average unit shortage cost is Rs 20,000/- per
unit
Assume the re order level to be 20 units, reorder quantity is 40 units and initial
quantity is 30 units

08/12/22 27
#2
A builder has two projects to develop but he lacks fund for
both simultaneously. He can choose either project A and
then B or vice versa. He can choose A first and then stop or
if A is successful invest in B or vice versa. The probability of
success for A is 0.7 and that for B is 0.4. both projects
require an initial investment of Rs20,Crores. If successful
project A will return Rs30 Crores (over Investment) and B
will return Rs50 Crores (over Investment). There will not be
any return in case of failure.
Determine the best strategy.