Harrell−Ghosh−Bo I. Study 1.

© The
wden: Simulation Chapters Introduction McGraw−Hill
Using ProModel, to Companies,
Second Edition

C H A P T E R

1 INTRODUCTION
TO
SIMULATION

“Man is a tool using animal. . . . Without tools he is nothing, with tools he

is all.”
—Thomas Carlyle

1.1 Introduction
On March 19, 1999, the following story appeared in The Wall Street Journal:
Captain Chet Rivers knew that his 747-400 was loaded to the limit. The giant plane,
weighing almost 450,000 pounds by itself, was carrying a full load of passengers
and baggage, plus 400,000 pounds of fuel for the long flight from San
Francisco to Australia. As he revved his four engines for takeoff, Capt. Rivers
noticed that San Francisco’s famous fog was creeping in, obscuring the hills to the
north and west of the airport.
At full throttle the plane began to roll ponderously down the runway, slowly at
first but building up to flight speed well within normal limits. Capt. Rivers pulled
the throt- tle back and the airplane took to the air, heading northwest across the San
Francisco peninsula towards the ocean. It looked like the start of another routine
flight. Suddenly the plane began to shudder violently. Several loud explosions
shook the craft and smoke and flames, easily visible in the midnight sky,
illuminated the right wing. Although the plane was shaking so violently that it was
hard to read the instruments, Capt. Rivers was able to tell that the right inboard
engine was malfunctioning, back- firing violently. He immediately shut down the
engine, stopping the explosions and shaking.
However this introduced a new problem. With two engines on the left wing at
full power and only one on the right, the plane was pushed into a right turn,
bringing it directly towards San Bruno Mountain, located a few miles northwest of
the airport. Capt. Rivers instinctively turned his control wheel to the left to bring
the plane back on course. That action extended the ailerons—control surfaces on
the trailing edges of the wings—to tilt the plane back to the left. However, it
also extended the

3
4 Part I Study Chapters

spoilers—panels on the tops of the wings—increasing drag and lowering lift. With
the nose still pointed up, the heavy jet began to slow. As the plane neared stall speed,
the control stick began to shake to warn the pilot to bring the nose down to gain air
speed. Capt. Rivers immediately did so, removing that danger, but now San Bruno
Mountain was directly ahead. Capt. Rivers was unable to see the mountain due to
the thick fog that had rolled in, but the plane’s ground proximity sensor sounded an
au- tomatic warning, calling “terrain, terrain, pull up, pull up.” Rivers frantically
pulled back on the stick to clear the peak, but with the spoilers up and the plane
still in a skidding right turn, it was too late. The plane and its full load of 100
tons of fuel crashed with a sickening explosion into the hillside just above a
densely populated housing area.
“Hey Chet, that could ruin your whole day,” said Capt. Rivers’s supervisor, who
was sitting beside him watching the whole thing. “Let’s rewind the tape and see
what you did wrong.” “Sure Mel,” replied Chet as the two men stood up and
stepped out- side the 747 cockpit simulator. “I think I know my mistake already. I
should have used my rudder, not my wheel, to bring the plane back on course. Say,
I need a breather after that experience. I’m just glad that this wasn’t the real thing.”
The incident above was never reported in the nation’s newspapers, even though
it would have been one of the most tragic disasters in aviation history, because it
never really happened. It took place in a cockpit simulator, a device which uses com-
puter technology to predict and recreate an airplane’s behavior with gut-wrenching
realism.

The relief you undoubtedly felt to discover that this disastrous incident was
just a simulation gives you a sense of the impact that simulation can have in
avert- ing real-world catastrophes. This story illustrates just one of the many
ways sim- ulation is being used to help minimize the risk of making costly and
sometimes fatal mistakes in real life. Simulation technology is finding its way
into an in- creasing number of applications ranging from training for aircraft
pilots to the testing of new product prototypes. The one thing that these
applications have in common is that they all provide a virtual environment that
helps prepare for real- life situations, resulting in significant savings in time,
money, and even lives.
One area where simulation is finding increased application is in manufactur-
ing and service system design and improvement. Its unique ability to accurately
predict the performance of complex systems makes it ideally suited for
systems planning. Just as a flight simulator reduces the risk of making costly
errors in ac- tual flight, system simulation reduces the risk of having systems
that operate inef- ficiently or that fail to meet minimum performance
requirements. While this may not be life-threatening to an individual, it certainly
places a company (not to men- tion careers) in jeopardy.
In this chapter we introduce the topic of simulation and answer the
following questions:
• What is simulation?
• Why is simulation used?
• How is simulation performed?
• When and where should simulation be used?
 Chapter 1 Introduction to Simulation 5

• What are the qualifications for doing simulation?

• How is simulation economically justified?
The purpose of this chapter is to create an awareness of how simulation is
used to visualize, analyze, and improve the performance of manufacturing and
service systems.

1.2 What Is Simulation?

The Oxford American Dictionary (1980) defines simulation as a way “to repro-
duce the conditions of a situation, as by means of a model, for study or testing or
training, etc.” For our purposes, we are interested in reproducing the operational
behavior of dynamic systems. The model that we will be using is a computer
model. Simulation in this context can be defined as the imitation of a dynamic
sys- tem using a computer model in order to evaluate and improve system
perfor- mance. According to Schriber (1987), simulation is “the modeling of a
process or system in such a way that the model mimics the response of the
actual system to events that take place over time.” By studying the behavior of
the model, we can gain insights about the behavior of the actual system.

Simulation is the imitation of a dynamic system

using a computer model in order to evaluate and
improve system performance.

In practice, simulation is usually performed using commercial simulation

software like ProModel that has modeling constructs specifically designed for
capturing the dynamic behavior of systems. Performance statistics are gathered
during the simulation and automatically summarized for analysis. Modern simu-
lation software provides a realistic, graphical animation of the system being
mod- eled (see Figure 1.1). During the simulation, the user can interactively
adjust the animation speed and change model parameter values to do “what
if” analysis on the fly. State-of-the-art simulation technology even provides
optimization capability—not that simulation itself optimizes, but scenarios that
satisfy defined feasibility constraints can be automatically run and analyzed
using special goal- seeking algorithms.
This book focuses primarily on discrete-event simulation, which models the
effects of the events in a system as they occur over time. Discrete-event simula-
tion employs statistical methods for generating random behavior and estimating
6 Part I Study Chapters

FIGURE 1.1
Simulation provides animation capability.

model performance. These methods are sometimes referred to as Monte Carlo

methods because of their similarity to the probabilistic outcomes found in games
of chance, and because Monte Carlo, a tourist resort in Monaco, was such a
popular center for gambling.

1.3 Why Simulate?

Rather than leave design decisions to chance, simulation provides a way to
validate whether or not the best decisions are being made. Simulation avoids the
expensive, time-consuming, and disruptive nature of traditional trial-and-error
techniques.

Trial-and-error approaches are

expensive, time consuming, and disruptive.

With the emphasis today on time-based competition, traditional trial-and-error

methods of decision making are no longer adequate. Regarding the shortcoming of
Chapter 1 Introduction to Simulation 7

trial-and-error approaches in designing manufacturing systems, Solberg (1988)

notes,
The ability to apply trial-and-error learning to tune the performance of
manufacturing systems becomes almost useless in an environment in which changes
occur faster than the lessons can be learned. There is now a greater need for formal
predictive method- ology based on understanding of cause and effect.
The power of simulation lies in the fact that it provides a method of analysis
that is not only formal and predictive, but is capable of accurately predicting the
performance of even the most complex systems. Deming (1989) states,
“Manage- ment of a system is action based on prediction. Rational prediction
requires sys- tematic learning and comparisons of predictions of short-term
and long-term results from possible alternative courses of action.” The key to
sound manage- ment decisions lies in the ability to accurately predict the
outcomes of alternative courses of action. Simulation provides precisely that
kind of foresight. By simu- lating alternative production schedules, operating
policies, staffing levels, job priorities, decision rules, and the like, a manager
can more accurately predict out- comes and therefore make more informed and
effective management decisions. With the importance in today’s competitive
market of “getting it right the first time,” the lesson is becoming clear: if at
first you don’t succeed, you probably should have simulated it.
By using a computer to model a system before it is built or to test operating
policies before they are actually implemented, many of the pitfalls that are often
encountered in the start-up of a new system or the modification of an existing
sys- tem can be avoided. Improvements that traditionally took months and even
years of fine-tuning to achieve can be attained in a matter of days or even
hours. Be- cause simulation runs in compressed time, weeks of system operation
can be sim- ulated in only a few minutes or even seconds. The characteristics
of simulation that make it such a powerful planning and decision-making tool
can be summa- rized as follows:
• Captures system interdependencies.
• Accounts for variability in the system.
• Is versatile enough to model any system.
• Shows behavior over time.
• Is less costly, time consuming, and disruptive than experimenting on the
actual system.
• Provides information on multiple performance measures.
• Is visually appealing and engages people’s interest.
• Provides results that are easy to understand and communicate.
• Runs in compressed, real, or even delayed time.
• Forces attention to detail in a design.
Because simulation accounts for interdependencies and variation, it provides
insights into the complex dynamics of a system that cannot be obtained using
8 Part I Study Chapters

other analysis techniques. Simulation gives systems planners unlimited freedom

to try out different ideas for improvement, risk free—with virtually no cost, no
waste of time, and no disruption to the current system. Furthermore, the results
are both visual and quantitative with performance statistics automatically
reported on all measures of interest.
Even if no problems are found when analyzing the output of simulation, the
exercise of developing a model is, in itself, beneficial in that it forces one to
think through the operational details of the process. Simulation can work with
inaccu- rate information, but it can’t work with incomplete information. Often
solutions present themselves as the model is built—before any simulation run
is made. It is a human tendency to ignore the operational details of a design or
plan until the implementation phase, when it is too late for decisions to
have a significant impact. As the philosopher Alfred North Whitehead
observed, “We think in gen- eralities; we live detail” (Audon 1964). System
planners often gloss over the details of how a system will operate and then get
tripped up during implementa- tion by all of the loose ends. The expression
“the devil is in the details” has definite application to systems planning.
Simulation forces decisions on critical details so they are not left to chance or
to the last minute, when it may be too late.
Simulation promotes a try-it-and-see attitude that stimulates innovation and
encourages thinking “outside the box.” It helps one get into the system with
sticks and beat the bushes to flush out problems and find solutions. It also puts
an end to fruitless debates over what solution will work best and by how much.
Simulation takes the emotion out of the decision-making process by
providing objective evidence that is difficult to refute.

1.4 Doing Simulation

Simulation is nearly always performed as part of a larger process of system
design or process improvement. A design problem presents itself or a need for
improve- ment exists. Alternative solutions are generated and evaluated,
and the best solution is selected and implemented. Simulation comes into play
during the eval- uation phase. First, a model is developed for an alternative
solution. As the model is run, it is put into operation for the period of interest.
Performance statistics (uti- lization, processing time, and so on) are gathered
and reported at the end of the run. Usually several replications (independent
runs) of the simulation are made. Averages and variances across the replications
are calculated to provide statistical estimates of model performance. Through an
iterative process of modeling, simu- lation, and analysis, alternative
configurations and operating policies can be tested to determine which solution
works the best.
Simulation is essentially an experimentation tool in which a computer
model of a new or existing system is created for the purpose of conducting
experiments. The model acts as a surrogate for the actual or real-world
system. Knowledge gained from experimenting on the model can be transferred
to the real system (see Figure 1.2). When we speak of doing simulation, we
are talking about “the
 Chapter 1 Introduction to Simulation 9

FIGURE 1.2
Simulation provides System
a virtual method for
doing system
experimentation.

Concept

Model

process of designing a model of a real system and conducting experiments with

this model” (Shannon 1998). Conducting experiments on a model reduces the
time, cost, and disruption of experimenting on the actual system. In this respect,
simulation can be thought of as a virtual prototyping tool for demonstrating
proof of concept.
The procedure for doing simulation follows the scientific method of (1) for-
mulating a hypothesis, (2) setting up an experiment, (3) testing the hypothesis
through experimentation, and (4) drawing conclusions about the validity of the
hypothesis. In simulation, we formulate a hypothesis about what design or
operating policies work best. We then set up an experiment in the form of a
simulation model to test the hypothesis. With the model, we conduct multiple
replications of the experiment or simulation. Finally, we analyze the simulation
results and draw conclusions about our hypothesis. If our hypothesis was cor-
rect, we can confidently move ahead in making the design or operational
changes (assuming time and other implementation constraints are satisfied).
As shown in Figure 1.3, this process is repeated until we are satisfied with the
results.
By now it should be obvious that simulation itself is not a solution tool but
rather an evaluation tool. It describes how a defined system will behave; it does
not prescribe how it should be designed. Simulation doesn’t compensate for
one’s ignorance of how a system is supposed to operate. Neither does it excuse
one from being careful and responsible in the handling of input data and the
interpretation of output results. Rather than being perceived as a substitute for
thinking, simula- tion should be viewed as an extension of the mind that enables
one to understand the complex dynamics of a system.
10 Part I Study Chapters

FIGURE 1.3
Start
The process of
simulation
experimentation
.

Formulate a
hypothesis

Develop a
simulation model

No

Run simulation
experiment

Hypothesis
correct?

Yes

End

1.5 Use of Simulation

Simulation began to be used in commercial applications in the 1960s. Initial
models were usually programmed in FORTRAN and often consisted of
thousands of lines of code. Not only was model building an arduous task, but
extensive de- bugging was required before models ran correctly. Models
frequently took a year or more to build and debug so that, unfortunately, useful
results were not obtained until after a decision and monetary commitment had
already been made. Lengthy simulations were run in batch mode on expensive
mainframe computers where CPU time was at a premium. Long development
cycles prohibited major changes from being made once a model was built.
Only in the last couple of decades has simulation gained popularity as a
decision-making tool in manufacturing and service industries. For many compa-
nies, simulation has become a standard practice when a new facility is being
planned or a process change is being evaluated. It is fast becoming to systems
planners what spreadsheet software has become to financial planners.
Chapter 1 Introduction to Simulation 11

The surge in popularity of computer simulation can be attributed to the

following:

• Increased awareness and understanding of simulation technology.

• Increased availability, capability, and ease of use of simulation software.
• Increased computer memory and processing speeds, especially of PCs.
• Declining computer hardware and software costs.

Simulation is no longer considered a method of “last resort,” nor is it a tech-

nique reserved only for simulation “experts.” The availability of easy-to-use
sim- ulation software and the ubiquity of powerful desktop computers have
made simulation not only more accessible, but also more appealing to
planners and managers who tend to avoid any kind of solution that appears too
complicated. A solution tool is not of much use if it is more complicated than
the problem that it is intended to solve. With simple data entry tables and
automatic output reporting and graphing, simulation is becoming much easier to
use and the reluctance to use it is disappearing.
The primary use of simulation continues to be in the area of
manufacturing. Manufacturing systems, which include warehousing and
distribution systems, tend to have clearly defined relationships and formalized
procedures that are well suited to simulation modeling. They are also the
systems that stand to benefit the most from such an analysis tool since capital
investments are so high and changes are so disruptive. Recent trends to
standardize and systematize other business processes such as order processing,
invoicing, and customer support are boosting the application of simulation in
these areas as well. It has been observed that 80 percent of all business
processes are repetitive and can benefit from the same analysis techniques used
to improve manufacturing systems (Harrington 1991). With this being the case,
the use of simulation in designing and improving busi- ness processes of every
kind will likely continue to grow.
While the primary use of simulation is in decision support, it is by no means
limited to applications requiring a decision. An increasing use of simulation is
in the area of communication and visualization. Modern simulation software
in- corporates visual animation that stimulates interest in the model and
effectively communicates complex system dynamics. A proposal for a new
system design can be sold much easier if it can actually be shown how it will
operate.
On a smaller scale, simulation is being used to provide interactive,
computer- based training in which a management trainee is given the
opportunity to practice decision-making skills by interacting with the model
during the simulation. It is also being used in real-time control applications
where the model interacts with the real system to monitor progress and
provide master control. The power of simulation to capture system dynamics
both visually and functionally opens up numerous opportunities for its use in an
integrated environment.
Since the primary use of simulation is in decision support, most of our dis-
cussion will focus on the use of simulation to make system design and
operational decisions. As a decision support tool, simulation has been used to
help plan and
12 Part I Study Chapters

make improvements in many areas of both manufacturing and service industries.

Typical applications of simulation include
• Work-flow planning. • Throughput analysis.
• Capacity planning. • Productivity improvement.
• Cycle time reduction. • Layout analysis.
• Staff and resource planning. • Line balancing.
• Work prioritization. • Batch size optimization.
• Bottleneck analysis. • Production scheduling.
• Quality improvement. • Resource scheduling.
• Cost reduction. • Maintenance scheduling.
• Inventory reduction. • Control system design.

1.6 When Simulation Is Appropriate

Not all system problems that could be solved with the aid of simulation should
be solved using simulation. It is important to select the right tool for the task.
For some problems, simulation may be overkill—like using a shotgun to kill a
fly. Simulation has certain limitations of which one should be aware before
making a decision to apply it to a given situation. It is not a panacea for all
system-related problems and should be used only if the shoe fits. As a
general guideline, simulation is appropriate if the following criteria hold true:
• An operational (logical or quantitative) decision is being made.
• The process being analyzed is well defined and repetitive.
• Activities and events are interdependent and variable.
• The cost impact of the decision is greater than the cost of
doing the simulation.
• The cost to experiment on the actual system is greater than the
cost of simulation.
Decisions should be of an operational nature. Perhaps the most significant
limitation of simulation is its restriction to the operational issues associated with
systems planning in which a logical or quantitative solution is being sought. It is
not very useful in solving qualitative problems such as those involving technical
or sociological issues. For example, it can’t tell you how to improve machine re-
liability or how to motivate workers to do a better job (although it can assess the
impact that a given level of reliability or personal performance can have on
over- all system performance). Qualitative issues such as these are better
addressed using other engineering and behavioral science techniques.
Processes should be well defined and repetitive. Simulation is useful only if
the process being modeled is well structured and repetitive. If the process
doesn’t follow a logical sequence and adhere to defined rules, it may be difficult
to model. Simulation applies only if you can describe how the process operates.
This does
Chapter 1 Introduction to Simulation 13

not mean that there can be no uncertainty in the system. If random behavior can
be described using probability expressions and distributions, they can be simu-
lated. It is only when it isn’t even possible to make reasonable assumptions of
how a system operates (because either no information is available or behavior is
totally erratic) that simulation (or any other analysis tool for that matter)
becomes useless. Likewise, one-time projects or processes that are never
repeated the same way twice are poor candidates for simulation. If the scenario
you are modeling is likely never going to happen again, it is of little benefit to
do a simulation.
Activities and events should be interdependent and variable. A system may
have lots of activities, but if they never interfere with each other or are determin-
istic (that is, they have no variation), then using simulation is probably un-
necessary. It isn’t the number of activities that makes a system difficult to
analyze. It is the number of interdependent, random activities. The effect of
simple interde- pendencies is easy to predict if there is no variability in the
activities. Determining the flow rate for a system consisting of 10 processing
activities is very straightfor- ward if all activity times are constant and activities
are never interrupted. Likewise, random activities that operate independently of
each other are usually easy to ana- lyze. For example, 10 machines operating in
isolation from each other can be ex- pected to produce at a rate that is based on
the average cycle time of each machine less any anticipated downtime. It is the
combination of interdependencies and ran- dom behavior that really produces
the unpredictable results. Simpler analytical methods such as mathematical
calculations and spreadsheet software become less adequate as the number of
activities that are both interdependent and random in- creases. For this reason,
simulation is primarily suited to systems involving both interdependencies and
variability.
The cost impact of the decision should be greater than the cost of doing the
simulation. Sometimes the impact of the decision itself is so insignificant that it
doesn’t warrant the time and effort to conduct a simulation. Suppose, for
example, you are trying to decide whether a worker should repair rejects as
they occur or wait until four or five accumulate before making repairs. If you are
certain that the next downstream activity is relatively insensitive to whether
repairs are done sooner rather than later, the decision becomes inconsequential
and simulation is a wasted effort.
The cost to experiment on the actual system should be greater than the cost
of simulation. While simulation avoids the time delay and cost associated with
ex- perimenting on the real system, in some situations it may actually be quicker
and more economical to experiment on the real system. For example, the
decision in a customer mailing process of whether to seal envelopes before or
after they are addressed can easily be made by simply trying each method and
comparing the results. The rule of thumb here is that if a question can be
answered through direct experimentation quickly, inexpensively, and with
minimal impact to the current operation, then don’t use simulation.
Experimenting on the actual system also eliminates some of the drawbacks
associated with simulation, such as proving model validity.
There may be other situations where simulation is appropriate independent
of the criteria just listed (see Banks and Gibson 1997). This is certainly true in
the
14 Part I Study Chapters

case of models built purely for visualization purposes. If you are trying to sell a
system design or simply communicate how a system works, a realistic animation
created using simulation can be very useful, even though nonbeneficial from an
analysis point of view.

1.7 Qualifications for Doing Simulation

Many individuals are reluctant to use simulation because they feel unqualified.
Certainly some training is required to use simulation, but it doesn’t mean that
only statisticians or operations research specialists can learn how to use it.
Decision support tools are always more effective when they involve the decision
maker, es- pecially when the decision maker is also the domain expert or person
who is most familiar with the design and operation of the system. The process
owner or man- ager, for example, is usually intimately familiar with the
intricacies and idiosyn- crasies of the system and is in the best position to know
what elements to include in the model and be able to recommend alternative
design solutions. When per- forming a simulation, often improvements suggest
themselves in the very activity of building the model that the decision maker
might never discover if someone else is doing the modeling. This reinforces the
argument that the decision maker should be heavily involved in, if not actually
conducting, the simulation project.
To make simulation more accessible to non–simulation experts, products
have been developed that can be used at a basic level with very little training.
Unfortunately, there is always a potential danger that a tool will be used in a way
that exceeds one’s skill level. While simulation continues to become more user-
friendly, this does not absolve the user from acquiring the needed skills to make
intelligent use of it. Many aspects of simulation will continue to require
some training. Hoover and Perry (1989) note, “The subtleties and nuances of
model val- idation and output analysis have not yet been reduced to such a level
of rote that they can be completely embodied in simulation software.”
Modelers should be aware of their own inabilities in dealing with the
statisti- cal issues associated with simulation. Such awareness, however, should
not pre- vent one from using simulation within the realm of one’s expertise.
There are both a basic as well as an advanced level at which simulation can be
beneficially used. Rough-cut modeling to gain fundamental insights, for
example, can be achieved with only a rudimentary understanding of simulation.
One need not have exten- sive simulation training to go after the low-hanging
fruit. Simulation follows the 80–20 rule, where 80 percent of the benefit can be
obtained from knowing only 20 percent of the science involved (just make sure
you know the right 20 percent). It isn’t until more precise analysis is required
that additional statistical training and knowledge of experimental design are
needed.
To reap the greatest benefits from simulation, a certain degree of knowledge
and skill in the following areas is useful:
• Project management.
• Communication.
 Chapter 1 Introduction to Simulation 15

• Systems engineering.
• Statistical analysis and design of experiments.
• Modeling principles and concepts.
• Basic programming and computer skills.
• Training on one or more simulation products.
• Familiarity with the system being investigated.
Experience has shown that some people learn simulation more rapidly and
become more adept at it than others. People who are good abstract thinkers yet
also pay close attention to detail seem to be the best suited for doing simulation.
Such individuals are able to see the forest while still keeping an eye on the trees
(these are people who tend to be good at putting together 1,000-piece puzzles).
They are able to quickly scope a project, gather the pertinent data, and get a use-
ful model up and running without lots of starts and stops. A good modeler is
some- what of a sleuth, eager yet methodical and discriminating in piecing
together all of the evidence that will help put the model pieces together.
If short on time, talent, resources, or interest, the decision maker need not
despair. Plenty of consultants who are professionally trained and experienced
can provide simulation services. A competitive bid will help get the best price,
but one should be sure that the individual assigned to the project has good
credentials. If the use of simulation is only occasional, relying on a consultant
may be the preferred approach.

1.8 Economic Justification of Simulation

Cost is always an important issue when considering the use of any software tool,
and simulation is no exception. Simulation should not be used if the cost
exceeds the expected benefits. This means that both the costs and the benefits
should be carefully assessed. The use of simulation is often prematurely
dismissed due to the failure to recognize the potential benefits and savings it can
produce. Much of the reluctance in using simulation stems from the mistaken
notion that simulation is costly and very time consuming. This perception is
shortsighted and ignores the fact that in the long run simulation usually saves
much more time and cost than it consumes. It is true that the initial
investment, including training and start-up costs, may be between $10,000
and $30,000 (simulation products themselves generally range between $1,000
and $20,000). However, this cost is often recov- ered after the first one or two
projects. The ongoing expense of using simulation for individual projects is
estimated to be between 1 and 3 percent of the total project cost (Glenney and
Mackulak 1985). With respect to the time commitment involved in doing
simulation, much of the effort that goes into building the model is in arriving at
a clear definition of how the system operates, which needs to be done anyway.
With the advanced modeling tools that are now available, the actual model
development and running of simulations take only a small fraction (often less
than 5 percent) of the overall system design time.
16 Part I Study Chapters

Savings from simulation are realized by identifying and eliminating

problems and inefficiencies that would have gone unnoticed until system
implementation. Cost is also reduced by eliminating overdesign and removing
excessive safety factors that are added when performance projections are
uncertain. By identifying and eliminating unnecessary capital investments, and
discovering and correcting operating inefficiencies, it is not uncommon for
companies to report hundreds of thousands of dollars in savings on a single
project through the use of simulation. The return on investment (ROI) for
simulation often exceeds 1,000 percent, with payback periods frequently being
only a few months or the time it takes to com- plete a simulation project.
One of the difficulties in developing an economic justification for simulation
is the fact that it is usually not known in advance how much savings will be real-
ized until it is actually used. Most applications in which simulation has been
used have resulted in savings that, had the savings been known in advance,
would have looked very good in an ROI or payback analysis.
One way to assess in advance the economic benefit of simulation is to
assess the risk of making poor design and operational decisions. One need only
ask what the potential cost would be if a misjudgment in systems planning
were to occur. Suppose, for example, that a decision is made to add another
machine to solve a capacity problem in a production or service system. What are
the cost and proba- bility associated with this being the wrong decision? If the
cost associated with a wrong decision is $100,000 and the decision maker is
only 70 percent confident that the decision is correct, then there is a 30 percent
chance of incurring a cost of
$100,000. This results in a probable cost of $30,000 (.3 × $100,000). Using this
approach, many decision makers recognize that they can’t afford not to use simu-
lation because the risk associated with making the wrong decision is too high.
Tying the benefits of simulation to management and organizational goals
also provides justification for its use. For example, a company committed to
continu- ous improvement or, more specifically, to lead time or cost
reduction can be sold on simulation if it can be shown to be historically
effective in these areas. Simulation has gained the reputation as a best
practice for helping companies achieve organizational goals. Companies that
profess to be serious about perfor- mance improvement will invest in
simulation if they believe it can help them achieve their goals.
The real savings from simulation come from allowing designers to make
mistakes and work out design errors on the model rather than on the actual sys-
tem. The concept of reducing costs through working out problems in the design
phase rather than after a system has been implemented is best illustrated by the
rule of tens. This principle states that the cost to correct a problem increases by a
factor of 10 for every design stage through which it passes without being
detected (see Figure 1.4).
Simulation helps avoid many of the downstream costs associated with poor
decisions that are made up front. Figure 1.5 illustrates how the cumulative cost
resulting from systems designed using simulation can compare with the cost of
designing and operating systems without the use of simulation. Note that while
 Chapter 1 Introduction to Simulation 17

FIGURE 1.4
Cost of making Concept Desig Installation Operation
changes at n
subsequent stages of
system development.

Cost

System stage

FIGURE 1.5
System costs

Comparison of Cost
cumulative system without
costs with and simulation
without simulation.

Cost with
simulatio
n

Design Implementatio Operatio

phase n phase n phase

the short-term cost may be slightly higher due to the added labor and software
costs associated with simulation, the long-term costs associated with capital
investments and system operation are considerably lower due to better
efficiencies realized through simulation. Dismissing the use of simulation on
the basis of sticker price is myopic and shows a lack of understanding of the
long-term sav- ings that come from having well-designed, efficiently operating
systems.
Many examples can be cited to show how simulation has been used to avoid
costly errors in the start-up of a new system. Simulation prevented an
unnecessary expenditure when a Fortune 500 company was designing a facility
for producing and storing subassemblies and needed to determine the number of
containers re- quired for holding the subassemblies. It was initially felt that
3,000 containers
18 Part I Study Chapters

were needed until a simulation study showed that throughput did not improve
sig- nificantly when the number of containers was increased from 2,250 to
3,000. By purchasing 2,250 containers instead of 3,000, a savings of $528,375
was expected in the first year, with annual savings thereafter of over $200,000
due to the savings in floor space and storage resulting from having 750 fewer
containers (Law and McComas 1988).
Even if dramatic savings are not realized each time a model is built, simula-
tion at least inspires confidence that a particular system design is capable of
meet- ing required performance objectives and thus minimizes the risk often
associated with new start-ups. The economic benefit associated with instilling
confidence was evidenced when an entrepreneur, who was attempting to secure
bank financ- ing to start a blanket factory, used a simulation model to show the
feasibility of the proposed factory. Based on the processing times and
equipment lists supplied by industry experts, the model showed that the
output projections in the business plan were well within the capability of the
proposed facility. Although unfamiliar with the blanket business, bank officials
felt more secure in agreeing to support the venture (Bateman et al. 1997).
Often simulation can help improve productivity by exposing ways of
making better use of existing assets. By looking at a system holistically, long-
standing problems such as bottlenecks, redundancies, and inefficiencies that
previously went unnoticed start to become more apparent and can be eliminated.
“The trick is to find waste, or muda,” advises Shingo; “after all, the most
damaging kind of waste is the waste we don’t recognize” (Shingo 1992).
Consider the following actual examples where simulation helped uncover and
eliminate wasteful practices:
• GE Nuclear Energy was seeking ways to improve productivity without
investing large amounts of capital. Through the use of simulation, the
company was able to increase the output of highly specialized reactor
parts by 80 percent. The cycle time required for production of each part
was reduced by an average of 50 percent. These results were obtained
by running a series of models, each one solving production problems
highlighted by the previous model (Bateman et al. 1997).
• A large manufacturing company with stamping plants located throughout
the world produced stamped aluminum and brass parts on order according
to customer specifications. Each plant had from 20 to 50 stamping presses
that were utilized anywhere from 20 to 85 percent. A simulation study
was conducted to experiment with possible ways of increasing capacity
utilization. As a result of the study, machine utilization improved from an
average of 37 to 60 percent (Hancock, Dissen, and Merten 1977).
• A diagnostic radiology department in a community hospital was
modeled to evaluate patient and staff scheduling, and to assist in
expansion planning over the next five years. Analysis using the
simulation model enabled improvements to be discovered in operating
procedures that precluded the necessity for any major expansions in
department size (Perry and Baum 1976).
 Chapter 1 Introduction to Simulation 19

In each of these examples, significant productivity improvements were real-

ized without the need for making major investments. The improvements came
through finding ways to operate more efficiently and utilize existing resources
more effectively. These capacity improvement opportunities were brought to
light through the use of simulation.

1.9 Sources of Information on Simulation

Simulation is a rapidly growing technology. While the basic science and theory
remain the same, new and better software is continually being developed to
make simulation more powerful and easier to use. It will require ongoing
education for those using simulation to stay abreast of these new developments.
There are many sources of information to which one can turn to learn the latest
developments in simulation technology. Some of the sources that are available
include

• Conferences and workshops sponsored by vendors and

professional societies (such as, Winter Simulation Conference and
the IIE Conference).
• Professional magazines and journals (IIE Solutions, International
Journal of Modeling and Simulation, and the like).
• Websites of vendors and professional societies (www.promodel.com,
www.scs.org, and so on).
• Demonstrations and tutorials provided by vendors (like those on the
ProModel CD).
• Textbooks (like this one).

1.10 How to Use This Book

This book is divided into three parts. Part I contains chapters describing the sci-
ence and practice of simulation. The emphasis is deliberately oriented more to-
ward the practice than the science. Simulation is a powerful decision support
tool that has a broad range of applications. While a fundamental understanding
of how simulation works is presented, the aim has been to focus more on how to
use sim- ulation to solve real-world problems.
Part II contains ProModel lab exercises that help develop simulation skills.
ProModel is a simulation package designed specifically for ease of use, yet it
pro- vides the flexibility to model any discrete event or continuous flow
process. It is similar to other simulation products in that it provides a set of
basic modeling constructs and a language for defining the logical decisions that
are made in a sys- tem. Basic modeling objects in ProModel include entities
(the objects being processed), locations (the places where processing occurs),
resources (the agents used to process the entities), and paths (the course of
travel for entities and resources in moving between locations such as aisles
or conveyors). Logical
20 Part I Study Chapters

behavior such as the way entities arrive and their routings can be defined with
lit- tle, if any, programming using the data entry tables that are provided.
ProModel is used by thousands of professionals in manufacturing and service-
related indus- tries and is taught in hundreds of institutions of higher learning.
Part III contains case study assignments that can be used for student
projects to apply the theory they have learned from Part I and to try out the skills
they have ac- quired from doing the lab exercises (Part II). It is recommended
that students be as- signed at least one simulation project during the course.
Preferably this is a project performed for a nearby company or institution so it
will be meaningful. If such a project cannot be found, or as an additional
practice exercise, the case studies pro- vided should be useful. Student projects
should be selected early in the course so that data gathering can get started and
the project completed within the allotted time. The chapters in Part I are
sequenced to parallel an actual simulation project.

1.11Summary
Businesses today face the challenge of quickly designing and implementing
com- plex production and service systems that are capable of meeting
growing de- mands for quality, delivery, affordability, and service. With recent
advances in computing and software technology, simulation tools are now
available to help meet this challenge. Simulation is a powerful technology that
is being used with increasing frequency to improve system performance by
providing a way to make better design and management decisions. When used
properly, simulation can re- duce the risks associated with starting up a new
operation or making improve- ments to existing operations.
Because simulation accounts for interdependencies and variability, it pro-
vides insights that cannot be obtained any other way. Where important system
decisions are being made of an operational nature, simulation is an invaluable
decision-making tool. Its usefulness increases as variability and interdependency
increase and the importance of the decision becomes greater.
Lastly, simulation actually makes designing systems fun! Not only can a de-
signer try out new design concepts to see what works best, but the visualization
makes it take on a realism that is like watching an actual system in operation.
Through simulation, decision makers can play what-if games with a new system
or modified process before it actually gets implemented. This engaging process
stimulates creative thinking and results in good design decisions.

1.12 Review Questions

1. Define simulation.
2. What reasons are there for the increased popularity of computer
simulation?
 Chapter 1 Introduction to Simulation 21

3. What are two specific questions that simulation might help answer in a
bank? In a manufacturing facility? In a dental office?
4. What are three advantages that simulation has over alternative
approaches to systems design?
5. Does simulation itself optimize a system design? Explain.
6. How does simulation follow the scientific method?
7. A restaurant gets extremely busy during lunch (11:00 A.M. to 2:00 P.M.)
and is trying to decide whether it should increase the number of waitresses
from two to three. What considerations would you look at to determine
whether simulation should be used to make this decision?
8. How would you develop an economic justification for using simulation?
9. Is a simulation exercise wasted if it exposes no problems in a system
design? Explain.
10.A simulation run was made showing that a modeled factory could produce
130 parts per hour. What information would you want to know about the
simulation study before placing any confidence in the results?
11.A PC board manufacturer has high work-in-process (WIP) inventories, yet
machines and equipment seem underutilized. How could simulation help
solve this problem?
12.How important is a statistical background for doing simulation?
13.How can a programming background be useful in doing simulation?
14.Why are good project management and communication skills important in
simulation?
15.Why should the process owner be heavily involved in a simulation
project?
16.For which of the following problems would simulation likely be useful?
a. Increasing the throughput of a production line.
b. Increasing the pace of a worker on an assembly line.
c. Decreasing the time that patrons at an amusement park spend
waiting in line.
d. Determining the percentage defective from a particular machine.
e. Determining where to place inspection points in a process.
f. Finding the most efficient way to fill out an order form.

Reference
s Audon, Wyston Hugh, and L. Kronenberger. The Faber Book of Aphorisms. London: Faber
and Faber, 1964.
Banks, J., and R. Gibson. “10 Rules for Determining When Simulation Is Not Appropri-
ate.” IIE Solutions, September 1997, pp. 30–32.
Bateman, Robert E.; Royce O. Bowden; Thomas J. Gogg; Charles R. Harrell; and Jack
R. A. Mott. System Improvement Using Simulation. Utah: PROMODEL Corp., 1997.
22 Part I Study Chapters

Deming, W. E. Foundation for Management of Quality in the Western World. Paper read
at a meeting of the Institute of Management Sciences, Osaka, Japan, 24 July 1989.
Glenney, Neil E., and Gerald T. Mackulak. “Modeling & Simulation Provide Key to CIM
Implementation Philosophy.” Industrial Engineering, May 1985.
Hancock, Walton; R. Dissen; and A. Merten. “An Example of Simulation to Improve
Plant Productivity.” AIIE Transactions, March 1977, pp. 2–10.
Harrell, Charles R., and Donald Hicks. “Simulation Software Component Architecture
for Simulation-Based Enterprise Applications.” In Proceedings of the 1998 Winter
Simulation Conference, ed. D. J. Medeiros, E. F. Watson, J. S. Carson, and
M. S. Manivannan, pp. 1717–21. Institute of Electrical and Electronics Engineers,
Piscataway, New Jersey.
Harrington, H. James. Business Process Improvement. New York: McGraw-Hill, 1991.
Hoover, Stewart V., and Ronald F. Perry. Simulation: A Problem-Solving Approach.
Reading, MA: Addison-Wesley, 1989.
Law, A. M., and M. G. McComas. “How Simulation Pays Off.” Manufacturing
Engineer- ing, February 1988, pp. 37–39.
Mott, Jack, and Kerim Tumay. “Developing a Strategy for Justifying Simulation.” Indus-
trial Engineering, July 1992, pp. 38–42.
Oxford American Dictionary. New York: Oxford University Press, 1980. [compiled by]
Eugene Enrich et al.
Perry, R. F., and R. F. Baum. “Resource Allocation and Scheduling for a Radiology
Department.” In Cost Control in Hospitals. Ann Arbor, MI: Health Administration
Press, 1976.
Rohrer, Matt, and Jerry Banks. “Required Skills of a Simulation Analyst.” IIE Solutions,
May 1998, pp. 7–23.
Schriber, T. J. “The Nature and Role of Simulation in the Design of Manufacturing
Systems.” Simulation in CIM and Artificial Intelligence Techniques, ed. J. Retti and
K. E. Wichmann. S.D., CA.: Society for Computer Simulation, 1987, pp. 5–8.
Shannon, Robert E. “Introduction to the Art and Science of Simulation.” In
Proceedings of the 1998 Winter Simulation Conference, ed. D. J. Medeiros,
E. F. Watson,
J. S. Carson, and M. S. Manivannan, pp. 7–14. Piscataway, NJ: Institute of Electrical
and Electronics Engineers.
Shingo, Shigeo. The Shingo Production Management System—Improving Process Func-
tions. Trans. Andrew P. Dillon. Cambridge, MA: Productivity Press, 1992.
Solberg, James. “Design and Analysis of Integrated Manufacturing Systems.” In W. Dale
Compton. Washington, D.C.: National Academy Press, 1988, p. 4.
The Wall Street Journal, March 19, 1999. “United 747’s Near Miss Sparks a Widespread
Review of Pilot Skills,” p. A1.
Harrell−Ghosh−Bo I. Study 2. System © The
wden: Simulation Chapters Dynamics McGraw−Hill
Using ProModel, Companies,
Second Edition

C H A P T E R

2 SYSTEM DYNAMICS

“A fool with a tool is still a fool.”

—Unknown

1 Introduction
Knowing how to do simulation doesn’t make someone a good systems designer
any more than knowing how to use a CAD system makes one a good product
de- signer. Simulation is a tool that is useful only if one understands the nature
of the problem to be solved. It is designed to help solve systemic problems that
are op- erational in nature. Simulation exercises fail to produce useful results
more often because of a lack of understanding of system dynamics than a lack
of knowing how to use the simulation software. The challenge is in
understanding how the system operates, knowing what you want to achieve
with the system, and being able to identify key leverage points for best
achieving desired objectives. To illustrate the nature of this challenge, consider
the following actual scenario:
The pipe mill for the XYZ Steel Corporation was an important profit center, turning
steel slabs selling for under $200/ton into a product with virtually unlimited demand
selling for well over $450/ton. The mill took coils of steel of the proper thickness
and width through a series of machines that trimmed the edges, bent the steel
into a cylinder, welded the seam, and cut the resulting pipe into appropriate lengths,
all on a continuously running line. The line was even designed to weld the end of
one coil to the beginning of the next one “on the fly,” allowing the line to run
continually for days on end.
Unfortunately the mill was able to run only about 50 percent of its theoretical ca-
pacity over the long term, costing the company tens of millions of dollars a year in
lost revenue. In an effort to improve the mill’s productivity, management studied
each step in the process. It was fairly easy to find the slowest step in the line, but
additional study showed that only a small percentage of lost production was due to
problems at this “bottleneck” operation. Sometimes a step upstream from the
bottleneck would

23
24 Part I Study Chapters

have a problem, causing the bottleneck to run out of work, or a downstream step
would go down temporarily, causing work to back up and stop the bottleneck. Some-
times the bottleneck would get so far behind that there was no place to put incoming,
newly made pipe. In this case the workers would stop the entire pipe-making process
until the bottleneck was able to catch up. Often the bottleneck would then be idle
wait- ing until the newly started line was functioning properly again and the new
pipe had a chance to reach it. Sometimes problems at the bottleneck were actually
caused by im- proper work at a previous location.
In short, there was no single cause for the poor productivity seen at this plant.
Rather, several separate causes all contributed to the problem in complex ways.
Man- agement was at a loss to know which of several possible improvements
(additional or faster capacity at the bottleneck operation, additional storage space
between stations, better rules for when to shut down and start up the pipe-forming
section of the mill, better quality control, or better training at certain critical
locations) would have the most impact for the least cost. Yet the poor performance
of the mill was costing enor- mous amounts of money. Management was under
pressure to do something, but what should it be?
This example illustrates the nature and difficulty of the decisions that an
operations manager faces. Managers need to make decisions that are the “best”
in some sense. To do so, however, requires that they have clearly defined goals
and understand the system well enough to identify cause-and-effect
relationships.
While every system is different, just as every product design is different,
the basic elements and types of relationships are the same. Knowing how the
elements of a system interact and how overall performance can be improved are
essential to the effective use of simulation. This chapter reviews basic system
dynamics and answers the following questions:
• What is a system?
• What are the elements of a system?
• What makes systems so complex?
• What are useful system metrics?
• What is a systems approach to systems planning?
• How do traditional systems analysis techniques compare with simulation?

2 System Definition
We live in a society that is composed of complex, human-made systems that
we depend on for our safety, convenience, and livelihood. Routinely we rely on
transportation, health care, production, and distribution systems to provide
needed goods and services. Furthermore, we place high demands on the quality,
conve- nience, timeliness, and cost of the goods and services that are provided
by these systems. Remember the last time you were caught in a traffic jam, or
waited for what seemed like an eternity in a restaurant or doctor’s office?
Contrast that ex- perience with the satisfaction that comes when you find a
store that sells quality merchandise at discount prices or when you locate a
health care organization that
 Chapter 2 System Dynamics 25

provides prompt and professional service. The difference is between a system

that has been well designed and operates smoothly, and one that is poorly
planned and managed.
A system, as used here, is defined as a collection of elements that function
together to achieve a desired goal (Blanchard 1991). Key points in this definition
include the fact that (1) a system consists of multiple elements, (2) these
elements are interrelated and work in cooperation, and (3) a system exists for
the purpose of achieving specific objectives. Examples of systems are traffic
systems, political systems, economic systems, manufacturing systems, and
service systems. Our main focus will be on manufacturing and service systems
that process materials, information, and people.
Manufacturing systems can be small job shops and machining cells or large
production facilities and assembly lines. Warehousing and distribution as well as
entire supply chain systems will be included in our discussions of manufacturing
systems. Service systems cover a wide variety of systems including health care
facilities, call centers, amusement parks, public transportation systems, restau-
rants, banks, and so forth.
Both manufacturing and service systems may be termed processing
systems because they process items through a series of activities. In a
manufacturing sys- tem, raw materials are transformed into finished products.
For example, a bicycle manufacturer starts with tube stock that is then cut,
welded, and painted to pro- duce bicycle frames. In service systems, customers
enter with some service need and depart as serviced (and, we hope, satisfied)
customers. In a hospital emer- gency room, for example, nurses, doctors, and
other staff personnel admit and treat incoming patients who may undergo tests
and possibly even surgical proce- dures before finally being released.
Processing systems are artificial (they are human-made), dynamic (elements
interact over time), and usually stochastic (they exhibit random behavior).

3 System Elements
From a simulation perspective, a system can be said to consist of entities, activi-
ties, resources, and controls (see Figure 2.1). These elements define the
who, what, where, when, and how of entity processing. This model for
describing a

FIGURE 2.1 Incoming entities Outgoing entities

Activities
Elements of a
system.

Resources Controls

System
26 Part I Study Chapters

system corresponds closely to the well-established ICAM definition (IDEF)

process model developed by the defense industry (ICAM stands for an early Air
Force program in integrated computer-aided manufacturing). The IDEF
modeling paradigm views a system as consisting of inputs and outputs (that is,
entities), ac- tivities, mechanisms (that is, resources), and controls.

2.3.1 Entities
Entities are the items processed through the system such as products, customers,
and documents. Different entities may have unique characteristics such as cost,
shape, priority, quality, or condition. Entities may be further subdivided into the
following types:
• Human or animate (customers, patients, etc.).
• Inanimate (parts, documents, bins, etc.).
• Intangible (calls, electronic mail, etc.).
For most manufacturing and service systems, the entities are discrete items.
This is the case for discrete part manufacturing and is certainly the case for
nearly all service systems that process customers, documents, and others. For
some pro- duction systems, called continuous systems, a nondiscrete substance
is processed rather than discrete entities. Examples of continuous systems are oil
refineries and paper mills.

2.3.2 Activities
Activities are the tasks performed in the system that are either directly or
indirectly involved in the processing of entities. Examples of activities include
servicing a customer, cutting a part on a machine, or repairing a piece of equip-
ment. Activities usually consume time and often involve the use of resources.
Activities may be classified as
• Entity processing (check-in, treatment, inspection, fabrication, etc.).
• Entity and resource movement (forklift travel, riding in an elevator, etc.).
• Resource adjustments, maintenance, and repairs (machine setups, copy
machine repair, etc.).

2.3.3 Resources
Resources are the means by which activities are performed. They provide the
supporting facilities, equipment, and personnel for carrying out activities. While
resources facilitate entity processing, inadequate resources can constrain
process- ing by limiting the rate at which processing can take place.
Resources have characteristics such as capacity, speed, cycle time, and
reliability. Like entities, resources can be categorized as
• Human or animate (operators, doctors, maintenance personnel, etc.).
• Inanimate (equipment, tooling, floor space, etc.).
• Intangible (information, electrical power, etc.).
 Chapter 2 System Dynamics 27

Resources can also be classified as being dedicated or shared, permanent or

consumable, and mobile or stationary.

2.3.4 Controls
Controls dictate how, when, and where activities are performed. Controls impose
order on the system. At the highest level, controls consist of schedules, plans,
and policies. At the lowest level, controls take the form of written procedures
and ma- chine control logic. At all levels, controls provide the information and
decision logic for how the system should operate. Examples of controls include
• Routing sequences.
• Production plans.
• Work schedules.
• Task prioritization.
• Control software.
• Instruction sheets.

2.4 System Complexity

Elements of a system operate in concert with one another in ways that often
result in complex interactions. The word complex comes from the Latin
complexus, meaning entwined or connected together. Unfortunately, unaided
human intuition is not very good at analyzing and understanding complex
systems. Economist Herbert Simon called this inability of the human mind to
grasp real-world complexity “the principle of bounded rationality.” This
principle states that “the capacity of the human mind for formulating and
solving complex problems is very small compared with the size of the problem
whose solution is required for objectively rational behavior in the real world, or
even for a reasonable approxi- mation to such objective rationality” (Simon
1957).

Bounded rationality—our limited ability to grasp

real-world complexity.

While the sheer number of elements in a system can stagger the mind (the
number of different entities, activities, resources, and controls can easily exceed
100), the interactions of these elements are what make systems so complex and
28 Part I Study Chapters

difficult to analyze. System complexity is primarily a function of the following

two factors:
1. Interdependencies between elements so that each element affects other
elements.
2. Variability in element behavior that produces uncertainty.

Interdependencies Variability Complexity

These two factors characterize virtually all human-made systems and make
system behavior difficult to analyze and predict. As shown in Figure 2.2, the de-
gree of analytical difficulty increases exponentially as the number of interdepen-
dencies and random variables increases.

2.4.1 Interdependencies
Interdependencies cause the behavior of one element to affect other elements in
the system. For example, if a machine breaks down, repair personnel are put into
action while downstream operations become idle for lack of parts. Upstream
operations may even be forced to shut down due to a logjam in the entity flow
causing a blockage of activities. Another place where this chain reaction or
domino effect manifests itself is in situations where resources are shared
between
Degree of analytical difficulty

FIGURE 2.2
Analytical difficulty
as a function of the
number of
interdependencies and
random variables.

Number of interdependencies
and random variables
 Chapter 2 System Dynamics 29

two or more activities. A doctor treating one patient, for example, may be
unable to immediately respond to another patient needing his or her attention.
This delay in response may also set other forces in motion.
It should be clear that the complexity of a system has less to do with
the number of elements in the system than with the number of interdependent
rela- tionships. Even interdependent relationships can vary in degree, causing
more or less impact on overall system behavior. System interdependency may
be either tight or loose depending on how closely elements are linked.
Elements that are tightly coupled have a greater impact on system operation
and performance than elements that are only loosely connected. When an
element such as a worker or machine is delayed in a tightly coupled system, the
impact is immediately felt by other elements in the system and the entire
process may be brought to a screech- ing halt.
In a loosely coupled system, activities have only a minor, and often delayed,
impact on other elements in the system. Systems guru Peter Senge (1990) notes
that for many systems, “Cause and effect are not closely related in time and
space.” Sometimes the distance in time and space between cause-and-effect rela-
tionships becomes quite sizable. If enough reserve inventory has been
stockpiled, a truckers’ strike cutting off the delivery of raw materials to a
transmission plant in one part of the world may not affect automobile assembly
in another part of the world for weeks. Cause-and-effect relationships are like a
ripple of water that di- minishes in impact as the distance in time and space
increases.
Obviously, the preferred approach to dealing with interdependencies is to
eliminate them altogether. Unfortunately, this is not entirely possible for most
situations and actually defeats the purpose of having systems in the first place.
The whole idea of a system is to achieve a synergy that otherwise would be un-
attainable if every component were to function in complete isolation. Several
methods are used to decouple system elements or at least isolate their influence
so disruptions are not felt so easily. These include providing buffer inventories,
implementing redundant or backup measures, and dedicating resources to sin-
gle tasks. The downside to these mitigating techniques is that they often lead to
excessive inventories and underutilized resources. The point to be made here
is that interdependencies, though they may be minimized somewhat, are sim-
ply a fact of life and are best dealt with through effective coordination and
management.

2.4.2 Variability
Variability is a characteristic inherent in any system involving humans and
machinery. Uncertainty in supplier deliveries, random equipment failures, unpre-
dictable absenteeism, and fluctuating demand all combine to create havoc in
plan- ning system operations. Variability compounds the already unpredictable
effect of interdependencies, making systems even more complex and
unpredictable. Vari- ability propagates in a system so that “highly variable
outputs from one worksta- tion become highly variable inputs to another”
(Hopp and Spearman 2000).
30 Part I Study Chapters

TABLE 2.1 Examples of System Variability

Type of Variability Examples

Activity times Operation times, repair times, setup times, move times
Decisions To accept or reject a part, where to direct a particular customer, which
task to perform next
Quantities Lot sizes, arrival quantities, number of workers absent
Event intervals Time between arrivals, time between equipment failures
Attributes Customer preference, part size, skill level

Table 2.1 identifies the types of random variability that are typical of most manu-
facturing and service systems.
The tendency in systems planning is to ignore variability and calculate sys-
tem capacity and performance based on average values. Many commercial
sched- uling packages such as MRP (material requirements planning) software
work this way. Ignoring variability distorts the true picture and leads to
inaccurate perfor- mance predictions. Designing systems based on average
requirements is like deciding whether to wear a coat based on the average
annual temperature or pre- scribing the same eyeglasses for everyone based on
average eyesight. Adults have been known to drown in water that was only
four feet deep—on the average! Wherever variability occurs, an attempt should
be made to describe the nature or pattern of the variability and assess the range
of the impact that variability might have on system performance.
Perhaps the most illustrative example of the impact that variability can have
on system behavior is the simple situation where entities enter into a single
queue to wait for a single server. An example of this might be customers
lining up in front of an ATM. Suppose that the time between customer arrivals
is exponen- tially distributed with an average time of one minute and that they
take an average time of one minute, exponentially distributed, to transact their
business. In queu- ing theory, this is called an M/M/1 queuing system. If we
calculate system per- formance based solely on average time, there will never
be any customers waiting in the queue. Every minute that a customer arrives the
previous customer finishes his or her transaction. Now if we calculate the
number of customers waiting in line, taking into account the variation, we will
discover that the waiting line grows to infinity (the technical term is that the
system “explodes”). Who would guess that in a situation involving only one
interdependent relationship that variation alone would make the difference
between zero items waiting in a queue and an in- finite number in the queue?
By all means, variability should be reduced and even eliminated wherever
possible. System planning is much easier if you don’t have to contend with it.
Where it is inevitable, however, simulation can help predict the impact it will
have on system performance. Likewise, simulation can help identify the
degree of improvement that can be realized if variability is reduced or even
eliminated. For
 Chapter 2 System Dynamics 31

example, it can tell you how much reduction in overall flow time and flow time
variation can be achieved if operation time variation can be reduced by, say,
20 percent.

2.5 System Performance Metrics

Metrics are measures used to assess the performance of a system. At the
highest level of an organization or business, metrics measure overall
performance in terms of profits, revenues, costs relative to budget, return on
assets, and so on. These metrics are typically financial in nature and show
bottom-line performance. Unfortunately, such metrics are inherently lagging,
disguise low-level operational performance, and are reported only periodically.
From an operational standpoint, it is more beneficial to track such factors as
time, quality, quantity, efficiency, and utilization. These operational metrics
reflect immediate activity and are directly controllable. They also drive the
higher financially related metrics. Key opera- tional metrics that describe the
effectiveness and efficiency of manufacturing and service systems include the
following:
• Flow time—the average time it takes for an item or customer to be
processed through the system. Synonyms include cycle time, throughput
time, and manufacturing lead time. For order fulfillment systems, flow
time may also be viewed as customer response time or turnaround time.
A closely related term in manufacturing is makespan, which is the time
to process a given set of jobs. Flow time can be shortened by reducing
activity times that contribute to flow time such as setup, move, operation,
and inspection time. It can also be reduced by decreasing work-in-process
or average number of entities in the system. Since over 80 percent of
cycle time is often spent waiting in storage or queues, elimination of
buffers tends to produce the greatest reduction in cycle time. Another
solution is to add more resources, but this can be costly.
• Utilization—the percentage of scheduled time that personnel, equipment,
and other resources are in productive use. If a resource is not being
utilized, it may be because it is idle, blocked, or down. To increase
productive utilization, you can increase the demand on the resource or
reduce resource count or capacity. It also helps to balance work loads. In a
system with high variability in activity times, it is difficult to achieve high
utilization of resources. Job shops, for example, tend to have low machine
utilization. Increasing utilization for the sake of utilization is not a good
objective. Increasing the utilization of nonbottleneck resources, for
example, often only creates excessive inventories without creating
additional throughput.
• Value-added time—the amount of time material, customers, and so forth
spend actually receiving value, where value is defined as anything for
which the customer is willing to pay. From an operational standpoint,
32 Part I Study Chapters

value-added time is considered the same as processing time or time spent

actually undergoing some physical transformation or servicing. Inspection
time and waiting time are considered non-value-added time.
• Waiting time—the amount of time that material, customers, and so on
spend waiting to be processed. Waiting time is by far the greatest
component of non-value-added time. Waiting time can be decreased by
reducing the number of items (such as customers or inventory levels) in
the system. Reducing variation and interdependencies in the system can
also reduce waiting times. Additional resources can always be added,
but the trade-off between the cost of adding the resources and the
savings of reduced waiting time needs to be evaluated.
• Flow rate—the number of items produced or customers serviced per unit
of time (such as parts or customers per hour). Synonyms include
production rate, processing rate, or throughput rate. Flow rate can be
increased by better management and utilization of resources, especially
the limiting or bottleneck resource. This is done by ensuring that the
bottleneck operation or resource is never starved or blocked. Once system
throughput matches the bottleneck throughput, additional processing or
throughput capacity can be achieved by speeding up the bottleneck
operation, reducing downtimes and setup times at the bottleneck
operation, adding more resources to the bottleneck operation, or off-
loading work from the bottleneck operation.
• Inventory or queue levels—the number of items or customers in storage
or waiting areas. It is desirable to keep queue levels to a minimum while
still achieving target throughput and response time requirements. Where
queue levels fluctuate, it is sometimes desirable to control the minimum
or maximum queue level. Queuing occurs when resources are unavailable
when needed. Inventory or queue levels can be controlled either by
balancing flow or by restricting production at nonbottleneck operations.
JIT ( just-in-time) production is one way to control inventory levels.
• Yield—from a production standpoint, the percentage of products
completed that conform to product specifications as a percentage of the
total number of products that entered the system as raw materials. If 95
out of 100 items are nondefective, the yield is 95 percent. Yield can also
be measured by its complement—reject or scrap rate.
• Customer responsiveness—the ability of the system to deliver products in
a timely fashion to minimize customer waiting time. It might be measured
as fill rate, which is the number of customer orders that can be filled
immediately from inventory. In minimizing job lateness, it may be
desirable to minimize the overall late time, minimize the number or
percentage of jobs that are late, or minimize the maximum tardiness of
jobs. In make-to-stock operations, customer responsiveness can be
assured by maintaining adequate inventory levels. In make-to-order,
customer responsiveness is improved by lowering inventory levels so that
cycle times can be reduced.
 Chapter 2 System Dynamics 33

• Variance—the degree of fluctuation that can and often does occur in any
of the preceding metrics. Variance introduces uncertainty, and therefore
risk, in achieving desired performance goals. Manufacturers and service
providers are often interested in reducing variance in delivery and service
times. For example, cycle times and throughput rates are going to have
some variance associated with them. Variance is reduced by controlling
activity times, improving resource reliability, and adhering to schedules.
These metrics can be given for the entire system, or they can be broken down by
individual resource, entity type, or some other characteristic. By relating these
metrics to other factors, additional meaningful metrics can be derived that are
useful for benchmarking or other comparative analysis. Typical relational
metrics include minimum theoretical flow time divided by actual flow time
(flow time efficiency), cost per unit produced (unit cost), annual inventory sold
divided by average inventory (inventory turns or turnover ratio), or units
produced per cost or labor input (productivity).

2.6 System Variables

Designing a new system or improving an existing system requires more than
sim- ply identifying the elements and performance goals of the system. It
requires an understanding of how system elements affect each other and overall
performance objectives. To comprehend these relationships, you must
understand three types of system variables:
1. Decision variables
2. Response variables
3. State variables

2.6.1 Decision Variables

Decision variables (also called input factors in SimRunner) are sometimes re-
ferred to as the independent variables in an experiment. Changing the values of
a system’s independent variables affects the behavior of the system.
Independent variables may be either controllable or uncontrollable depending
on whether the experimenter is able to manipulate them. An example of a
controllable variable is the number of operators to assign to a production line or
whether to work one or two shifts. Controllable variables are called decision
variables because the deci- sion maker (experimenter) controls the values of the
variables. An uncontrollable variable might be the time to service a customer or
the reject rate of an operation. When defining the system, controllable variables
are the information about the system that is more prescriptive than descriptive
(see section 2.9.3).
Obviously, all independent variables in an experiment are ultimately
controllable—but at a cost. The important point here is that some variables are
easier to change than others. When conducting experiments, the final solution is
34 Part I Study Chapters

often based on whether the cost to implement a change produces a higher return
in performance.

2.6.2 Response Variables

Response variables (sometimes called performance or output variables) measure
the performance of the system in response to particular decision variable
settings. A response variable might be the number of entities processed for a
given period, the average utilization of a resource, or any of the other system
performance met- rics described in section 2.5.
In an experiment, the response variable is the dependent variable, which de-
pends on the particular value settings of the independent variables. The experi-
menter doesn’t manipulate dependent variables, only independent or decision
variables. Obviously, the goal in systems planning is to find the right values or
set- tings of the decision variables that give the desired response values.

2.6.3 State Variables

State variables indicate the status of the system at any specific point in time. Ex-
amples of state variables are the current number of entities waiting to be
processed or the current status (busy, idle, down) of a particular resource. Re-
sponse variables are often summaries of state variable changes over time. For
ex- ample, the individual times that a machine is in a busy state can be summed
over a particular period and divided by the total available time to report the
machine utilization for that period.
State variables are dependent variables like response variables in that they
depend on the setting of the independent variables. State variables are often ig-
nored in experiments since they are not directly controlled like decision
variables and are not of as much interest as the summary behavior reported by
response variables.
Sometimes reference is made to the state of a system as though a system it-
self can be in a particular state such as busy or idle. The state of a system
actually consists of “that collection of variables necessary to describe a system
at a partic- ular time, relative to the objectives of the study” (Law and Kelton
2000). If we study the flow of customers in a bank, for example, the state of
the bank for a given point in time would include the current number of
customers in the bank, the current status of each teller (busy, idle, or whatever),
and perhaps the time that each customer has been in the system thus far.

2.7 System Optimization

Finding the right setting for decision variables that best meets performance
objectives is called optimization. Specifically, optimization seeks the best com-
bination of decision variable values that either minimizes or maximizes some
objective function such as costs or profits. An objective function is simply a
 Chapter 2 System Dynamics 35

response variable of the system. A typical objective in an optimization problem

for a manufacturing or service system might be minimizing costs or maximizing
flow rate. For example, we might be interested in finding the optimum number
of per- sonnel for staffing a customer support activity that minimizes costs yet
handles the call volume. In a manufacturing concern, we might be interested in
maximizing the throughput that can be achieved for a given system
configuration. Optimization problems often include constraints, limits to the
values that the decision variables can take on. For example, in finding the
optimum speed of a conveyor such that production cost is minimized, there
would undoubtedly be physical limits to how slow or fast the conveyor can
operate. Constraints can also apply to response vari- ables. An example of this
might be an objective to maximize throughput but sub- ject to the constraint that
average waiting time cannot exceed 15 minutes.
In some instances, we may find ourselves trying to achieve conflicting
objectives. For example, minimizing production or service costs often conflicts
with minimizing waiting costs. In system optimization, one must be careful to
weigh priorities and make sure the right objective function is driving the deci-
sions. If, for example, the goal is to minimize production or service costs, the
obvious solution is to maintain only a sufficient workforce to meet processing
requirements. Unfortunately, in manufacturing systems this builds up work-in-
process and results in high inventory carrying costs. In service systems,
long queues result in long waiting times, hence dissatisfied customers. At the
other extreme, one might feel that reducing inventory or waiting costs should
be the overriding goal and, therefore, decide to employ more than an adequate
number of resources so that work-in-process or customer waiting time is
virtually elimi- nated. It should be obvious that there is a point at which the cost
of adding another resource can no longer be justified by the diminishing
incremental savings in waiting costs that are realized. For this reason, it is
generally conceded that a better strategy is to find the right trade-off or
balance between the number of resources and waiting times so that the total
cost is minimized (see Figure 2.3).

FIGURE 2.3
Cost curves showing
optimum number of
resources to minimize
total cost.

Optimum
Total cost
Resource costs
Cost

Waiting costs

Number of resources
36 Part I Study Chapters

As shown in Figure 2.3, the number of resources at which the sum of the
resource costs and waiting costs is at a minimum is the optimum number of
resources to have. It also becomes the optimum acceptable waiting time.
In systems design, arriving at an optimum system design is not always
realistic, given the almost endless configurations that are sometimes possible and
limited time that is available. From a practical standpoint, the best that can be
expected is a near optimum solution that gets us close enough to our objective,
given the time constraints for making the decision.

2.8 The Systems Approach

Due to departmentalization and specialization, decisions in the real world are
often made without regard to overall system performance. With everyone busy
minding his or her own area of responsibility, often no one is paying attention
to the big picture. One manager in a large manufacturing corporation noted that
as many as 99 percent of the system improvement recommendations made in
his company failed to look at the system holistically. He further estimated that
nearly 80 per- cent of the suggested changes resulted in no improvement at all,
and many of the suggestions actually hurt overall performance. When
attempting to make system improvements, it is often discovered that localized
changes fail to produce the overall improvement that is desired. Put in technical
language: Achieving a local optimum often results in a global suboptimum. In
simpler terms: It’s okay to act locally as long as one is thinking globally. The
elimination of a problem in one area may only uncover, and sometimes even
exacerbate, problems in other areas.
Approaching system design with overall objectives in mind and considering
how each element relates to each other and to the whole is called a systems
or holistic approach to systems design. Because systems are composed of
interde- pendent elements, it is not possible to accurately predict how a
system will perform simply by examining each system element in isolation
from the whole. To presume otherwise is to take a reductionist approach to
systems design, which focuses on the parts rather than the whole. While
structurally a system may be di- visible, functionally it is indivisible and
therefore requires a holistic approach to systems thinking. Kofman and Senge
(1995) observe
The defining characteristic of a system is that it cannot be understood as a function
of its isolated components. First, the behavior of the system doesn’t depend on
what each part is doing but on how each part is interacting with the rest. . . . Second,
to un- derstand a system we need to understand how it fits into the larger system of
which it is a part. . . . Third, and most important, what we call the parts need not be
taken as primary. In fact, how we define the parts is fundamentally a matter of
perspective and purpose, not intrinsic in the nature of the “real thing” we are
looking at.
Whether designing a new system or improving an existing system, it is
impor- tant to follow sound design principles that take into account all relevant
variables. The activity of systems design and process improvement, also
called systems
 Chapter 2 System Dynamics 37

FIGURE 2.4
Four-step iterative
approach to Identify problems
systems and
improvement. opportunities.

Select and
implement
the best
solution. Develop
alternative
solutions.

Evaluate
the
solutions.

engineering, has been defined as

The effective application of scientific and engineering efforts to transform an opera-
tional need into a defined system configuration through the top-down iterative
process of requirements definition, functional analysis, synthesis, optimization,
design, test and evaluation (Blanchard 1991).

To state it simply, systems engineering is the process of identifying problems or

other opportunities for improvement, developing alternative solutions,
evaluating the solutions, and selecting and implementing the best solutions (see
Figure 2.4). All of this should be done from a systems point of view.

2.8.1 Identifying Problems and Opportunities

The importance of identifying the most significant problem areas and
recognizing opportunities for improvement cannot be overstated. Performance
standards should be set high in order to look for the greatest improvement
opportunities. Companies making the greatest strides are setting goals of 100
to 500 percent improvement in many areas such as inventory reduction or
customer lead time re- duction. Setting high standards pushes people to think
creatively and often results in breakthrough improvements that would otherwise
never be considered. Con- trast this way of thinking with one hospital whose
standard for whether a patient had a quality experience was whether the patient
left alive! Such lack of vision will never inspire the level of improvement
needed to meet ever-increasing customer expectations.

2.8.2 Developing Alternative Solutions

We usually begin developing a solution to a problem by understanding the prob-
lem, identifying key variables, and describing important relationships. This
helps
38 Part I Study Chapters

identify possible areas of focus and leverage points for applying a solution.
Techniques such as cause-and-effect analysis and pareto analysis are useful here.
Once a problem or opportunity has been identified and key decision variables
isolated, alternative solutions can be explored. This is where most of the design
and engineering expertise comes into play. Knowledge of best practices for com-
mon types of processes can also be helpful. The designer should be open to all
possible alternative feasible solutions so that the best possible solutions don’t get
overlooked.
Generating alternative solutions requires creativity as well as organizational
and engineering skills. Brainstorming sessions, in which designers exhaust every
conceivably possible solution idea, are particularly useful. Designers should use
every stretch of the imagination and not be stifled by conventional solutions
alone. The best ideas come when system planners begin to think innovatively
and break from traditional ways of doing things. Simulation is particularly
helpful in this process in that it encourages thinking in radical new ways.

2.8.3 Evaluating the Solutions

Alternative solutions should be evaluated based on their ability to meet the
criteria established for the evaluation. These criteria often include
performance goals, cost of implementation, impact on the sociotechnical
infrastructure, and consis- tency with organizational strategies. Many of these
criteria are difficult to measure in absolute terms, although most design options
can be easily assessed in terms of relative merit.
After narrowing the list to two or three of the most promising solutions
using common sense and rough-cut analysis, more precise evaluation
techniques may need to be used. This is where simulation and other formal
analysis tools come into play.

2.8.4 Selecting and Implementing the Best Solution

Often the final selection of what solution to implement is not left to the analyst,
but rather is a management decision. The analyst’s role is to present his or her
evalua- tion in the clearest way possible so that an informed decision can be
made.
Even after a solution is selected, additional modeling and analysis are often
needed for fine-tuning the solution. Implementers should then be careful to make
sure that the system is implemented as designed, documenting reasons for any
modifications.

2.9 Systems Analysis Techniques

While simulation is perhaps the most versatile and powerful systems analysis
tool, other available techniques also can be useful in systems planning. These al-
ternative techniques are usually computational methods that work well for
simple systems with little interdependency and variability. For more complex
systems,
 Chapter 2 System Dynamics 39

these techniques still can provide rough estimates but fall short in producing the
insights and accurate answers that simulation provides. Systems implemented
using these techniques usually require some adjustments after implementation to
compensate for inaccurate calculations. For example, if after implementing a
sys- tem it is discovered that the number of resources initially calculated is
insufficient to meet processing requirements, additional resources are added.
This adjustment can create extensive delays and costly modifications if special
personnel training or custom equipment is involved. As a precautionary
measure, a safety factor is sometimes added to resource and space calculations
to ensure they are adequate. Overdesigning a system, however, also can be
costly and wasteful.
As system interdependency and variability increase, not only does system
performance decrease, but the ability to accurately predict system performance
decreases as well (Lloyd and Melton 1997). Simulation enables a planner to
ac- curately predict the expected performance of a system design and ultimately
make better design decisions.
Systems analysis tools, in addition to simulation, include simple
calculations, spreadsheets, operations research techniques (such as linear
programming and queuing theory), and special computerized tools for
scheduling, layout, and so forth. While these tools can provide quick and
approximate solutions, they tend to make oversimplifying assumptions, perform
only static calculations, and are lim- ited to narrow classes of problems.
Additionally, they fail to fully account for interdependencies and variability of
complex systems and therefore are not as ac- curate as simulation in predicting
complex system performance (see Figure 2.5). They all lack the power,
versatility, and visual appeal of simulation. They do pro- vide quick solutions,
however, and for certain situations produce adequate results. They are
important to cover here, not only because they sometimes provide a good
alternative to simulation, but also because they can complement simulation by
providing initial design estimates for input to the simulation model. They also

FIGURE 2.5
System predictability

100%
Simulation
improves With
simulation
performance
predictability.

50%
Without
simulation

Call centers Banks Airports

Doctor's Emergency Hospital
offices rooms Production s
Machining lines Factorie
cells s
0% Medium
Low High
System
complexity
40 Part I Study Chapters

can be useful to help validate the results of a simulation by comparing them with
results obtained using an analytic model.

2.9.1 Hand Calculations

Quick-and-dirty, pencil-and-paper sketches and calculations can be remark-
ably helpful in understanding basic requirements for a system. Many important
decisions have been made as the result of sketches drawn and calculations per-
formed on a napkin or the back of an envelope. Some decisions may be so basic
that a quick mental calculation yields the needed results. Most of these calcula-
tions involve simple algebra, such as finding the number of resource units (such
as machines or service agents) to process a particular workload knowing the
capacity per resource unit. For example, if a requirement exists to process 200
items per hour and the processing capacity of a single resource unit is 75
work items per hour, three units of the resource, most likely, are going to be
needed.
The obvious drawback to hand calculations is the inability to manually per-
form complex calculations or to take into account tens or potentially even hun-
dreds of complex relationships simultaneously.

2.9.2 Spreadsheets
Spreadsheet software comes in handy when calculations, sometimes involving
hundreds of values, need to be made. Manipulating rows and columns of
numbers on a computer is much easier than doing it on paper, even with a
calculator handy. Spreadsheets can be used to perform rough-cut analysis
such as calculating average throughput or estimating machine requirements.
The drawback to spread- sheet software is the inability (or, at least, limited
ability) to include variability in activity times, arrival rates, and so on, and to
account for the effects of inter- dependencies.
What-if experiments can be run on spreadsheets based on expected
values (average customer arrivals, average activity times, mean time between
equipment failures) and simple interactions (activity A must be performed
before activity B). This type of spreadsheet simulation can be very useful for
getting rough perfor- mance estimates. For some applications with little
variability and component in- teraction, a spreadsheet simulation may be
adequate. However, calculations based on only average values and
oversimplified interdependencies potentially can be misleading and result in
poor decisions. As one ProModel user reported, “We just completed our final
presentation of a simulation project and successfully saved approximately
$600,000. Our management was prepared to purchase an addi- tional
overhead crane based on spreadsheet analysis. We subsequently built a
ProModel simulation that demonstrated an additional crane will not be
necessary. The simulation also illustrated some potential problems that were not
readily ap- parent with spreadsheet analysis.”
Another weakness of spreadsheet modeling is the fact that all behavior is
assumed to be period-driven rather than event-driven. Perhaps you have tried to
 Chapter 2 System Dynamics 41

figure out how your bank account balance fluctuated during a particular period
when all you had to go on was your monthly statements. Using ending balances
does not reflect changes as they occurred during the period. You can know the
cur- rent state of the system at any point in time only by updating the state
variables of the system each time an event or transaction occurs. When it comes
to dynamic models, spreadsheet simulation suffers from the “curse of
dimensionality” be- cause the size of the model becomes unmanageable.

2.9.3 Operations Research Techniques

Traditional operations research (OR) techniques utilize mathematical models to
solve problems involving simple to moderately complex relationships. These
mathematical models include both deterministic models such as mathematical
programming, routing, or network flows and probabilistic models such as
queuing and decision trees. These OR techniques provide quick, quantitative
answers without going through the guesswork process of trial and error. OR
techniques can be divided into two general classes: prescriptive and descriptive.

Prescriptive Techniques
Prescriptive OR techniques provide an optimum solution to a problem, such as
the optimum amount of resource capacity to minimize costs, or the optimum
product mix that will maximize profits. Examples of prescriptive OR optimiza-
tion techniques include linear programming and dynamic programming. These
techniques are generally applicable when only a single goal is desired for mini-
mizing or maximizing some objective function—such as maximizing profits or
minimizing costs.
Because optimization techniques are generally limited to optimizing for a
single goal, secondary goals get sacrificed that may also be important. Addition-
ally, these techniques do not allow random variables to be defined as input data,
thereby forcing the analyst to use average process times and arrival rates that
can produce misleading results. They also usually assume that conditions are
constant over the period of study. In contrast, simulation is capable of
analyzing much more complex relationships and time-varying circumstances.
With optimization capabilities now provided in simulation, simulation software
has even taken on a prescriptive roll.

Descriptive Techniques
Descriptive techniques such as queuing theory are static analysis techniques that
provide good estimates for basic problems such as determining the expected
average number of entities in a queue or the average waiting times for entities in
a queuing system. Queuing theory is of particular interest from a simulation
perspective because it looks at many of the same system characteristics and
issues that are addressed in simulation.
Queuing theory is essentially the science of waiting lines (in the United
Kingdom, people wait in queues rather than lines). A queuing system consists
of
42 Part I Study Chapters

FIGURE 2.6 Arriving entities Queue Server Departing entities

Queuing
system
configuration.

one or more queues and one or more servers (see Figure 2.6). Entities, referred
to in queuing theory as the calling population, enter the queuing system and
either are immediately served if a server is available or wait in a queue until a
server be- comes available. Entities may be serviced using one of several
queuing disci- plines: first-in, first-out (FIFO); last-in, first-out (LIFO); priority;
and others. The system capacity, or number of entities allowed in the system at
any one time, may be either finite or, as is often the case, infinite. Several
different entity queuing be- haviors can be analyzed such as balking (rejecting
entry), reneging (abandoning the queue), or jockeying (switching queues).
Different interarrival time distribu- tions (such as constant or exponential) may
also be analyzed, coming from either a finite or infinite population. Service
times may also follow one of several distri- butions such as exponential or
constant.
Kendall (1953) devised a simple system for classifying queuing systems in
the form A/B/s, where A is the type of interarrival distribution, B is the type of
service time distribution, and s is the number of servers. Typical distribution
types for A and B are
M for Markovian or exponential distribution
G for a general distribution
D for a deterministic or constant value
An M/D/1 queuing system, for example, is a system in which interarrival times
are exponentially distributed, service times are constant, and there is a single
server.
The arrival rate in a queuing system is usually represented by the Greek
letter lambda (λ) and the service rate by the Greek letter mu (µ). The mean
interarrival time then becomes 1/λ and the mean service time is 1/µ. A traffic
intensity factor λ/µ is a parameter used in many of the queuing equations and
is represented by the Greek letter rho (ρ).
Common performance measures of interest in a queuing system are based
on steady-state or long-term expected values and include
L = expected number of entities in the system (number in the queue and in
service)
Lq = expected number of entities in the queue (queue length)
Chapter 2 System Dynamics 43

W = expected time in the system (flow time)

Wq = expected time in the queue (waiting time)
Pn = probability of exactly n customers in the system (n = 0, 1, . . .)
The M/M/1 system with infinite capacity and a FIFO queue discipline is perhaps
the most basic queuing problem and sufficiently conveys the procedure for -
analyzing queuing systems and understanding how the analysis is performed. The
equations for calculating the common performance measures in an M/M/1 are

L= ρ λ
(1 =
− ρ) (µ − λ)
ρ2
L q = L − ρ = — ρ)

(1
1
W=
µ −λ
λ
Wq =
µ(µ − λ)
Pn = (1 − ρ)ρ n n = 0, 1, . . .
If either the expected number of entities in the system or the expected waiting
time is known, the other can be calculated easily using Little’s law (1961):
L = λW
Little’s law also can be applied to the queue length and waiting time:
L q = λWq
Example: Suppose customers arrive to use an automatic teller machine (ATM) at
an interarrival time of 3 minutes exponentially distributed and spend an average
of
2.4 minutes exponentially distributed at the machine. What is the expected number
of customers the system and in the queue? What is the expected waiting time for
cus- tomers in the system and in the queue?
λ = 20 per hour
µ = 25 per hour
λ
ρ= = .8
µ
Solving for L:
λ
L=
(µ − λ)
20
=
(25 − 20)
20
= =4
5
44 Part I Study Chapters

Solving for Lq:

Lq = ρ2
(1 — ρ)

.82
=
(1 − .8)

= .64
.2
= 3.2
Solving for W using Little’s formula:
L
W=
λ
4
=
20
= .20 hrs
= 12 minutes
Solving for Wq using Little’s formula:

Wq = L q
λ

= 3.2
20
= .16 hrs
= 9.6 minutes
Descriptive OR techniques such as queuing theory are useful for the most
basic problems, but as systems become even moderately complex, the problems
get very complicated and quickly become mathematically intractable. In
contrast, simulation provides close estimates for even the most complex
systems (assum- ing the model is valid). In addition, the statistical output of
simulation is not limited to only one or two metrics but instead provides
information on all per- formance measures. Furthermore, while OR techniques
give only average per- formance measures, simulation can generate detailed
time-series data and histograms providing a complete picture of performance
over time.

2.9.4 Special Computerized Tools

Many special computerized tools have been developed for forecasting, schedul-
ing, layout, staffing, and so on. These tools are designed to be used for narrowly
focused problems and are extremely effective for the kinds of problems they are
intended to solve. They are usually based on constant input values and are com-
puted using static calculations. The main benefit of special-purpose decision
tools is that they are usually easy to use because they are designed to solve a
specific type of problem.
 Chapter 2 System Dynamics 45

2.10 Summary
An understanding of system dynamics is essential to using any tool for planning
system operations. Manufacturing and service systems consist of interrelated
elements (personnel, equipment, and so forth) that interactively function to pro-
duce a specified outcome (an end product, a satisfied customer, and so on).
Systems are made up of entities (the objects being processed), resources (the
per- sonnel, equipment, and facilities used to process the entities), activities
(the process steps), and controls (the rules specifying the who, what, where,
when, and how of entity processing).
The two characteristics of systems that make them so difficult to analyze are
interdependencies and variability. Interdependencies cause the behavior of one
element to affect other elements in the system either directly or indirectly. Vari-
ability compounds the effect of interdependencies in the system, making system
behavior nearly impossible to predict without the use of simulation.
The variables of interest in systems analysis are decision, response, and
state variables. Decision variables define how a system works; response
variables indicate how a system performs; and state variables indicate system
conditions at specific points in time. System performance metrics or response
variables are gen- erally time, utilization, inventory, quality, or cost related.
Improving system per- formance requires the correct manipulation of decision
variables. System opti- mization seeks to find the best overall setting of
decision variable values that maximizes or minimizes a particular response
variable value.
Given the complex nature of system elements and the requirement to make
good design decisions in the shortest time possible, it is evident that simulation
can play a vital role in systems planning. Traditional systems analysis techniques
are effective in providing quick but often rough solutions to dynamic systems
problems. They generally fall short in their ability to deal with the complexity
and dynamically changing conditions in manufacturing and service systems.
Simula- tion is capable of imitating complex systems of nearly any size and to
nearly any level of detail. It gives accurate estimates of multiple performance
metrics and leads designers toward good design decisions.

2.11 Review Questions

1. Why is an understanding of system dynamics important to the use of
simulation?
2. What is a system?
3. What are the elements of a system from a simulation perspective? Give
an example of each.
4. What are two characteristics of systems that make them so complex?
5. What is the difference between a decision variable and a response variable?
6. Identify five decision variables of a manufacturing or service system
that tend to be random.
46 Part I Study Chapters

7. Give two examples of state variables.

8. List three performance metrics that you feel would be important
for a computer assembly line.
9. List three performance metrics you feel would be useful for a
hospital emergency room.
10. Define optimization in terms of decision variables and response
variables.
11. Is maximizing resource utilization a good overriding
performance objective for a manufacturing system? Explain.
12. What is a systems approach to problem solving?
13. How does simulation fit into the overall approach of systems
engineering?
14. In what situations would you use analytical techniques
(like hand calculations or spreadsheet modeling) over
simulation?
15. Assuming you decided to use simulation to determine how
many lift trucks were needed in a distribution center, how might
analytical models be used to complement the simulation study
both before and after?
16. What advantages does simulation have over traditional OR
techniques used in systems analysis?
17. Students come to a professor’s office to receive help on a
homework assignment every 10 minutes exponentially distributed.
The time to help a student is exponentially distributed with a mean
of 7 minutes. What are the expected number of students waiting to
be helped and the average time waiting before being helped? For
what percentage of time is it expected there will be more than two
students waiting to be helped?

References
Blanchard, Benjamin S. System Engineering Management. New York: John Wiley &
Sons, 1991.
Hopp, Wallace J., and M. Spearman. Factory Physics. New York: Irwin/McGraw-Hill,
2000, p. 282.
Kendall, D. G. “Stochastic Processes Occurring in the Theory of Queues and Their
Analysis by the Method of Imbedded Markov Chains.” Annals of
Mathematical Statistics 24 (1953), pp. 338–54.
Kofman, Fred, and P. Senge. Communities of Commitment: The Heart of Learning
Organizations. Sarita Chawla and John Renesch, (eds.), Portland, OR. Productivity
Press, 1995.
Law, Averill M., and David W. Kelton. Simulation Modeling and Analysis. New York:
McGraw-Hill, 2000.
Little, J. D. C. “A Proof for the Queuing Formula: L = λW.” Operations Research 9, no.
3 (1961), pp. 383–87.
Lloyd, S., and K. Melton. “Using Statistical Process Control to Obtain More Precise
Distribution Fitting Using Distribution Fitting Software.” Simulators
International XIV 29, no. 3 (April 1997), pp. 193–98.
Senge, Peter. The Fifth Discipline. New York: Doubleday, 1990.
Simon, Herbert A. Models of Man. New York: John Wiley & Sons, 1957, p. 198.
Harrell−Ghosh−Bo I. Study 3. Simulation © The
wden: Simulation Chapters Basics McGraw−Hill
Using ProModel, Companies,
Second Edition

C H A P T E R

3 SIMULATION BASICS

“Zeal without knowledge is fire without light.”

—Dr. Thomas Fuller

3.1 Introduction
Simulation is much more meaningful when we understand what it is actually
doing. Understanding how simulation works helps us to know whether we are
applying it correctly and what the output results mean. Many books have been
written that give thorough and detailed discussions of the science of simulation
(see Banks et al. 2001; Hoover and Perry 1989; Law and Kelton 2000; Pooch
and Wall 1993; Ross 1990; Shannon 1975; Thesen and Travis 1992; and
Widman, Loparo, and Nielsen 1989). This chapter attempts to summarize the
basic technical issues related to simulation that are essential to understand in
order to get the greatest benefit from the tool. The chapter discusses the different
types of simulation and how random behavior is sim- ulated. A spreadsheet
simulation example is given in this chapter to illustrate how various techniques
are combined to simulate the behavior of a common system.

3.2 Types of Simulation

The way simulation works is based largely on the type of simulation used. There
are many ways to categorize simulation. Some of the most common include
• Static or dynamic.
• Stochastic or deterministic.
• Discrete event or continuous.
The type of simulation we focus on in this book can be classified as dynamic,
stochastic, discrete-event simulation. To better understand this classification, we

47
48 Part I Study Chapters

will look at what the first two characteristics mean in this chapter and focus on
what the third characteristic means in Chapter 4.

3.2.1 Static versus Dynamic Simulation

A static simulation is one that is not based on time. It often involves drawing
random samples to generate a statistical outcome, so it is sometimes called
Monte Carlo simulation. In finance, Monte Carlo simulation is used to select a
portfolio of stocks and bonds. Given a portfolio, with different probabilistic
payouts, it is possible to generate an expected yield. One material handling
system supplier developed a static simulation model to calculate the expected
time to travel from one rack location in a storage system to any other rack
location. A random sample of 100 from–to relationships were used to estimate
an average travel time. Had every from–to trip been calculated, a 1,000-
location rack would have involved 1,000! calculations.
Dynamic simulation includes the passage of time. It looks at state changes
as they occur over time. A clock mechanism moves forward in time and state
vari- ables are updated as time advances. Dynamic simulation is well suited for
analyzing manufacturing and service systems since they operate over time.

3.2.2 Stochastic versus Deterministic Simulation

Simulations in which one or more input variables are random are referred to as
stochastic or probabilistic simulations. A stochastic simulation produces output
that is itself random and therefore gives only one data point of how the system
might behave.
Simulations having no input components that are random are said to be
deterministic. Deterministic simulation models are built the same way as
stochas- tic models except that they contain no randomness. In a deterministic
simulation, all future states are determined once the input data and initial
state have been defined.
As shown in Figure 3.1, deterministic simulations have constant inputs and
produce constant outputs. Stochastic simulations have random inputs and
produce random outputs. Inputs might include activity times, arrival intervals,
and routing sequences. Outputs include metrics such as average flow time, flow
rate, and re- source utilization. Any output impacted by a random input
variable is going to also be a random variable. That is why the random inputs
and random outputs of Figure 3.1(b) are shown as statistical distributions.
A deterministic simulation will always produce the exact same outcome no
matter how many times it is run. In stochastic simulation, several randomized
runs or replications must be made to get an accurate performance estimate
because each run varies statistically. Performance estimates for stochastic
simulations are obtained by calculating the average value of the performance
metric across all of the replications. In contrast, deterministic simulations need
to be run only once to get precise results because the results are always the
same.
 Chapter 3 Simulation Basics 49

FIGURE 3.1
Examples of (a) a deterministic simulation and (b) a stochastic simulation.

Constant
inputs Constant Random Random
outputs inputs outputs

7 12.3
Simulatio Simulation
3.4 n 106

(a) (b)

3.3 Random Behavior

Stochastic systems frequently have time or quantity values that vary within a
given range and according to specified density, as defined by a probability distri-
bution. Probability distributions are useful for predicting the next time, distance,
quantity, and so forth when these values are random variables. For example, if an
operation time varies between 2.2 minutes and 4.5 minutes, it would be defined
in the model as a probability distribution. Probability distributions are defined
by specifying the type of distribution (normal, exponential, or another type) and
the parameters that describe the shape or density and range of the distribution.
For example, we might describe the time for a check-in operation to be
normally distributed with a mean of 5.2 minutes and a standard deviation of
0.4 minute. During the simulation, values are obtained from this distribution
for successive operation times. The shape and range of time values generated
for this activity will correspond to the parameters used to define the distribution.
When we gener- ate a value from a distribution, we call that value a random
variate.
Probability distributions from which we obtain random variates may be
either discrete (they describe the likelihood of specific values occurring) or
continuous (they describe the likelihood of a value being within a given range).
Figure 3.2 shows graphical examples of a discrete distribution and a continuous
distribution.
A discrete distribution represents a finite or countable number of possible
values. An example of a discrete distribution is the number of items in a lot or
individuals in a group of people. A continuous distribution represents a
continuum of values. An example of a continuous distribution is a machine with
a cycle time that is uniformly distributed between 1.2 minutes and 1.8
minutes. An infinite number of possible values exist within this range. Discrete
and continuous distributions are further defined in Chapter 6. Appendix A
describes many of the distributions used in simulation.
50 Part I Study Chapters

FIGURE 3.2 p(x) 1.0

Examples of (a) a
discrete probability
distribution and (b) a .8
continuous
probability (a )
.6
distribution.

.4

.2

0
0 1 2 3 4 5 6 7 x
Discrete Value

f (x) 1.0

.8

.6
(b )

.4

.2

0
0 1 2 3 4 5 6 7 x
Continuous Value

3.4 Simulating Random Behavior

One of the most powerful features of simulation is its ability to mimic random
behavior or variation that is characteristic of stochastic systems. Simulating
random behavior requires that a method be provided to generate random
numbers as well as routines for generating random variates based on a given
probability dis- tribution. Random numbers and random variates are defined in
the next sections along with the routines that are commonly used to generate
them.

3.4.1 Generating Random Numbers

Random behavior is imitated in simulation by using a random number
generator. The random number generator operates deep within the heart of a
simulation model, pumping out a stream of random numbers. It provides the
foundation for
 Chapter 3 Simulation Basics 51

FIGURE 3.3
f(x)
The
uniform(0,1)
distribution of a
random number f(x) ={ 1 for 0 < x <
1
generator. 0 elsewhere 1.
1 0
Mean = µ, =
2
1
Variance = u2 =
12 0 1.0 x

simulating “random” events occurring in the simulated system such as the

arrival time of cars to a restaurant’s drive-through window; the time it takes the
driver to place an order; the number of hamburgers, drinks, and fries ordered;
and the time it takes the restaurant to prepare the order. The input to the
procedures used to generate these types of events is a stream of numbers that
are uniformly distrib-
uted between zero and one (0 ≤ x ≤ 1). The random number generator is
respon- sible for producing this stream of independent and uniformly distributed
numbers
(Figure 3.3).
Before continuing, it should be pointed out that the numbers produced by a
random number generator are not “random” in the truest sense. For example, the
generator can reproduce the same sequence of numbers again and again, which
is not indicative of random behavior. Therefore, they are often referred to as
pseudo- random number generators (pseudo comes from Greek and means false
or fake). Practically speaking, however, “good” pseudo-random number
generators can pump out long sequences of numbers that pass statistical tests
for randomness (the numbers are independent and uniformly distributed). Thus
the numbers approxi- mate real-world randomness for purposes of simulation,
and the fact that they are reproducible helps us in two ways. It would be
difficult to debug a simulation program if we could not “regenerate” the same
sequence of random numbers to re- produce the conditions that exposed an error
in our program. We will also learn in Chapter 10 how reproducing the same
sequence of random numbers is useful when comparing different simulation
models. For brevity, we will drop the pseudo prefix as we discuss how to
design and keep our random number generator healthy.

Linear Congruential Generators

There are many types of established random number generators, and researchers
are actively pursuing the development of new ones (L’Ecuyer 1998). However,
most simulation software is based on linear congruential generators (LCG). The
LCG is efficient in that it quickly produces a sequence of random numbers with-
out requiring a great deal of computational resources. Using the LCG, a
sequence of integers Z1, Z2, Z3, . . . is defined by the recursive formula
Zi = (aZ i −1 + c) mod(m)
52 Part I Study Chapters

where the constant a is called the multiplier, the constant c the increment, and
the constant m the modulus (Law and Kelton 2000). The user must provide a
seed or starting value, denoted Z 0, to begin generating the sequence of integer
values. Z 0, a, c, and m are all nonnegative integers. The value of Zi is computed
by dividing
(aZ i−1 + c) by m and setting Z i equal to the remainder part of the division, which
is the result returned by the mod function. Therefore, the Zi values are bounded
by 0 ≤ Zi ≤ m − 1 and are uniformly distributed in the discrete case.
However, we desire the continuous version of the uniform distribution with
values ranging between a low of zero and a high of one, which we will denote
as Ui for i = 1, 2, 3, . . . . Accordingly, the value of Ui is computed by dividing
Zi by m.
In a moment, we will consider some requirements for selecting the values
for a, c, and m to ensure that the random number generator produces a long
sequence of numbers before it begins to repeat them. For now, however, let’s
assign the fol- lowing values a = 21, c = 3, and m = 16 and generate a few
pseudo-random numbers. Table 3.1 contains a sequence of 20 random numbers
generated from the recursive formula
Zi = (21Zi−1 + 3) mod(16)
An integer value of 13 was somewhat arbitrarily selected between 0 and
m − 1 = 16 − 1 = 15 as the seed (Z 0 = 13) to begin generating the sequence of

TABLE 3.1 Example LCG Zi = (21Zi−1 + 3) mod(16),

with Z0 = 13

i 21Zi−1 + 3 Zi Ui = Zi/16
0 13
1 276 4 0.2500
2 87 7 0.4375
3 150 6 0.3750
4 129 1 0.0625
5 24 8 0.5000
6 171 11 0.6875
7 234 10 0.6250
8 213 5 0.3125
9 108 12 0.7500
10 255 15 0.9375
11 318 14 0.8750
12 297 9 0.5625
13 192 0 0.0000
14 3 3 0.1875
15 66 2 0.1250
16 45 13 0.8125
17 276 4 0.2500
18 87 7 0.4375
19 150 6 0.3750
20 129 1 0.0625
Chapter 3 Simulation Basics 53

numbers in Table 3.1. The value of Z1 is obtained as

Z1 = (aZ 0 + c) mod(m) = (21(13) + 3) mod(16) = (276) mod(16) = 4
Note that 4 is the remainder term from dividing 16 into 276. The value of U1 is
computed as
U1 = Z1/16 = 4/16 = 0.2500
The process continues using the value of Z1 to compute Z 2 and then U2.
Changing the value of Z 0 produces a different sequence of uniform(0,1)
numbers. However, the original sequence can always be reproduced by setting
the seed value back to 13 (Z0 = 13). The ability to repeat the simulation
experiment under the exact same “random” conditions is very useful, as will be
demonstrated in Chapter 10 with a technique called common random numbers.
Note that in ProModel the sequence of random numbers is not generated in
advance and then read from a table as we have done. Instead, the only value
saved is the last Zi value that was generated. When the next random number in
the se- quence is needed, the saved value is fed back to the generator to produce
the next random number in the sequence. In this way, the random number
generator is called each time a new random event is scheduled for the
simulation.
Due to computational constraints, the random number generator cannot go
on indefinitely before it begins to repeat the same sequence of numbers. The
LCG in Table 3.1 will generate a sequence of 16 numbers before it begins to
repeat itself. You can see that it began repeating itself starting in the 17th
position. The value of 16 is referred to as the cycle length of the random number
generator, which is dis- turbingly short in this case. A long cycle length is
desirable so that each replication of a simulation is based on a different segment
of random numbers. This is how we collect independent observations of the
model’s output.
Let’s say, for example, that to run a certain simulation model for one
replica- tion requires that the random number generator be called 1,000 times
during the simulation and we wish to execute five replications of the
simulation. The first replication would use the first 1,000 random numbers in the
sequence, the second replication would use the next 1,000 numbers in the
sequence (the number that would appear in positions 1,001 to 2,000 if a table
were generated in advance), and so on. In all, the random number generator
would be called 5,000 times. Thus we would need a random number generator
with a cycle length of at least 5,000.
The maximum cycle length that an LCG can achieve is m. To realize the
maximum cycle length, the values of a, c, and m have to be carefully selected.
A guideline for the selection is to assign (Pritsker 1995)
1. m = 2b, where b is determined based on the number of bits per word on
the computer being used. Many computers use 32 bits per word, making
31 a good choice for b.
2. c and m such that their greatest common factor is 1 (the only
positive integer that exactly divides both m and c is 1).
3. a = 1 + 4k, where k is an integer.
54 Part I Study Chapters

Following this guideline, the LCG can achieve a full cycle length of over 2.1
billion (231 to be exact) random numbers.
Frequently, the long sequence of random numbers is subdivided into smaller
segments. These subsegments are referred to as streams. For example, Stream 1
could begin with the random number in the first position of the sequence and
continue down to the random number in the 200,000th position of the sequence.
Stream 2, then, would start with the random number in the 200,001st position of
the sequence and end at the 400,000th position, and so on. Using this approach,
each type of random event in the simulation model can be controlled by a unique
stream of random numbers. For example, Stream 1 could be used to generate the
arrival pattern of cars to a restaurant’s drive-through window and Stream 2 could
be used to generate the time required for the driver of the car to place an order.
This assumes that no more than 200,000 random numbers are needed to simulate
each type of event. The practical and statistical advantages of assigning unique
streams to each type of event in the model are described in Chapter 10.
To subdivide the generator’s sequence of random numbers into streams, you
first need to decide how many random numbers to place in each stream. Next,
you begin generating the entire sequence of random numbers (cycle length)
produced by the generator and recording the Zi values that mark the beginning of
each stream. Therefore, each stream has its own starting or seed value. When
using the random number generator to drive different events in a simulation
model, the previously generated random number from a particular stream is
used as input to the generator to generate the next random number from that
stream. For convenience, you may want to think of each stream as a separate
random number generator to be used in different places in the model. For
example, see Figure 10.5 in Chapter 10.
There are two types of linear congruential generators: the mixed
congruential generator and the multiplicative congruential generator. Mixed
congruential gener- ators are designed by assigning c > 0. Multiplicative
congruential generators are designed by assigning c = 0. The multiplicative
generator is more efficient than the mixed generator because it does not require
the addition of c. The maximum cycle length for a multiplicative generator can
be set within one unit of the maximum
cycle length of the mixed generator by carefully selecting values for a and m.
From a practical standpoint, the difference in cycle length is insignificant
considering that both types of generators can boast cycle lengths of more than
2.1 billion.
ProModel uses the following multiplicative generator:
31
Zi = (630,360,016Zi−1) − 1)
mod(2
Specifically, it is a prime modulus multiplicative linear congruential generator
(PMMLCG) with a = 630,360,016, c = 0, and m = 231 − 1. It has been
exten- sively tested and is known to be a reliable random number generator for
simula- tion (Law and Kelton 2000). The ProModel implementation of this
generator
divides the cycle length of 231 − 1 = 2,147,483,647 into 100 unique streams.

Testing Random Number Generators

When faced with using a random number generator about which you know very
little, it is wise to verify that the numbers emanating from it satisfy the two
 Chapter 3 Simulation Basics 55

important properties defined at the beginning of this section. The numbers pro-
duced by the random number generator must be (1) independent and (2)
uniformly distributed between zero and one (uniform(0,1)). To verify that the
generator satisfies these properties, you first generate a sequence of random
numbers U1, U2, U3, . . . and then subject them to an appropriate test of
hypothesis.
The hypotheses for testing the independence property are
H 0: Ui values from the generator are independent
H1: Ui values from the generator are not independent
Several statistical methods have been developed for testing these hypotheses at
a specified significance level α. One of the most commonly used methods is
the runs test. Banks et al. (2001) review three different versions of the runs test
for conducting this independence test. Additionally, two runs tests are imple-
mented in Stat::Fit—the Runs Above and Below the Median Test and the Runs
Up and Runs Down Test. Chapter 6 contains additional material on tests for
independence.
The hypotheses for testing the uniformity property are
H 0: Ui values are uniform(0,1)
H1: Ui values are not uniform(0,1)
Several statistical methods have also been developed for testing these
hypotheses at a specified significance level α. The Kolmogorov-Smirnov test
and the chi- square test are perhaps the most frequently used tests. (See
Chapter 6 for a de- scription of the chi-square test.) The objective is to
determine if the uniform(0,1) distribution fits or describes the sequence of
random numbers produced by the random number generator. These tests are
included in the Stat::Fit software and are further described in many
introductory textbooks on probability and statistics (see, for example, Johnson
1994).

3.4.2 Generating Random Variates

This section introduces common methods for generating observations (random
variates) from probability distributions other than the uniform(0,1) distribution.
For example, the time between arrivals of cars to a restaurant’s drive-through
window may be exponentially distributed, and the time required for drivers to
place orders at the window might follow the lognormal distribution.
Observations from these and other commonly used distributions are obtained
by transforming the observations generated by the random number generator to
the desired distri- bution. The transformed values are referred to as variates
from the specified distribution.
There are several methods for generating random variates from a desired
dis- tribution, and the selection of a particular method is somewhat dependent
on the characteristics of the desired distribution. Methods include the inverse
transfor- mation method, the acceptance/rejection method, the composition
method, the convolution method, and the methods employing special
properties. The inverse transformation method, which is commonly used to
generate variates from both
56 Part I Study Chapters

discrete and continuous distributions, is described starting first with the continu-
ous case. For a review of the other methods, see Law and Kelton (2000).

Continuous Distributions
The application of the inverse transformation method to generate random
variates from continuous distributions is straightforward and efficient for many
continu- ous distributions. For a given probability density function f (x), find
the cumula- tive distribution function of X. That is, F(x) = P(X ≤ x). Next,
set U = F(x),
where U is uniform(0,1), and solve for x. Solving for x yields x = F−1(U ). The
equation x = F−1(U ) transforms U into a value for x that conforms to the
given distribution f (x).
As an example, suppose that we need to generate variates from the
exponential distribution with mean β. The probability density function f (x) and
corresponding cumulative distribution function F(x) are
 −x/β
e for x > 0
f (x) = 1 β

0 elsewhere
r
1 − e−x/β for x > 0
F(x) =
0 elsewhere
Setting U = F(x) and solving for x yields
U = 1 − e−x/β
−x/β
e =1−U
ln (e−x/β) = ln (1 − U) where ln is the natural logarithm
−x/β = ln (1 − U)
x = −β ln (1 − U)
The random variate x in the above equation is exponentially distributed with mean
β provided U is uniform(0,1).
Suppose three observations of an exponentially distributed random variable
with mean β = 2 are desired. The next three numbers generated by the
random number generator are U1 = 0.27, U2 = 0.89, and U3 = 0.13. The three
numbers are transformed into variates x1, x2, and x3 from the exponential
distribution with mean β = 2 as follows:
x1 = −2 ln (1 − U1) = −2 ln (1 − 0.27) = 0.63
x2 = −2 ln (1 − U2) = −2 ln (1 − 0.89) = 4.41
x3 = −2 ln (1 − U3) = −2 ln (1 − 0.13) = 0.28
Figure 3.4 provides a graphical representation of the inverse transformation
method in the context of this example. The first step is to generate U, where U is
uniform(0,1). Next, locate U on the y axis and draw a horizontal line from that
point to the cumulative distribution function [F(x) = 1 − e−x/2]. From this point
 Chapter 3 Simulation Basics 57

FIGURE 3.4
Graphical explanation F(x)
of inverse
transformation 1.00
method for continuous U2 = 1 – e–x2/ 2 = 0.89
variates.

0.50

U1 = 1 – e–x1/ 2 = 0.27

x1 = –2 ln (1 – 0.27) = 0.63 x2 = –2 ln (1 – 0.89) = 4.41

of intersection with F(x), a vertical line is dropped down to the x axis to obtain
the corresponding value of the variate. This process is illustrated in Figure
3.4 for generating variates x1 and x2 given U1 = 0.27 and U2 = 0.89.
Application of the inverse transformation method is straightforward as long
as there is a closed-form formula for the cumulative distribution function, which
is the case for many continuous distributions. However, the normal distribution
is one exception. Thus it is not possible to solve for a simple equation to
generate normally distributed variates. For these cases, there are other methods
that can be used to generate the random variates. See, for example, Law and
Kelton (2000) for a description of additional methods for generating random
variates from continuous distributions.

Discrete Distributions
The application of the inverse transformation method to generate variates from
discrete distributions is basically the same as for the continuous case. The differ-
ence is in how it is implemented. For example, consider the following
probability mass function: 
0.10 for x = 1
p(x) = P(X = x) =  0.30 for x = 2

0.60 for x = 3
The random variate x has three possible values. The probability that x is equal to
1 is 0.10, P(X = 1) = 0.10; P(X = 2) = 0.30; and P(X = 3) = 0.60. The
cumula-
tive distribution function F(x) is shown in Figure 3.5. The random variable x
could be used in a simulation to represent the number of defective components
on a circuit board or the number of drinks ordered from a drive-through window,
for example.
Suppose that an observation from the above discrete distribution is desired.
The first step is to generate U, where U is uniform(0,1). Using Figure 3.5, the
58 Part I Study Chapters

FIGURE 3.5 F(x)

Graphical explanation 1.00
of inverse
transformation U2 = 0.89
method for discrete
variates.

0.40

U1 = 0.27

0.1
U3 = 0.05 0 1 2 3
x3 = 1 x1 = 2 x2 = 3

value of the random variate is determined by locating U on the y axis, drawing a

horizontal line from that point until it intersects with a step in the cumulative
function, and then dropping a vertical line from that point to the x axis to read
the value of the variate. This process is illustrated in Figure 3.5 for x1, x2, and x3
given
U1 = 0.27, U2 = 0.89, and U3 = 0.05. Equivalently, if 0 ≤ Ui ≤ 0.10, then xi =
1; if 0.10 < Ui ≤ 0.40, then xi = 2; if 0.40 < Ui ≤ 1.00, then xi = 3. Note
that
should we generate 100 variates using the above process, we would expect a value
of 3 to be returned 60 times, a value of 2 to be returned 30 times, and a value of
1 to be returned 10 times.
The inverse transformation method can be applied to any discrete
distribution by dividing the y axis into subintervals as defined by the cumulative
distribution function. In our example case, the subintervals were [0, 0.10],
(0.10, 0.40], and (0.40, 1.00]. For each subinterval, record the appropriate
value for the random variate. Next, develop an algorithm that calls the
random number generator to receive a specific value for U, searches for and
locates the subinterval that contains U, and returns the appropriate value for the
random variate.
Locating the subinterval that contains a specific U value is relatively
straight- forward when there are only a few possible values for the variate.
However, the number of possible values for a variate can be quite large for
some discrete distributions. For example, a random variable having 50
possible values could require that 50 subintervals be searched before
locating the subinterval that contains U. In such cases, sophisticated search
algorithms have been developed that quickly locate the appropriate subinterval
by exploiting certain characteristics of the discrete distribution for which the
search algorithm was designed. A good source of information on the subject can
be found in Law and Kelton (2000).
 Chapter 3 Simulation Basics 59

3.5 Simple Spreadsheet Simulation

This chapter has covered some really useful information, and it will be construc-
tive to pull it all together for our first dynamic, stochastic simulation model. The
simulation will be implemented as a spreadsheet model because the example
system is not so complex as to require the use of a commercial simulation soft-
ware product. Furthermore, a spreadsheet will provide a nice tabulation of the
random events that produce the output from the simulation, thereby making it
ideal for demonstrating how simulations of dynamic, stochastic systems are
often accomplished. The system to be simulated follows.
Customers arrive to use an automatic teller machine (ATM) at a mean inter-
arrival time of 3.0 minutes exponentially distributed. When customers arrive to
the system they join a queue to wait for their turn on the ATM. The queue has
the capacity to hold an infinite number of customers. Customers spend an
average of
2.4 minutes exponentially distributed at the ATM to complete their transactions,
which is called the service time at the ATM. Simulate the system for the arrival
and processing of 25 customers and estimate the expected waiting time for cus-
tomers in the queue (the average time customers wait in line for the ATM) and
the expected time in the system (the average time customers wait in the queue
plus the average time it takes them to complete their transaction at the ATM).
Using the systems terminology introduced in Chapter 2 to describe the ATM
system, the entities are the customers that arrive to the ATM for processing. The
resource is the ATM that serves the customers, which has the capacity to serve
one customer at a time. The system controls that dictate how, when, and where
activ- ities are performed for this ATM system consist of the queuing discipline,
which is first-in, first-out (FIFO). Under the FIFO queuing discipline the
entities (customers) are processed by the resource (ATM) in the order that they
arrive to the queue. Figure 3.6 illustrates the relationships of the elements of
the system with the customers appearing as dark circles.

FIGURE 3.6
Descriptive drawing of the automatic teller machine (ATM) system.

Arriving ATM ATM server Departing

customers queue (resource) customers
(entities) (FIFO) (entities)

8 7 6 5 4 3 2 1

Interarrival time
4.8 minutes

7th customer 6th customer

arrives at arrives at
21.0 min. 16.2 min.
60 Part I Study Chapters

Our objective in building a spreadsheet simulation model of the ATM

system is to estimate the average amount of time the 25 customers will spend
waiting in the queue and the average amount of time the customers will spend in
the system. To accomplish our objective, the spreadsheet will need to generate
random numbers and random variates, to contain the logic that controls how
customers are processed by the system, and to compute an estimate of system
performance mea- sures. The spreadsheet simulation is shown in Table 3.2 and
is divided into three main sections: Arrivals to ATM, ATM Processing Time,
and ATM Simulation Logic. The Arrivals to ATM and ATM Processing Time
provide the foundation for the simulation, while the ATM Simulation Logic
contains the spreadsheet pro- gramming that mimics customers flowing through
the ATM system. The last row of the Time in Queue column and the Time in
System column under the ATM Simulation Logic section contains one
observation of the average time customers wait in the queue, 1.94 minutes, and
one observation of their average time in the system, 4.26 minutes. The values
were computed by averaging the 25 customer time values in the respective
columns.
Do you think customer number 17 (see the Customer Number column)
became upset over having to wait in the queue for 6.11 minutes to conduct a
0.43 minute transaction at the ATM (see the Time in Queue column and the
Service Time column under ATM Simulation Logic)? Has something like this
ever happened to you in real life? Simulation can realistically mimic the
behavior of a system. More time will be spent interpreting the results of our
spreadsheet simulation after we understand how it was put together.

3.5.1 Simulating Random Variates

The interarrival time is the elapsed time between customer arrivals to the ATM.
This time changes according to the exponential distribution with a mean of
3.0 minutes. That is, the time that elapses between one customer arrival and the
next is not the same from one customer to the next but averages out to be 3.0
min- utes. This is illustrated in Figure 3.6 in that the interarrival time
between cus- tomers 7 and 8 is much smaller than the interarrival time of 4.8
minutes between customers 6 and 7. The service time at the ATM is also a
random variable follow- ing the exponential distribution and averages 2.4
minutes. To simulate this sto- chastic system, a random number generator is
needed to produce observations (random variates) from the exponential
distribution. The inverse transformation method was used in Section 3.4.2 just
for this purpose.
The transformation equation is
X i = −β ln (1 − Ui ) for i = 1, 2, 3, . . . , 25
where Xi represents the ith value realized from the exponential distribution with
mean β, and Ui is the ith random number drawn from a uniform(0,1)
distribution. The i = 1, 2, 3, . . . , 25 indicates that we will compute 25 values
from the transfor- mation equation. However, we need to have two different
versions of this equation
to generate the two sets of 25 exponentially distributed random variates needed
to simulate 25 customers because the mean interarrival time of β = 3.0 minutes
is dif- ferent than the mean service time of β = 2.4 minutes. Let X 1i denote the
interarrival
 Harrell
−Ghos
h−Bow
den:
Simula
TABLE 3.2 Spreadsheet Simulation of Automatic Teller Machine (ATM) tion
Using
ProMo
Arrivals to ATM ATM Processing Time ATM Simulation Logic
del,
Random Interarriva Random Service Custome Arriva Begin Servic Departur Time in Time in I.
Stream 1 Number l Time Stream 2 Number Time r l Time Service Time e Time e Time Queue System S
(U 1i ) (U 2i ) (X 2i ) tu
i (Z 1i ) (X 1i ) (Z 2i ) Number (2) (3) (4) (5) = (3) + (4) (6) = (3) − (2) (7) = (5) − (2) d
(1) y
0 3 122 C
1 66 0.516 2.18 5 0.039 0.10 1 2.18 2.18 0.10 2.28 0.00 0.10 h
2 109 0.852 5.73 108 0.844 4.46 2 7.91 7.91 4.46 12.37 0.00 4.46
3 116 0.906 7.09 95 0.742 3.25 3 15.00 15.00 3.25 18.25 0.00 3.25
4 7 0.055 0.17 78 0.609 2.25 4 15.17 18.25 2.25 20.50 3.08 5.33
5 22 0.172 0.57 105 0.820 4.12 5 15.74 20.50 4.12 24.62 4.76 8.88 3.
6 81 0.633 3.01 32 0.250 0.69 6 18.75 24.62 0.69 25.31 5.87 6.56 Si
7 40 0.313 1.13 35 0.273 0.77 7 19.88 25.31 0.77 26.08 5.43 6.20 m
ul
8 75 0.586 2.65 98 0.766 3.49 8 22.53 26.08 3.49 29.57 3.55 7.04 at
9 42 0.328 1.19 13 0.102 0.26 9 23.72 29.57 0.26 29.83 5.85 6.11 io
10 117 0.914 7.36 20 0.156 0.41 10 31.08 31.08 0.41 31.49 0.00 0.41 n
11 28 0.219 0.74 39 0.305 0.87 11 31.82 31.82 0.87 32.69 0.00 0.87 B
12 79 0.617 2.88 54 0.422 1.32 12 34.70 34.70 1.32 36.02 0.00 1.32
13 126 0.984 12.41 113 0.883 5.15 13 47.11 47.11 5.15 52.26 0.00 5.15
14 89 0.695 3.56 72 0.563 1.99 14 50.67 52.26 1.99 54.25 1.59 3.58
15 80 0.625 2.94 107 0.836 4.34 15 53.61 54.25 4.34 58.59 0.64 4.98
16 19 0.148 0.48 74 0.578 2.07 16 54.09 58.59 2.07 60.66 4.50 6.57
17 18 0.141 0.46 21 0.164 0.43 17 54.55 60.66 0.43 61.09 6.11 6.54
18 125 0.977 11.32 60 0.469 1.52 18 65.87 65.87 1.52 67.39 0.00 1.52
19 68 0.531 2.27 111 0.867 4.84 19 68.14 68.14 4.84 72.98 0.00 4.84
20 23 0.180 0.60 30 0.234 0.64 20 68.74 72.98 0.64 73.62 4.24 4.88
21 102 0.797 4.78 121 0.945 6.96 21 73.52 73.62 6.96 80.58 0.10 7.06
22 97 0.758 4.26 112 0.875 4.99 22 77.78 80.58 4.99 85.57 2.80 7.79
23 120 0.938 8.34 51 0.398 1.22 23 86.12 86.12 1.22 87.34 0.00 1.22 ©
24 91 0.711 3.72 50 0.391 1.19 24 89.84 89.84 1.19 91.03 0.00 1.19 The
25 122 0.953 9.17 29 0.227 0.62 25 99.01 99.01 0.62 99.63 0.00 0.62 McGr
aw−
Average 1.94 4.26
Hill
Comp

6
1
62 Part I Study Chapters

time and X 2i denote the service time generated for the ith customer simulated in
the system. The equation for transforming a random number into an interarrival
time observation from the exponential distribution with mean β = 3.0 minutes
becomes
X 1i = −3.0 ln (1 − U 1i ) for i = 1, 2, 3, . . . , 25
where U 1i denotes the ith value drawn from the random number generator using
Stream 1. This equation is used in the Arrivals to ATM section of Table 3.2
under the Interarrival Time (X 1i ) column.
The equation for transforming a random number into an ATM service time
ob- servation from the exponential distribution with mean β = 2.4 minutes
becomes
X 2i = −2.4 ln (1 − U 2i ) for i = 1, 2, 3, . . . , 25
where U 2i denotes the ith value drawn from the random number generator using
Stream 2. This equation is used in the ATM Processing Time section of Table 3.2
under the Service Time (X 2i ) column.
Let’s produce the sequence of U 1i values that feeds the transformation
equa- tion (X 1i ) for interarrival times using a linear congruential generator
(LCG) similar to the one used in Table 3.1. The equations are
Z 1i = (21Z 1i −1 + 3) mod(128)
U 1i = Z 1i /128 for i = 1, 2, 3, . . . , 25
The authors defined Stream 1’s starting or seed value to be 3. So we will use
Z 10 = 3 to kick off this stream of 25 random numbers. These equations are
used in the Arrivals to ATM section of Table 3.2 under the Stream 1 (Z 1i ) and
Random Number (U 1i ) columns.
Likewise, we will produce the sequence of U 2i values that feeds the trans-
formation equation (X 2i ) for service times using
Z 2i = (21Z 2i −1 + 3) mod(128)
U 2i = Z 2i /128 for i = 1, 2, 3, . . . , 25
and will specify a starting seed value of Z 20 = 122, Stream 2’s seed value, to
kick off the second stream of 25 random numbers. These equations are used
in the ATM Processing Time section of Table 3.2 under the Stream 2 (Z 2i ) and
Random Number (U 2i ) columns.
The spreadsheet presented in Table 3.2 illustrates 25 random variates for
both the interarrival time, column (X 1i ), and service time, column (X 2i ).
All time values are given in minutes in Table 3.2. To be sure we pull this
together correctly, let’s compute a couple of interarrival times with mean β
= 3.0 minutes and compare them to the values given in Table 3.2.
Given Z 10 = 3
Z 11 = (21Z 10 + 3) mod(128) = (21(3) + 3) mod(128)
= (66) mod(128) = 66
U 11 = Z 11/128 = 66/128 = 0.516
X 11 = −β ln (1 − U 11) = −3.0 ln (1 − 0.516) = 2.18 minutes
 Chapter 3 Simulation Basics 63

FIGURE 3.7
Microsoft Excel
snapshot of the
ATM spreadsheet
illustrating the
equations for the
Arrivals to ATM
section.

The value of 2.18 minutes is the first value appearing under the column,
Interarrival Time (X 1i ). To compute the next interarrival time value X 12 , we
start by using the value of Z 11 to compute Z 12.
Given Z 11 = 66
Z 12 = (21Z 11 + 3) mod(128) = (21(66) + 3) mod(128) = 109
U 12 = Z 12/128 = 109/128 = 0.852
X 12 = −3 ln (1 − U 12) = −3.0 ln (1 − 0.852) = 5.73 minutes
Figure 3.7 illustrates how the equations were programmed in Microsoft Excel
for the Arrivals to ATM section of the spreadsheet. Note that the U 1i and X 1i
values in Table 3.2 are rounded to three and two places to the right of the
decimal, respectively. The same rounding rule is used for U 2i and X 2i .
It would be useful for you to verify a few of the service time values with
mean β = 2.4 minutes appearing in Table 3.2 using
Z 20 = 122
Z 2i = (21Z 2i −1 + 3) mod(128)
U 2i = Z 2i /128
X 2i = −2.4 ln (1 − U 2i ) for i = 1, 2, 3, . . .
The equations started out looking a little difficult to manipulate but turned
out not to be so bad when we put some numbers in them and organized them
in a spreadsheet—though it was a bit tedious. The important thing to note here
is that although it is transparent to the user, ProModel uses a very similar
method to produce exponentially distributed random variates, and you now
understand how it is done.
64 Part I Study Chapters

The LCG just given has a maximum cycle length of 128 random numbers
(you may want to verify this), which is more than enough to generate 25 interar-
rival time values and 25 service time values for this simulation. However, it is a
poor random number generator compared to the one used by ProModel. It was
chosen because it is easy to program into a spreadsheet and to compute by hand
to facilitate our understanding. The biggest difference between it and the
random number generator in ProModel is that the ProModel random number
generator manipulates much larger numbers to pump out a much longer stream
of numbers that pass all statistical tests for randomness.
Before moving on, let’s take a look at why we chose Z 10 = 3 and Z 20 =
122. Our goal was to make sure that we did not use the same uniform(0,1)
random
number to generate both an interarrival time and a service time. If you look
carefully at Table 3.2, you will notice that the seed value Z 20 = 122 is the Z
125 value from random number Stream 1. Stream 2 was merely defined to start
where Stream 1 ended. Thus our spreadsheet used a unique random number to
generate each interarrival and service time. Now let’s add the necessary
logic to our spreadsheet to conduct the simulation of the ATM system.

3.5.2 Simulating Dynamic, Stochastic Systems

The heart of the simulation is the generation of the random variates that drive
the stochastic events in the simulation. However, the random variates are simply
a list of numbers at this point. The spreadsheet section labeled ATM Simulation
Logic in Table 3.2 is programmed to coordinate the execution of the events to
mimic the processing of customers through the ATM system. The simulation
program must keep up with the passage of time to coordinate the events. The
word dynamic appearing in the title for this section refers to the fact that the
simulation tracks the passage of time.
The first column under the ATM Simulation Logic section of Table 3.2,
labeled Customer Number, is simply to keep a record of the order in which the
25 customers are processed, which is FIFO. The numbers appearing in parenthe-
ses under each column heading are used to illustrate how different columns are
added or subtracted to compute the values appearing in the simulation.
The Arrival Time column denotes the moment in time at which each
customer arrives to the ATM system. The first customer arrives to the system at
time 2.18 minutes. This is the first interarrival time value (X 11 = 2.18)
appearing in the Arrival to ATM section of the spreadsheet table. The second
customer arrives to the system at time 7.91 minutes. This is computed by taking
the arrival time of the first customer of 2.18 minutes and adding to it the next
interarrival time of X 12 = 5.73 minutes that was generated in the Arrival to
ATM section of the spreadsheet table.
The arrival time of the second customer is 2.18 + 5.73 = 7.91 minutes. The
process continues with the third customer arriving at 7.91 + 7.09 = 15.00
minutes.
The trickiest piece to program into the spreadsheet is the part that determines
the moment in time at which customers begin service at the ATM after waiting in
the queue. Therefore, we will skip over the Begin Service Time column for now
and come back to it after we understand how the other columns are computed.
Chapter 3 Simulation Basics 65

The Service Time column simply records the simulated amount of time
required for the customer to complete their transaction at the ATM. These values
are copies of the service time X2i values generated in the ATM Processing Time
section of the spreadsheet.
The Departure Time column records the moment in time at which a
customer departs the system after completing their transaction at the ATM. To
compute the time at which a customer departs the system, we take the time at
which the cus- tomer gained access to the ATM to begin service, column (3),
and add to that the length of time the service required, column (4). For
example, the first customer gained access to the ATM to begin service at 2.18
minutes, column (3). The ser-
vice time for the customer was determined to be 0.10 minutes in column (4). So,
the customer departs 0.10 minutes later or at time 2.18 + 0.10 = 2.28
minutes. This customer’s short service time must be because they forgot their
PIN number and could not conduct their transaction.
The Time in Queue column records how long a customer waits in the queue
before gaining access to the ATM. To compute the time spent in the queue, we
take the time at which the ATM began serving the customer, column (3), and
sub- tract from that the time at which the customer arrived to the system,
column (2). The fourth customer arrives to the system at time 15.17 and begins
getting service from the ATM at 18.25 minutes; thus, the fourth customer’s time
in the queue is
18.25 − 15.17 = 3.08 minutes.
The Time in System column records how long a customer was in the system.
To compute the time spent in the system, we subtract the customer’s departure
time, column (5), from the customer’s arrival time, column (2). The fifth
customer arrives to the system at 15.74 minutes and departs the system at
24.62 minutes. Therefore, this customer spent 24.62 − 15.74 = 8.88 minutes in
the system.
Now let’s go back to the Begin Service Time column, which records the time
at which a customer begins to be served by the ATM. The very first customer to
arrive to the system when it opens for service advances directly to the ATM.
There is no waiting time in the queue; thus the value recorded for the time that
the first customer begins service at the ATM is the customer’s arrival time.
With the exception of the first customer to arrive to the system, we have to
capture the logic that a customer cannot begin service at the ATM until the
previous customer using the ATM completes his or her transaction. One way to
do this is with an IF state- ment as follows:

IF (Current Customer's Arrival Time < Previous Customer's

Departure Time)
THEN (Current Customer's Begin Service Time = Previous
Customer's Departure Time)
ELSE (Current Customer's Begin Service Time = Current
Customer's Arrival Time)

Figure 3.8 illustrates how the IF statement was programmed in Microsoft

Excel. The format of the Excel IF statement is

IF (logical test, use this value if test is true, else use this
value if test is false)
66 Part I Study Chapters

FIGURE 3.8
Microsoft Excel
snapshot of the
ATM spreadsheet
illustrating the IF
statement for the
Begin Service Time
column.

The Excel spreadsheet cell L10 (column L, row 10) in Figure 3.8 is the
Begin Service Time for the second customer to arrive to the system and is
programmed with IF(K10<N9,N9,K10). Since the second customer’s arrival
time (Excel cell K10) is not less than the first customer’s departure time (Excel
cell N9), the logical test evaluates to “false” and the second customer’s time to
begin service is set to his or her arrival time (Excel cell K10). The fourth
customer shown in Figure 3.8 pro- vides an example of when the logical test
evaluates to “true,” which results in the fourth customer beginning service when
the third customer departs the ATM.

3.5.3 Simulation Replications and Output

Analysis
The spreadsheet model makes a nice simulation of the first 25 customers to
arrive to the ATM system. And we have a simulation output observation of 1.94
minutes that could be used as an estimate for the average time that the 25
customers waited in the queue (see the last value under the Time in Queue
column, which represents the average of the 25 individual customer queue
times). We also have a simulation output observation of 4.26 minutes that
could be used as an estimate for the average time the 25 customers were in
the system. These results represent only one possible value of each performance
measure. Why? If at least one input vari- able to the simulation model is
random, then the output of the simulation model will also be random. The
interarrival times of customers to the ATM system and their service times are
random variables. Thus the output of the simulation model of the ATM system is
also a random variable. Before we bet that the average time customers spend in
the system each day is 4.26 minutes, we may want to run the simulation model
again with a new sample of interarrival times and service times to see what
happens. This would be analogous to going to the real ATM on a sec- ond day to
replicate our observing the first 25 customers processed to compute a second
observation of the average time that the 25 customers spend in the system. In
simulation, we can accomplish this by changing the values of the seed numbers
used for our random number generator.
 Chapter 3 Simulation Basics 67

TABLE 3.3 Summary of ATM System Simulation Output

Replication Average Time in Queue Average Time in System

1 1.94 minutes 4.26 minutes

2 0.84 minutes 2.36 minutes
Average 1.39 minutes 3.31 minutes

Changing the seed values Z 10 and Z 20 causes the spreadsheet program to

recompute all values in the spreadsheet. When we change the seed values Z 10
and Z 20 appropriately, we produce another replication of the simulation. When
we run replications of the simulation, we are driving the simulation with a set of
random numbers never used by the simulation before. This is analogous to the
fact that the ar- rival pattern of customers to the real ATM and their transaction
times at the ATM will not likely be the same from one day to the next. If Z 10 =
29 and Z 20 = 92 are used to start the random number generator for the ATM
simulation model, a new replica- tion of the simulation will be computed that
produces an average time in queue of
0.84 minutes and an average time in system of 2.36 minutes. Review question
num- ber eight at the end of the chapter which asks you to verify this second
replication. Table 3.3 contains the results from the two replications. Obviously,
the results from this second replication are very different than those produced
by the first replication. Good thing we did not make bets on how much time
customers spend in the system based on the output of the simulation for the first
replication only. Sta- tistically speaking, we should get a better estimate of the
average time customers spend in queue and the average time they are in the
system if we combine the results from the two replications into an overall
average. Doing so yields an estimate of
1.39 minutes for the average time in queue and an estimate of 3.31 minutes for
the average time in system (see Table 3.3). However, the large variation in the
output of the two simulation replications indicates that more replications are
needed to get reasonably accurate estimates. How many replications are
enough? You will know how to answer the question upon completing Chapter 9.
While spreadsheet technology is effective for conducting Monte Carlo
simu- lations and simulations of simple dynamic systems, it is ineffective and
inefficient as a simulation tool for complex systems. Discrete-event
simulation software technology was designed especially for mimicking the
behavior of complex sys- tems and is the subject of Chapter 4.

3.6 Summary
Modeling random behavior begins with transforming the output produced by a
random number generator into observations (random variates) from an appropri-
ate statistical distribution. The values of the random variates are combined with
logical operators in a computer program to compute output that mimics the per-
formance behavior of stochastic systems. Performance estimates for stochastic
68 Part I Study Chapters

simulations are obtained by calculating the average value of the performance

metric across several replications of the simulation. Models can realistically
simulate a variety of systems.

3.7 Review Questions

1. What is the difference between a stochastic model and a deterministic
model in terms of the input variables and the way results are interpreted?
2. Give a statistical description of the numbers produced by a random
number generator.
3. What are the two statistical properties that random numbers must
satisfy?
4. Given these two LCGs:
Zi = (9Zi−1 + 3) mod(32)
Zi = (12Zi−1 + 5) mod(32)
a. Which LCG will achieve its maximum cycle length? Answer
the question without computing any Zi values.
b. Compute Z1 through Z5 from a seed of 29 (Z0 = 29) for the
second LCG.
5. What is a random variate, and how are random variates generated?
6. Apply the inverse transformation method to generate three variates from
the following distributions using U1 = 0.10, U2 = 0.53, and U3 = 0.15.
a. Probability density function:
1
 for α x β
≤ ≤
β−α
f (x) = 
0 elsewhere
where β = 7 and α = 4.
b. Probability mass function:
x 1, 2, 3, 4, 5
 for x

=
 15
p(x) = P(X = x) = 
0 elsewhere
7. How would a random number generator be used to simulate a 12 percent
chance of rejecting a part because it is defective?
8. Reproduce the spreadsheet simulation of the ATM system presented
in Section 3.5. Set the random numbers seeds Z 10 = 29 and Z 20 =
92 to compute the average time customers spend in the queue and in
the system.
a. Verify that the average time customers spend in the queue and in the
system match the values given for the second replication in Table 3.3.
 Chapter 3 Simulation Basics 69

b. Verify that the resulting random number Stream 1 and random

number Stream 2 are completely different than the corresponding
streams in Table 3.2. Is this a requirement for a new replication of
the simulation?

Reference
s
Banks, Jerry; John S. Carson II; Barry L. Nelson; and David M. Nicol. Discrete-Event
System Simulation. Englewood Cliffs, NJ: Prentice Hall, 2001.
Hoover, Stewart V., and Ronald F. Perry. Simulation: A Problem-Solving Approach.
Reading, MA: Addison-Wesley, 1989.
Johnson, R. A. Miller and Freund’s Probability and Statistics for Engineers. 5th ed.
Englewood Cliffs, NJ: Prentice Hall, 1994.
Law, Averill M., and David W. Kelton. Simulation Modeling and Analysis. New York:
McGraw-Hill, 2000.
L’Ecuyer, P. “Random Number Generation.” In Handbook of Simulation: Principles,
Methodology, Advances, Applications, and Practice, ed. J. Banks, pp. 93–137.
New York: John Wiley & Sons, 1998.
Pooch, Udo W., and James A. Wall. Discrete Event Simulation: A Practical Approach.
Boca Raton, FL: CRC Press, 1993.
Pritsker, A. A. B. Introduction to Simulation and SLAM II. 4th ed. New York: John Wiley
& Sons, 1995.
Ross, Sheldon M. A Course in Simulation. New York: Macmillan, 1990.
Shannon, Robert E. System Simulation: The Art and Science. Englewood Cliffs, NJ:
Prentice Hall, 1975.
Thesen, Arne, and Laurel E. Travis. Simulation for Decision Making. Minneapolis, MN:
West Publishing, 1992.
Widman, Lawrence E.; Kenneth A. Loparo; and Norman R. Nielsen. Artificial Intelligence,
Simulation, and Modeling. New York: John Wiley & Sons, 1989.
Harrell−Ghosh−Bo I. Study 4. © The
wden: Simulation Chapters Discrete−Eve McGraw−Hill
Using ProModel, nt Companies,
Second Edition

C H A P T E R

4 DISCRETE-EVENT
SIMULATION

“When the only tool you have is a hammer, every problem begins to resemble a
nail.”
—Abraham Maslow

4.1 Introduction
Building on the foundation provided by Chapter 3 on how random numbers and
random variates are used to simulate stochastic systems, the focus of this chapter
is on discrete-event simulation, which is the main topic of this book. A
discrete- event simulation is one in which changes in the state of the
simulation model occur at discrete points in time as triggered by events. The
events in the automatic teller machine (ATM) simulation example of Chapter
3 that occur at discrete points in time are the arrivals of customers to the ATM
queue and the completion of their transactions at the ATM. However, you will
learn in this chapter that the spreadsheet simulation of the ATM system in
Chapter 3 was not technically exe- cuted as a discrete-event simulation.
This chapter first defines what a discrete-event simulation is compared to a
continuous simulation. Next the chapter summarizes the basic technical issues
re- lated to discrete-event simulation to facilitate your understanding of how to
effec- tively use the tool. Questions that will be answered include these:
• How does discrete-event simulation work?
• What do commercial simulation software packages provide?
• What are the differences between simulation languages and simulators?
• What is the future of simulation technology?
A manual dynamic, stochastic, discrete-event simulation of the ATM example
system from Chapter 3 is given to further illustrate what goes on inside this type
of simulation.

71
72 Part I Study Chapters

4.2 Discrete-Event versus Continuous Simulation

Commonly, simulations are classified according to the following characteristics:
• Static or dynamic
• Stochastic or deterministic
• Discrete-event or continuous
In Chapter 3 we discussed the differences between the first two sets of character-
istics. Now we direct our attention to discrete-event versus continuous simula-
tions. A discrete-event simulation is one in which state changes occur at discrete
points in time as triggered by events. Typical simulation events might include
• The arrival of an entity to a workstation.
• The failure of a resource.
• The completion of an activity.
• The end of a shift.
State changes in a model occur when some event happens. The state of the
model becomes the collective state of all the elements in the model at a
particular point in time. State variables in a discrete-event simulation are
referred to as discrete- change state variables. A restaurant simulation is an
example of a discrete-event simulation because all of the state variables in the
model, such as the number of customers in the restaurant, are discrete-change
state variables (see Figure 4.1). Most manufacturing and service systems are
typically modeled using discrete- event simulation.
In continuous simulation, state variables change continuously with respect
to time and are therefore referred to as continuous-change state variables. An
exam- ple of a continuous-change state variable is the level of oil in an oil
tanker that is being either loaded or unloaded, or the temperature of a building
that is controlled by a heating and cooling system. Figure 4.2 compares a
discrete-change state variable and a continuous-change state variable as they
vary over time.

FIGURE 4.1 Number of

Discrete events cause customers
discrete state in restaurant
changes.
3

1 …

Time
Event 1 Event 2 Event 3
Start (customer (custome (custome
Simulatio arrives) r arrives) r departs)
n
 Chapter 4 Discrete-Event Simulation 73

FIGURE 4.2
Comparison of a Continuous-
change state
discrete-change
variable
state variable and a
continuous-change
state variable. Value
Discrete-change
state variable

Time

Continuous simulation products use either differential equations or differ-

ence equations to define the rates of change in state variables over time.

4.2.1 Differential Equations

The change that occurs in some continuous-change state variables is expressed
in terms of the derivatives of the state variables. Equations involving derivatives
of a state variable are referred to as differential equations. The state variable v,
for example, might change as a function of both v and time t:
d v(t ) 2 2
= v (t ) + t
dt
We then need a second equation to define the initial condition of v:
v(0) = K
On a computer, numerical integration is used to calculate the change in a
particular response variable over time. Numerical integration is performed at the
end of successive small time increments referred to as steps. Numerical analysis
techniques, such as Runge-Kutta integration, are used to integrate the differential
equations numerically for each incremental time step. One or more threshold
values for each continuous-change state variable are usually defined that
determine when some action is to be triggered, such as shutting off a valve or
turning on a pump.

4.2.2 Difference Equations

Sometimes a continuous-change state variable can be modeled using difference
equations. In such instances, the time is decomposed into periods of length t. An
algebraic expression is then used to calculate the value of the state variable at
the end of period k + 1 based on the value of the state variable at the end of
period k. For example, the following difference equation might be used to
express the rate of change in the state variable v as a function of the current
value of v, a rate of change (r), and the length of the time period (�t ):
v(k + 1) = v(k) + r �t
74 Part I Study Chapters

Batch processing in which fluids are pumped into and out of tanks can often be
modeled using difference equations.

4.2.3 Combined Continuous and Discrete Simulation

Many simulation software products provide both discrete-event and continuous
simulation capabilities. This enables systems that have both discrete-event and
continuous characteristics to be modeled, resulting in a hybrid simulation. Most
processing systems that have continuous-change state variables also have
discrete- change state variables. For example, a truck or tanker arrives at a fill
station (a discrete event) and begins filling a tank (a continuous process).
Four basic interactions occur between discrete- and continuous-change
variables:
1. A continuous variable value may suddenly increase or decrease as
the result of a discrete event (like the replenishment of inventory in
an inventory model).
2. The initiation of a discrete event may occur as the result of reaching a
threshold value in a continuous variable (like reaching a reorder point in
an inventory model).
3. The change rate of a continuous variable may be altered as the result of
a discrete event (a change in inventory usage rate as the result of a
sudden change in demand).
4. An initiation or interruption of change in a continuous variable may
occur as the result of a discrete event (the replenishment or depletion of
inventory initiates or terminates a continuous change of the continuous
variable).

4.3 How Discrete-Event Simulation Works

Most simulation software, including ProModel, presents a process-oriented
world view to the user for defining models. This is the way most humans tend
to think about systems that process entities. When describing a system, it is
natural to do so in terms of the process flow. Entities begin processing at activity
A then move on to activity B and so on. In discrete-event simulation, these
process flow defin- itions are translated into a sequence of events for running
the simulation: first event 1 happens (an entity begins processing at activity
A), then event 2 occurs (it completes processing at activity A), and so on.
Events in simulation are of two types: scheduled and conditional, both of which
create the activity delays in the simulation to replicate the passage of time.
A scheduled event is one whose time of occurrence can be determined
beforehand and can therefore be scheduled in advance. Assume, for example,
that an activity has just begun that will take X amount of time, where X is a
normally distributed random variable with a mean of 5 minutes and a standard
deviation of
Chapter 4 Discrete-Event Simulation 75

1.2 minutes. At the start of the activity, a normal random variate is generated
based on these parameters, say 4.2 minutes, and an activity completion event is
scheduled for that time into the future. Scheduled events are inserted chronologi-
cally into an event calendar to await the time of their occurrence. Events that
occur at predefined intervals theoretically all could be determined in advance
and therefore be scheduled at the beginning of the simulation. For example,
entities arriving every five minutes into the model could all be scheduled easily
at the start of the simulation. Rather than preschedule all events at once that
occur at a set fre- quency, however, they are scheduled only when the next
occurrence must be de- termined. In the case of a periodic arrival, the next
arrival would not be scheduled until the current scheduled arrival is actually
pulled from the event calendar for processing. This postponement until the
latest possible moment minimizes the size of the event calendar and eliminates
the necessity of knowing in advance how many events to schedule when the
length of the simulation may be unknown.
Conditional events are triggered by a condition being met rather than by the
passage of time. An example of a conditional event might be the capturing of a
resource that is predicated on the resource being available. Another example
would be an order waiting for all of the individual items making up the order to
be assembled. In these situations, the event time cannot be known beforehand,
so the pending event is simply placed into a waiting list until the conditions can
be satisfied. Often multiple pending events in a list are waiting for the same
condi- tion. For example, multiple entities might be waiting to use the same
resource when it becomes available. Internally, the resource would have a
waiting list for all items currently waiting to use it. While in most cases events
in a waiting list are processed first-in, first-out (FIFO), items could be inserted
and removed using a number of different criteria. For example, items may be
inserted according to item priority but be removed according to earliest due
date.
Events, whether scheduled or conditional, trigger the execution of logic that
is associated with that event. For example, when an entity frees a resource, the
state and statistical variables for the resource are updated, the graphical
animation is up- dated, and the input waiting list for the resource is examined to
see what activity to respond to next. Any new events resulting from the
processing of the current event are inserted into either the event calendar or
another appropriate waiting list.
In real life, events can occur simultaneously so that multiple entities can be
doing things at the same instant in time. In computer simulation, however, espe-
cially when running on a single processor, events can be processed only one at a
time even though it is the same instant in simulated time. As a consequence, a
method or rule must be established for processing events that occur at the exact
same simulated time. For some special cases, the order in which events are
processed at the current simulation time might be significant. For example, an
entity that frees a resource and then tries to immediately get the same resource
might have an unfair advantage over other entities that might have been waiting
for that particular resource.
In ProModel, the entity, downtime, or other item that is currently being
processed is allowed to continue processing as far as it can at the current simula-
tion time. That means it continues processing until it reaches either a conditional
76 Part I Study Chapters

FIGURE 4.3 Start

Logic diagram of
how discrete-event
simulation works.
Create simulation
database and
schedule initial events.

Advance clock
to next event
time.

Yes Update
statistics and
Termination
generate
event?
output report.

No
Process event Stop
and schedule any
new events.

Update
statistics, state
variables, and
animation.

Yes Any conditional

events?

No

event that cannot be satisfied or a timed delay that causes a future event to be
scheduled. It is also possible that the object simply finishes all of the processing
defined for it and, in the case of an entity, exits the system. As an object is being
processed, any resources that are freed or other entities that might have been cre-
ated as byproducts are placed in an action list and are processed one at a time in
a similar fashion after the current object reaches a stopping point. To
deliberately
 Chapter 4 Discrete-Event Simulation 77

suspend the current object in order to allow items in the action list to be
processed, a zero delay time can be specified for the current object. This puts the
current item into the future events list (event calendar) for later processing,
even though it is still processed at the current simulation time.
When all scheduled and conditional events have been processed that are
possible at the current simulation time, the clock advances to the next scheduled
event and the process continues. When a termination event occurs, the
simulation ends and statistical reports are generated. The ongoing cycle of
processing sched- uled and conditional events, updating state and statistical
variables, and creating new events constitutes the essence of discrete-event
simulation (see Figure 4.3).

4.4 A Manual Discrete-Event Simulation Example

To illustrate how discrete-event simulation works, a manual simulation is
presented of the automatic teller machine (ATM) system of Chapter 3.
Customers arrive to use an automatic teller machine (ATM) at a mean
interarrival time of 3.0 minutes exponentially distributed. When customers
arrive to the system, they join a queue to wait for their turn on the ATM. The
queue has the capacity to hold an infinite number of customers. The ATM itself
has a capacity of one (only one customer at a time can be processed at the
ATM). Customers spend an average of 2.4 minutes ex- ponentially distributed at
the ATM to complete their transactions, which is called the service time at the
ATM. Assuming that the simulation starts at time zero, sim- ulate the ATM
system for its first 22 minutes of operation and estimate the expected waiting
time for customers in the queue (the average time customers wait in line for the
ATM) and the expected number of customers waiting in the queue (the average
number of customers waiting in the queue during the simulated time period). If
you are wondering why 22 minutes was selected as the simulation run length, it
is be- cause 22 minutes of manual simulation will nicely fit on one page of the
textbook. An entity flow diagram of the ATM system is shown in Figure 4.4.

4.4.1 Simulation Model Assumptions

We did not list our assumptions for simulating the ATM system back in Chapter
3 although it would have been a good idea to have done so. In any
simulation,

FIGURE 4.4
Entity flow diagram for example automatic teller machine (ATM) system.

Arriving customers ATM queue ATM server Departing

(entities) (FIFO) (resource) customers
(entities)

8 7 6 5 4 3 2 1
78 Part I Study Chapters

certain assumptions must be made where information is not clear or complete.

Therefore, it is important that assumptions be clearly documented. The assump-
tions we will be making for this simulation are as follows:
• There are no customers in the system initially, so the queue is empty and
the ATM is idle.
• The move time from the queue to the ATM is negligible and therefore
ignored.
• Customers are processed from the queue on a first-in, first-out (FIFO) basis.
• The ATM never experiences failures.

4.4.2 Setting Up the Simulation

A discrete-event simulation does not generate all of the events in advance as
was done in the spreadsheet simulation of Chapter 3. Instead the simulation
schedules the arrival of customer entities to the ATM queue and the departure
of customer entities from the ATM as they occur over time. That is, the
simulation calls a function to obtain an exponentially distributed interarrival
time value only when a new customer entity needs to be scheduled to arrive to
the ATM queue. Like- wise, the simulation calls a function to obtain an
exponentially distributed service time value at the ATM only after a customer
entity has gained access (entry) to the ATM and the entity’s future departure
time from the ATM is needed. An event calendar is maintained to coordinate
the processing of the customer arrival and customer departure events. As arrival
and departure event times are created, they are placed on the event calendar
in chronological order. As these events get processed, state variables (like the
contents of a queue) get changed and statistical accumulators (like the
cumulative time in the queue) are updated.
With this overview, let’s list the structured components needed to conduct the
manual simulation.

Simulation Clock
As the simulation transitions from one discrete-event to the next, the simulation
clock is fast forwarded to the time that the next event is scheduled to occur.
There is no need for the clock to tick seconds away until reaching the time at
which the next event in the list is scheduled to occur because nothing will
happen that changes the state of the system until the next event occurs. Instead,
the simulation clock advances through a series of time steps. Let ti denote the
value of the simu- lation clock at time step i, for i = 0 to the number of
discrete events to process. Assuming that the simulation starts at time zero, then
the initial value of the sim- ulation clock is denoted as t0 = 0. Using this
nomenclature, t1 denotes the value of the simulation clock when the first
discrete event in the list is processed, t2 de- notes the value of the simulation
clock when the second discrete-event in the list is processed, and so on.

Entity Attributes
To capture some statistics about the entities being processed through the system,
a discrete-event simulation maintains an array of entity attribute values.
Entity
Chapter 4 Discrete-Event Simulation 79

attributes are characteristics of the entity that are maintained for that entity until
the entity exits the system. For example, to compute the amount of time an
entity waited in a queue location, an attribute is needed to remember when the
entity en- tered the location. For the ATM simulation, one entity attribute is used
to remem- ber the customer’s time of arrival to the system. This entity attribute
is called the Arrival Time attribute. The simulation program computes how
long each cus- tomer entity waited in the queue by subtracting the time that the
customer entity arrived to the queue from the value of the simulation clock when
the customer en- tity gained access to the ATM.

State Variables
Two discrete-change state variables are needed to track how the status (state) of
the system changes as customer entities arrive in and depart from the ATM
system.
• Number of Entities in Queue at time step i, NQi.
• ATM Statusi to denote if the ATM is busy or idle at time step i.

Statistical Accumulators
The objective of the example manual simulation is to estimate the expected
amount of time customers wait in the queue and the expected number of cus-
tomers waiting in the queue. The average time customers wait in queue is a
simple average. Computing this requires that we record how many customers
passed through the queue and the amount of time each customer waited in the
queue. The average number of customers in the queue is a time-weighted
average, which is usually called a time average in simulation. Computing this
requires that we not only observe the queue’s contents during the simulation but
that we also measure the amount of time that the queue maintained each of the
observed values. We record each observed value after it has been multiplied
(weighted) by the amount of time it was maintained.
Here’s what the simulation needs to tally at each simulation time step i to
compute the two performance measures at the end of the simulation.
Simple-average time in queue.
• Record the number of customer entities processed through the queue,
Total Processed. Note that the simulation may end before all customer
entities in the queue get a turn at the ATM. This accumulator keeps track
of how many customers actually made it through the queue.
• For a customer processed through the queue, record the time that it waited
in the queue. This is computed by subtracting the value of the simulation
clock time when the entity enters the queue (stored in the entity attribute
array Arrival Time) from the value of the simulation clock time when the
entity leaves the queue, ti − Arrival Time.
Time-average number of customers in the queue.
• For the duration of the last time step, which is ti − ti −1 , and the number
of customer entities in the queue during the last time step, which is NQi
−1 , record the product of ti − ti −1 and NQi −1 . Call the product
(ti − ti −1)NQi −1 the Time-Weighted Number of Entities in the Queue.
80 Part I Study Chapters

Events
There are two types of recurring scheduled events that change the state of the
sys- tem: arrival events and departure events. An arrival event occurs when a
customer entity arrives to the queue. A departure event occurs when a customer
entity com- pletes its transaction at the ATM. Each processing of a customer
entity’s arrival to the queue includes scheduling the future arrival of the next
customer entity to the ATM queue. Each time an entity gains access to the ATM,
its future departure from the system is scheduled based on its expected service
time at the ATM. We actually need a third event to end the simulation. This
event is usually called the termination event.
To schedule the time at which the next entity arrives to the system, the
simu- lation needs to generate an interarrival time and add it to the current
simulation clock time, ti . The interarrival time is exponentially distributed
with a mean of
3.0 minutes for our example ATM system. Assume that the function E (3.0) re-
turns an exponentially distributed random variate with a mean of 3.0 minutes.
The future arrival time of the next customer entity can then be scheduled by
using the equation ti + E (3.0).
The customer service time at the ATM is exponentially distributed with a
mean of 2.4 minutes. The future departure time of an entity gaining access to the
ATM is scheduled by the equation ti + E (2.4).

Event Calendar
The event calendar maintains the list of active events (events that have been
scheduled and are waiting to be processed) in chronological order. The
simulation progresses by removing the first event listed on the event calendar,
setting the simulation clock, ti , equal to the time at which the event is scheduled
to occur, and processing the event.

4.4.3 Running the Simulation

To run the manual simulation, we need a way to generate exponentially
distributed random variates for interarrival times [the function E (3.0)] and
service times [the function E (2.4)]. Rather than using our calculators to
generate a random number and transform it into an exponentially distributed
random variate each time one is needed for the simulation, let’s take advantage
of the work we did to build the spreadsheet simulation of the ATM system in
Chapter 3. In Table 3.2 of Chapter 3, we generated 25 exponentially
distributed interarrival times with a mean of
3.0 minutes and 25 exponentially distributed service times with a mean of
2.4 minutes in advance of running the spreadsheet simulation. So when we need
a service time or an interarrival time for our manual simulation, let’s use the
values from the Service Time and Interarrival Time columns of Table 3.2
rather than computing them by hand. Note, however, that we do not need to
generate all random variates in advance for our manual discrete-event
simulation (that’s one of its advantages over spreadsheet simulation). We are
just using Table 3.2 to make our manual simulation a little less tedious, and
it will be instructive to
Chapter 4 Discrete-Event Simulation 81

compare the results of the manual simulation with those produced by the spread-
sheet simulation.
Notice that Table 3.2 contains a subscript i in the leftmost column. This sub-
script denotes the customer entity number as opposed to the simulation time
step. We wanted to point this out to avoid any confusion because of the different
uses of the subscript. In fact, you can ignore the subscript in Table 3.2 as you
pick val- ues from the Service Time and Interarrival Time columns.
A discrete-event simulation logic diagram for the ATM system is shown in
Figure 4.5 to help us carry out the manual simulation. Table 4.1 presents the re-
sults of the manual simulation after processing 12 events using the simulation
logic diagram presented in Figure 4.5. The table tracks the creation and schedul-
ing of events on the event calendar as well as how the state of the system
changes and how the values of the statistical accumulators change as events are
processed from the event calendar. Although Table 4.1 is completely filled in, it
was initially blank until the instructions presented in the simulation logic
diagram were exe- cuted. As you work through the simulation logic diagram,
you should process the information in Table 4.1 from the first row down to the
last row, one row at a time (completely filling in a row before going down to the
next row). A dash (—) in a cell in Table 4.1 signifies that the simulation logic
diagram does not require you to update that particular cell at the current
simulation time step. An arrow (↑) in a cell in the table also signifies that the
simulation logic diagram does not require you to update that cell at the current
time step. However, the arrows serve as a re- minder to look up one or more
rows above your current position in the table to de- termine the state of the ATM
system. Arrows appear under the Number of Entities in Queue, NQi column, and
ATM Statusi column. The only exception to the use of dashes or arrows is that
we keep a running total in the two Cumulative sub- columns in the table for
each time step. Let’s get the manual simulation started.
i = 0, t0 = 0. As shown in Figure 4.5, the first block after the start position
indicates that the model is initialized to its starting conditions. The
simulation time step begins at i = 0. The initial value of the simulation
clock is zero, t0 = 0. The system state variables are set to ATM Status0 =
“Idle”; Number of Entities in Queue, NQ0 = 0; and the Entity Attribute
Array is cleared. This reflects the initial conditions of no customer entities
in the queue and an idle ATM. The statistical accumulator Total Processed is
set to zero. There are two different Cumulative variables in Table 4.1: one to
accumulate the time in queue values of ti − Arrival Time, and the other to
accumulate the values of the time-weighted number of entities in the queue,
(ti − ti −1)NQi −1 . Recall that ti − Arrival Time is the amount of time that
entities, which gained access to the ATM, waited in queue. Both Cumulative
variables (ti − Arrival Time) and (ti − ti −1)NQi −1 are initialized to zero.
Next, an initial arrival event and termination event are scheduled and placed
under the Scheduled Future Events column. The listing of an event is
formatted as “(Entity Number, Event, and Event Time)”. Entity Number
denotes the customer number that the event pertains to (such as the first,
second, or third customer). Event is the type of event: a customer arrives, a
 Start
i=0
8 Harrell
2 Initialize variables and schedule initial arrival event and termination event (Scheduled Future Events). −Ghos
i=i+1 h−Bow
i=i+1 den:
i=i+1 • Update Event Calendar: Insert Scheduled Future Events in chronological order. Simula
• Advance Clock, ti, to the Time of the first event on the calendar and process the event. tion
Using
ProMo
del,
Schedule arrival event Arrive
Event type? Depart I.
for next customer entity S
to occur at time ti + E(3). End tu
Update statistics and generate output report. Any d
No Yes No y
Is ATM customers
Yes C
idle? in queue? h
End

4.
• Store current customer
• Schedule departureentity’s Arrival Time in last position of Entity
event for • Update Entity Attribute Array by • Update Entity Attribute Disc
Attribute Array to reflect customer joining the queue. deleting departed customer entity Array by deleting departed
current customer entity entering rete
• Add ATM
1 to NQ i, Number
to occur of Entities
at time in Queue.
ti + E(2.4). from first position in the array and customer entity from first −Ev
• Store current customer’s • Update Time-Weighted shifting waiting customers up. position of the array. ent
Arrival Time in first position of Number of Entities in Queue • Subtract 1 from NQi, Number of • Change ATM Statusi to Idle. Sim
Entity Attribute Array. statistic. Entities in Queue.
• Change ATM Statusi to Busy. - Compute value for • Schedule departure event for
• Update Entities Processed (ti – ti – 1)NQi – 1 and customer entity entering the ATM to
through Queue statistics to update Cumulative. occur at time ti + E(2.4).
reflect customer entering ATM. • Update Entities Processed
- Add 1 to Total Processed. through Queue statistics to reflect
- Record Time in Queue of 0 for customer entering ATM.
ti - Arrival Time and update - Add 1 to Total Processed.
Cumulative. - Compute Time in Queue
• Update Time-Weighted Number value for ti - Arrival Time and
of Entities in Queue statistic. update Cumulative.
- Record value of 0 for • Update Time-Weighted Number of
(ti – ti – 1)NQi – 1 and update Entities in Queue statistic. ©
Cumulative. - Compute value for (ti – ti – 1)NQi –1 The
and update Cumulative. McGr
aw−
Hill
Comp

FIGURE 4.5
Discrete-event simulation logic diagram for ATM system.
 Harrell

Number of Entities in Queue, NQi

TABLE 4.1 Manual Discrete-Event Simulation of ATM System −Ghos
h−Bow
Event Calendar Processed Event System State Statistical Accumulators Scheduled Future Events den:
Simula
Entity Attribute

Entity Number
Array (Entity Time-Weighted tion

ATM Statusi
Clock, ti

Event
Number, Arrival Entities Processed Number of Using

Time ti –
in ATM,
Time) through Queue Entities in Queue ProMo

position 1

Time)
(Entity Number, Event, Time)

Cumulative,

ti−1)NQi−1
(ti −Cumulative,
in Queue,
arraypositions

Event, Time)
del,

Using

Number,
(Entity
Total Processed

(ti − ti−1)NQi−1
(ti – Arrival
2, 3,———
Waiting
I.

Arrival
...
S

*Entity
Queue, array

Time
tu

Entities
d
y
i C
h
0 — 0 — — *( ) 0 Idle 0 — 0 — 0 (1, Arrive, 2.18)
( ) (_, End, 22.00)
1 (1, Arrive, 2.18) 2.18 1 Arrive *(1, 2.18) ↑ Busy 1 0 0 0 0 (2, Arrival, 7.91)
(_, End, 22.00) ( ) (1, Depart, 2.28)
4.
2 (1, Depart, 2.28) 2.28 1 Depart *( ) ↑ Idle — — 0 — 0
(2, Arrive, 7.91) ( ) No new events Disc
(_, End, 22.00) rete
3 (2, Arrive, 7.91) 7.91 2 Arrive *(2, 7.91) ↑ Busy 2 0 0 0 0 (3, Arrive, 15.00) −Ev
(_, End, 22.00) ( ) (2, Depart, 12.37) ent
4 (2, Depart, 12.37) 12.37 2 Depart *( ) ↑ Idle — — 0 — 0 Sim
(3, Arrive, 15.00) ( ) No new events
(_, End, 22.00)
5 (3, Arrive, 15.00) 15.00 3 Arrive *(3, 15.00) ↑ Busy 3 0 0 0 0 (4, Arrive, 15.17)
(_, End, 22.00) ( ) (3, Depart, 18.25)
6 (4, Arrive, 15.17) 15.17 4 Arrive *(3, 15.00) 1 ↑ — — 0 0 0 (5, Arrive, 15.74)
(3, Depart, 18.25) (4, 15.17)
(_, End, 22.00)
7 (5, Arrive, 15.74) 15.74 5 Arrive *(3, 15.00) 2 ↑ — — 0 0.57 0.57 (6, Arrive, 18.75)
(3, Depart, 18.25) (4, 15.17)
(_, End, 22.00) (5, 15.74)
8 (3, Depart, 18.25) 18.25 3 Depart *(4, 15.17) 1 ↑ 4 3.08 3.08 5.02 5.59 (4, Depart, 20.50)
(6, Arrive, 18.75) (5, 15.74)
(_, End, 22.00)
9 (6, Arrive, 18.75) 18.75 6 Arrive *(4, 15.17) 2 ↑ — — 3.08 0.50 6.09 (7, Arrive, 19.88)
(4, Depart, 20.50) (5, 15.74)
(_, End, 22.00) (6, 18.75)
10 (7, Arrive, 19.88) 19.88 7 Arrive *(4, 15.17) 3 ↑ — — 3.08 2.26 8.35 (8, Arrive, 22.53) ©
(4, Depart, 20.50) (5, 15.74) The
(_, End, 22.00) (6, 18.75) McGr
(7, 19.88)
aw−
11 (4, Depart, 20.50) 20.50 4 Depart *(5, 15.74) 2 ↑ 5 4.76 7.84 1.86 10.21 (5, Depart, 24.62)
(_, End, 22.00) (6, 18.75) Hill
(8, Arrive, 22.53) (7, 19.88) Comp
12 (_, End, 22.00) 22.00 End — ↑ ↑ 5 — 7.84 3.00 13.21 —
(8, Arrive, 22.53)
8 (5, Depart, 24.62)
3
Harrell−Ghosh−Bo I. Study 4. © The
wden: Simulation Chapters Discrete−Eve McGraw−Hill
Using ProModel, nt Companies,
Second Edition

84 Part I Study Chapters

customer departs, or the simulation ends. Time is the future time that the
event is to occur. The event “(1, Arrive, 2.18)” under the Scheduled Future
Events column prescribes that the first customer entity is scheduled to arrive
at time 2.18 minutes. The arrival time was generated using the equation
t0 + E (3.0). To obtain the value returned from the function E (3), we went
to Table 3.2, read the first random variate from the Interarrival Time column
(a value of 2.18 minutes), and added it to the current value of the simulation
clock, t0 = 0. The simulation is to be terminated after 22 minutes. Note the
“( , End, 22.00)” under the Scheduled Future Events column. For the
termination event, no value is assigned to Entity Number because it is not
relevant.
i = 1, t1 = 2.18. After the initialization step, the list of scheduled future
events is added to the event calendar in chronological order in preparation
for the next simulation time step i = 1. The simulation clock is fast
forwarded to the time that the next event is scheduled to occur, which is t1
= 2.18
(the arrival time of the first customer to the ATM queue), and then the event
is processed. Following the simulation logic diagram, arrival events are
processed by first scheduling the future arrival event for the next customer
entity using the equation t1 + E (3.0) = 2.18 + 5.73 = 7.91 minutes.
Note the value of 5.73 returned by the function E (3.0) is the second
random variate listed under the Interarrival Time column of Table 3.2. This
future event is placed under the Scheduled Future Events column in Table
4.1 as “(2, Arrive, 7.91)”. Checking the status of the ATM from the
previous simulation time step reveals that the ATM is idle (ATM Status0 =
“Idle”). Therefore, the arriving customer entity immediately flows through
the queue to the ATM to conduct its transaction. The future departure event
of this entity from the ATM is scheduled using the equation t1 + E (2.4) =
2.18 + 0.10 = 2.28 minutes. See “(1, Depart, 2.28)” under the Scheduled
Future Events column, denoting that the first customer entity is scheduled to
depart the ATM at time 2.28 minutes. Note that the value of 0.10 returned
by the function E (2.4) is the first random variate listed under the Service
Time column of Table 3.2. The arriving customer entity’s arrival time is
then stored in the first position of the Entity Attribute Array to signify that
it is being served by the ATM. The ATM Status1 is set to “Busy,” and the
statistical accumulators for Entities Processed through Queue are updated.
Add 1 to Total Processed and since this entity entered the queue and
immediately advanced to the idle ATM for processing, record zero minutes
in the Time in Queue, t1 − Arrival Time, subcolumn and update this
statistic’s cumulative value. The statistical accumulators for Time-Weighted
Number of Entities in the Queue are updated next. Record zero for
(t1 − t0)NQ0 since there were no entities in queue during the previous
time step, NQ0 = 0, and update this statistic’s cumulative value. Note the
arrow “↑” entered under the Number of Entities in Queue, NQ1 column.
Recall that the arrow is placed there to signify that the number of entities
waiting
in the queue has not changed from its previous value.
Chapter 4 Discrete-Event Simulation 85

i = 2, t2 = 2.28. Following the loop back around to the top of the

simulation logic diagram, we place the two new future events onto the
event calendar in chronological order in preparation for the next simulation
time step
i = 2. The simulation clock is fast forwarded to t2 = 2.28, and the
departure event for the first customer entity arriving to the system is
processed. Given that there are no customers in the queue from the previous
time step, NQ1 = 0 (follow the arrows up to get this value), we simply
remove the departed customer from the first position of the Entity Attribute
Array and change the status of the ATM to idle, ATM Status2 = “Idle”.
The statistical accumulators do not require updating because there are no
customer entities waiting in the queue or leaving the queue. The dashes (—)
entered under the statistical accumulator columns indicate that updates are
not required. No new future events are scheduled.
As before, we follow the loop back to the top of the simulation logic
diagram, and place any new events, of which there are none at the end of time
step i = 2, onto the event calendar in chronological order in preparation for the
next simula- tion time step i = 3. The simulation clock is fast forwarded to t3 =
7.91, and the arrival of the second customer entity to the ATM queue is
processed. Complete the processing of this event and continue the manual
simulation until the termination event “( , End, 22.00)” reaches the top of the
event calendar.
As you work through the simulation logic diagram to complete the manual
simulation, you will see that the fourth customer arriving to the system requires
that you use logic from a different path in the diagram. When the fourth
customer entity arrives to the ATM queue, simulation time step i = 6, the
ATM is busy (see ATM Status5) processing customer entity 3’s transaction.
Therefore, the fourth customer entity joins the queue and waits to use the
ATM. (Don’t forget that it invoked the creation of the fifth customer’s arrival
event.) The fourth en- tity’s arrival time of 15.17 minutes is stored in the last
position of the Entity At- tribute Array in keeping with the first-in, first-out
(FIFO) rule. The Number of Entities in Queue, NQ6 , is incremented to 1.
Further, the Time-Weighted Number of Entities in the Queue statistical
accumulators are updated by first computing (t6 − t5)NQ5 = (15.17 − 15.00)0
= 0 and then recording the result. Next, this statistic’s cumulative value is
updated. Customers 5, 6, and 7 also arrive to the system finding the ATM busy
and therefore take their place in the queue to wait for the ATM.
The fourth customer waited a total of 3.08 minutes in the queue (see the
ti − Arrival Time subcolumn) before it gained access to the ATM in time step
i = 8 as the third customer departed. The value of 3.08 minutes in the queue
for the fourth customer computed in time step i = 8 by t8 − Arrival
Time =
18.25 − 15.17 = 3.08 minutes. Note that Arrival Time is the time that the
fourth customer arrived to the queue, and that the value is stored in the Entity
Attribute Array.
At time t12 = 22.00 minutes the simulation terminates and tallies the
final values for the statistical accumulators, indicating that a total of five
customer
entities were processed through the queue. The total amount of time that these five
86 Part I Study Chapters

customers waited in the queue is 7.84 minutes. The final cumulative value for
Time-Weighted Number of Entities in the Queue is 13.21 minutes. Note that at
the end of the simulation, two customers are in the queue (customers 6 and 7)
and one is at the ATM (customer 5). A few quick observations are worth
considering before we discuss how the accumulated values are used to calculate
summary sta- tistics for a simulation output report.
This simple and brief (while tedious) manual simulation is relatively easy to
follow. But imagine a system with dozens of processes and dozens of factors in-
fluencing behavior such as downtimes, mixed routings, resource contention, and
others. You can see how essential computers are for performing a simulation of
any magnitude. Computers have no difficulty tracking the many relationships
and updating the numerous statistics that are present in most simulations.
Equally as important, computers are not error prone and can perform millions of
instructions per second with absolute accuracy. We also want to point out that
the simulation logic diagram (Figure 4.5) and Table 4.1 were designed to
convey the essence of what happens inside a discrete-event simulation program.
When you view a trace report of a ProModel simulation in Lab Chapter 8 you
will see the simularities between the trace report and Table 4.1. Although the
basic process presented is sound, its efficiency could be improved. For
example, there is no need to keep both a “scheduled future events” list and
an “event calendar.” Instead, future events are inserted directly onto the event
calendar as they are created. We sepa- rated them to facilitate our describing the
flow of information in the discrete-event framework.

4.4.4 Calculating Results

When a simulation terminates, statistics that summarize the model’s behavior are
calculated and displayed in an output report. Many of the statistics reported in
a simulation output report consist of average values, although most software
reports a multitude of statistics including the maximum and minimum values
observed during the simulation. Average values may be either simple
averages or time averages.

Simple-Average Statistic
A simple-average statistic is calculated by dividing the sum of all observation
val- ues of a response variable by the number of observations:
in=1
Simple average = xi n

where n is the number of observations and xi is the value of ith observation.

Exam- ple simple-average statistics include the average time entities spent in the
system (from system entry to system exit), the average time entities spent at a
specific location, or the average time per use for a resource. An average of an
observation- based response variable in ProModel is computed as a simple
average.
Chapter 4 Discrete-Event Simulation 87

The average time that customer entities waited in the queue for their turn on
the ATM during the manual simulation reported in Table 4.1 is a simple-average
statistic. Recall that the simulation processed five customers through the queue.
Let xi denote the amount of time that the i th customer processed spent in the
queue. The average waiting time in queue based on the n = 5 observations is

Average time in queue

= i =1 0 + 0 + 0 + 3.08 + 4.76
5
xi =
5 5
7.84 minutes
= = 1.57 minutes
5
The values necessary for computing this average are accumulated under the
Entities Processed through Queue columns of the manual simulation table (see
the last row of Table 4.1 for the cumulative value (ti − Arrival Time) = 7.84
and Total Processed = 5).

Time-Average Statistic
A time-average statistic, sometimes called a time-weighted average, reports
the average value of a response variable weighted by the time duration for
each observed value of the variable:
n (T x )
i i
i
Time average = =1

where xi denotes the value of the i th observation, Ti denotes the time duration of
the i th observation (the weighting factor), and T denotes the total duration
over which the observations were collected. Example time-average statistics
include the average number of entities in a system, the average number of
entities at a lo- cation, and the average utilization of a resource. An average of
a time-weighted response variable in ProModel is computed as a time average.
The average number of customer entities waiting in the queue location for
their turn on the ATM during the manual simulation is a time-average statistic.
Figure 4.6 is a plot of the number of customer entities in the queue during the
manual simulation recorded in Table 4.1. The 12 discrete-events manually simu-
lated in Table 4.1 are labeled t1, t2, t 3 ,..., t11, t12 on the plot. Recall that ti de-
notes the value of the simulation clock at time step i in Table 4.1, and that its ini-
tial value is zero, t0 = 0.
Using the notation from the time-average equation just given, the total
simu- lation time illustrated in Figure 4.6 is T = 22 minutes. The Ti denotes
the dura- tion of time step i (distance between adjacent discrete-events in Figure
4.6). That is, Ti = ti − ti −1 for i = 1, 2, 3, . . . , 12. The xi denotes the
queue’s contents (number of customer entities in the queue) during each Ti
time interval. There- fore, xi = NQi −1 for i = 1, 2, 3, . . . , 12 (recall that in
Table 4.1, NQi −1 denotes the number of customer entities in the queue
from ti −1 to ti ). The time-average
8 Harrell
8 −Ghos
h−Bow
den:
Simula
tion
Using
ProMo
del,
Number of customers in queue

I.
S
tu
4 d
y
C
h
3

4.
2 Disc
rete
−Ev
ent
1 Sim

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

T1 =
T3 = 7.91 - 2.28 = 5.63 T4 = 12.37 - 7.91 = 4.46 T5 = 2.63 T8 = 2.51 …
2.18

T6 = 0.17 T7 = 0.57 T12 = 1.50

T2 = 0.1

t0 t1 t2 t3 t4 t5 t6 t7 t8 t11 t12 ©
The
Simulation time, T = 22 McGr
aw−
Hill
FIGURE 4.6 Comp
Number of customers in the queue during the manual simulation.
 Chapter 4 Discrete-Event Simulation 89

number of customer entities in the queue (let’s call it Average NQ) is

Average NQ = 12 12
(Ti (ti − −1)NQi −1
xi ) ti
i =1 i
T = =1
T
(2.18)(0) + (0.1)(0) + (5.63)(0) + (4.46)(0) + (2.63)(0) + (0.17)(0) + (0.57)(1) + (2.51)(2) + ·· · +
Average NQ =
(1.5)(2)
22
13.21
Average NQ = 0.60 customers
22 12
=
You may recognize that the numerator of this equation ( (ti −1 )NQ )
ti
i =1 − i −1
calculates the area under the plot of the queue’s contents during the simulation
(Figure 4.6). The values necessary for computing this area are accumulated
under the Time-Weighted Number of Entities in Queue column of Table 4.1
(see the Cumulative value of 13.21 in the table’s last row).

4.4.5 Issues
Even though this example is a simple and somewhat crude simulation, it
provides a good illustration of basic simulation issues that need to be addressed
when con- ducting a simulation study. First, note that the simulation start-up
conditions can bias the output statistics. Since the system started out empty,
queue content statis- tics are slightly less than what they might be if we
began the simulation with customers already in the system. Second, note that
we ran the simulation for only 22 minutes before calculating the results. Had we
ran longer, it is very likely that the long-run average time in the queue would
have been somewhat different (most likely greater) than the time from the
short run because the simulation did not have a chance to reach a steady state.
These are the kinds of issues that should be addressed whenever running a
simulation. The modeler must carefully analyze the output and understand the
sig- nificance of the results that are given. This example also points to the
need for considering beforehand just how long a simulation should be run.
These issues are addressed in Chapters 9 and 10.

4.5 Commercial Simulation Software

While a simulation model may be programmed using any development language
such as C++ or Java, most models are built using commercial simulation
software such as ProModel. Commercial simulation software consists of
several modules for performing different functions during simulation modeling.
Typical modules are shown in Figure 4.7.

4.5.1 Modeling Interface Module

A modeler defines a model using an input or modeling interface module. This
module provides graphical tools, dialogs, and other text editing capabilities for
90 Part I Study Chapters

FIGURE 4.7
Typical components
of simulation
software.

Modeling Simulation Output

interface interface interface

Modeling Model Simulation Output Output

processor data data data processor

Simulation Simulation
processor processor

entering and editing model information. External files used in the simulation are
specified here as well as run-time options (number of replications and so on).

4.5.2 Model Processor

When a completed model is run, the model processor takes the model database,
and any other external data files that are used as input data, and creates a simula-
tion database. This involves data translation and possibly language compilation.
This data conversion is performed because the model database and external files
are generally in a format that cannot be used efficiently by the simulation
proces- sor during the simulation. Some simulation languages are interpretive,
meaning that the simulation works with the input data the way they were
entered. This al- lows simulations to start running immediately without going
through a translator, but it slows down the speed at which the simulation
executes.
In addition to translating the model input data, other data elements are
created for use during simulation, including statistical counters and state
variables. Statis- tical counters are used to log statistical information during the
simulation such as the cumulative number of entries into the system or the
cumulative activity time at a workstation.

4.5.3 Simulation Interface Module

The simulation interface module displays the animation that occurs during the
simulation run. It also permits the user to interact with the simulation to control
the current animation speed, trace events, debug logic, query state variables,
Chapter 4 Discrete-Event Simulation 91

request snapshot reports, pan or zoom the layout, and so forth. If visual
interactive capability is provided, the user is even permitted to make changes
dynamically to model variables with immediate visual feedback of the effects of
such changes.
The animation speed can be adjusted and animation can even be disabled by
the user during the simulation. When unconstrained, a simulation is capable of
running as fast as the computer can process all of the events that occur within
the simulated time. The simulation clock advances instantly to each scheduled
event; the only central processing unit (CPU) time of the computer that is used is
what is necessary for processing the event logic. This is how simulation is able
to run in compressed time. It is also the reason why large models with millions
of events take so long to simulate. Ironically, in real life activities take time
while events take no time. In simulation, events take time while activities take
no time. To slow down a simulation, delay loops or system timers are used to
create pauses between events. These techniques give the appearance of elapsing
time in an animation. In some applications, it may even be desirable to run a
simulation at the same rate as a real clock. These real-time simulations are
achieved by synchronizing the simu- lation clock with the computer’s internal
system clock. Human-in-the-loop (such as operator training simulators) and
hardware-in-the-loop (testing of new equip- ment and control systems) are
examples of real-time simulations.

4.5.4 Simulation Processor

The simulation processor processes the simulated events and updates the statisti-
cal accumulators and state variables. A typical simulation processor consists of
the following basic components:
• Clock variable—a variable used to keep track of the elapsed time during
the simulation.
• Event calendar—a list of scheduled events arranged chronologically
according to the time at which they are to occur.
• Event dispatch manager—the internal logic used to update the clock and
manage the execution of events as they occur.
• Event logic—algorithms that describe the logic to be executed and
statistics to be gathered when an event occurs.
• Waiting lists—one or more lists (arrays) containing events waiting for a
resource or other condition to be satisfied before continuing processing.
• Random number generator—an algorithm for generating one or more
streams of pseudo-random numbers between 0 and 1.
• Random variate generators—routines for generating random variates
from specified probability distributions.

4.5.5 Animation Processor

The animation processor interacts with the simulation database to update
the graphical data to correspond to the changing state data. Animation is
usually
92 Part I Study Chapters

displayed during the simulation itself, although some simulation products create
an animation file that can be played back at the end of the simulation. In addition
to animated figures, dynamic graphs and history plots can be displayed during
the simulation.
Animation and dynamically updated displays and graphs provide a visual
rep- resentation of what is happening in the model while the simulation is
running. Animation comes in varying degrees of realism from three-dimensional
animation to simple animated flowcharts. Often, the only output from the
simulation that is of interest is what is displayed in the animation. This is
particularly true when simula- tion is used for facilitating conceptualization or
for communication purposes.
A lot can be learned about model behavior by watching the animation (a
pic- ture is worth a thousand words, and an animation is worth a thousand
pictures). Animation can be as simple as circles moving from box to box, to
detailed, real- istic graphical representations. The strategic use of graphics
should be planned in advance to make the best use of them. While insufficient
animation can weaken the message, excessive use of graphics can distract
from the central point to be made. It is always good to dress up the simulation
graphics for the final presenta- tion; however, such embellishments should be
deferred at least until after the model has been debugged.
For most simulations where statistical analysis is required, animation is no
substitute for the postsimulation summary, which gives a quantitative overview
of the entire system performance. Basing decisions on the animation alone
reflects shallow thinking and can even result in unwarranted conclusions.

4.5.6 Output Processor

The output processor summarizes the statistical data collected during the simula-
tion run and creates an output database. Statistics are reported on such perfor-
mance measures as
• Resource utilization.
• Queue sizes.
• Waiting times.
• Processing rates.
In addition to standard output reporting, most simulation software provides the
ability to write user-specified data out to external files.

4.5.7 Output Interface Module

The output interface module provides a user interface for displaying the output
results from the simulation. Output results may be displayed in the form of
reports or charts (bar charts, pie charts, or the like). Output data analysis
capabilities such as correlation analysis and confidence interval calculations
also are often pro- vided. Some simulation products even point out potential
problem areas such as bottlenecks.
 Chapter 4 Discrete-Event Simulation 93

4.6 Simulation Using ProModel

ProModel is a powerful, yet easy-to-use, commercial simulation package that is
designed to effectively model any discrete-event processing system. It also has
continuous modeling capabilities for modeling flow in and out of tanks and other
vessels. The online tutorial in ProModel describes the building, running, and
output analysis of simulation models. A brief overview of how ProModel works
is presented here. The labs in this book provide a more detailed, hands-on
approach for actually building and running simulations using ProModel.

4.6.1 Building a Model

A model is defined in ProModel using simple graphical tools, data entry tables,
and fill-in-the-blank dialog boxes. In ProModel, a model consists of entities (the
items being processed), locations (the places where processing occurs),
resources (agents used to process and move entities), and paths (aisles and
pathways along which entities and resources traverse). Dialogs are associated
with each of these modeling elements for defining operational behavior such as
entity arrivals and processing logic. Schedules, downtimes, and other attributes
can also be defined for entities, resources, and locations.
Most of the system elements are defined graphically in ProModel (see
Figure 4.8). A graphic representing a location, for example, is placed on the
layout to create a new location in the model (see Figure 4.9). Information
about this location can then be entered such as its name, capacity, and so on.
Default values are provided to help simplify this process. Defining objects
graphically provides a highly intuitive and visual approach to model building.
The use of graphics is optional, and a model can even be defined without using
any graphics. In addition to graphic objects provided by the modeling software,
import capability is avail- able to bring in graphics from other packages. This
includes complete facility layouts created using CAD software such as
AutoCAD.

4.6.2 Running the Simulation

When running a model created in ProModel, the model database is translated or
compiled to create the simulation database. The animation in ProModel is
displayed concurrently with the simulation. Animation graphics are classified as
either static or dynamic. Static graphics include walls, aisles, machines, screen
text, and others. Static graphics provide the background against which the
animation

FIGURE 4.8
Sample of ProModel
graphic objects.
94 Part I Study Chapters

FIGURE 4.9
ProModel animation provides useful feedback.

takes place. This background might be a CAD layout imported into the model.
The dynamic animation objects that move around on the background during the
simu- lation include entities (parts, customers, and so on) and resources
(people, fork trucks, and so forth). Animation also includes dynamically
updated counters, indicators, gauges, and graphs that display count, status, and
statistical information (see Figure 4.9).

4.6.3 Output Analysis

The output processor in ProModel provides both summary and detailed statistics
on key performance measures. Simulation results are presented in the form of
re- ports, plots, histograms, pie charts, and others. Output data analysis
capabilities such as confidence interval estimation are provided for more
precise analysis. Outputs from multiple replications and multiple scenarios
can also be summa- rized and compared. Averaging performance across
replications and showing multiple scenario output side-by-side make the results
much easier to interpret.
Summary Reports
Summary reports show totals, averages, and other overall values of interest.
Figure 4.10 shows an output report summary generated from a ProModel
simula- tion run.
 Chapter 4 Discrete-Event Simulation 95

FIGURE 4.10
Summary report of simulation activity.
--------------------------------------------------------------------------------
General Report
Output from C:\ProMod4\models\demos\Mfg_cost.mod [Manufacturing Costing Optimization]
Date: Feb/27/2003 Time: 06:50:05 PM
--------------------------------------------------------------------------------
Scenario : Model Parameters
Replication : 1 of 1
Warmup Time : 5 hr
Simulation Time : 15 hr
--------------------------------------------------------------------------------

LOCATIONS

Average
Location Scheduled Total Minutes Average Maximum Current
Name Hours Capacity Entries Per Entry Contents Contents Contents
----------- --------- -------- ------- --------- -------- -------- --------
Receive 10 2 21 57.1428 2 2 2
NC Lathe 1 10 1 57 10.1164 0.961065 1 1
NC Lathe 2 10 1 57 9.8918 0.939725 1 1
Degrease 10 2 114 10.1889 1.9359 2 2
Inspect 10 1 113 4.6900 0.883293 1 1
Bearing Que 10 100 90 34.5174 5.17762 13 11
Loc1 10 5 117 25.6410 5 5 5

RESOURCES

Average Average Average

Number Minutes Minutes Minutes
Resource Scheduled Of Times Per Travel Travel % Blocked
Name Units Hours Used Usage To Use To Park In Travel % Util
-------- ----- --------- -------- -------- -------- -------- --------- ------
CellOp.1 1 10 122 2.7376 0.1038 0.0000 0.00 57.76
CellOp.2 1 10 118 2.7265 0.1062 0.0000 0.00 55.71
CellOp.3 1 10 115 2.5416 0.1020 0.0000 0.00 50.67
CellOp 3 30 355 2.6704 0.1040 0.0000 0.00 54.71

ENTITY ACTIVITY

Average Average Average Average Average

Current Minutes Minutes Minutes Minutes Minutes
Entity Total Quantity In Moving Wait for In Blocked
Name Exits In System System Res, etc. Operation
------- ----- --------- --------- -------- --------- --------- ---------
Pallet 19 2 63.1657 0.0000 31.6055 1.0000 30.5602
Blank 0 7 - - - - -
Cog 79 3 52.5925 0.8492 3.2269 33.5332 14.9831
Reject 33 0 49.5600 0.8536 2.4885 33.0656 13.1522
Bearing 78 12 42.1855 0.0500 35.5899 0.0000 6.5455
96 Part I Study Chapters

FIGURE 4.11
Time-series graph
showing changes in
queue size over time.

FIGURE 4.12
Histogram of queue
contents.
 Chapter 4 Discrete-Event Simulation 97

Time Series Plots and Histograms

Sometimes a summary report is too general to capture the information being
sought. Fluctuations in model behavior over time can be viewed using a time
series report. In ProModel, time series output data are displayed graphically so
that patterns can be identified easily. Time series plots can show how inventory
levels fluctuate throughout the simulation or how changes in workload affect re-
source utilization. Figure 4.11 is a time series graph showing how the length of a
queue fluctuates over time.
Once collected, time series data can be grouped in different ways to show
pat- terns or trends. One common way of showing patterns is using a
histogram. The histogram in Figure 4.12 breaks down contents in a queue to
show the percentage of time different quantities were in that queue.
As depicted in Figure 4.12, over 95 percent of the time, there were fewer
than 12 items in the queue. This is more meaningful than simply knowing
what the average length of the queue was.

4.7 Languages versus Simulators

A distinction is frequently made between simulation languages and simulators.
Simulation languages are often considered more general purpose and have fewer
predefined constructs for modeling specific types of systems. Simulators, on the
other hand, are designed to handle specific problems—for example, a job shop
sim- ulator or a clinic simulator. The first simulators that appeared provided
little, if any, programming capability, just as the first simulation languages
provided few, if any, special modeling constructs to facilitate modeling.
Consequently, simulators ac- quired the reputation of being easy to use but
inflexible, while simulation languages were branded as being very flexible but
difficult to use (see Figure 4.13).
Over time, the distinction between simulation languages and simulators has
become blurred as specialized modeling constructs have been added to general-
purpose simulation languages, making them easier to use. During the same
period, general programming extensions have been added to simulators,
making them more flexible. The most popular simulation tools today combine
powerful industry- specific constructs with flexible programming capabilities, all
accessible from an intuitive graphical user interface (Bowden 1998). Some
tools are even config- urable, allowing the software to be adapted to specific
applications yet still retain- ing programming capability. Rather than put
languages and simulators on opposite ends of the same spectrum as though
flexibility and ease of use were mutually ex- clusive, it is more appropriate to
measure the flexibility and ease of use for all simulation software along two
separate axes (Figure 4.14).

FIGURE 4.13 Simulators Languages

Old paradigm that
polarized ease of
use and flexibility. Ease of use Flexibility
98 Part I Study Chapters

FIGURE 4.14

Easy
New paradigm that
views ease of use Early Current best-of-breed
and flexibility as Ease of use simulators products
independent
characteristics.

Early
languages
Hard

Low High
Flexibility

4.8 Future of Simulation

Simulation products have evolved to provide more than simply stand-alone
simu- lation capability. Modern simulation products have open architectures
based on component technology and standard data access methods (like SQL)
to provide interfacing capability with other applications such as CAD programs
and enter- prise planning tools. Surveys reported annually in Industrial
Engineering Solu- tions show that most simulation products have the following
features:
• Input data analysis for distribution fitting.
• Point-and-click graphical user interface.
• Reusable components and templates.
• Two- (2-D) and three-dimensional (3-D) animation.
• Online help and tutorials.
• Interactive debugging.
• Automatic model generation.
• Output analysis tools.
• Optimization.
• Open architecture and database connectivity.
Simulation is a technology that will continue to evolve as related technolo-
gies improve and more time is devoted to the development of the software.
Prod- ucts will become easier to use with more intelligence being incorporated
into the software itself. Evidence of this trend can already be seen by
optimization and other time-saving utilities that are appearing in simulation
products. Animation and other graphical visualization techniques will continue
to play an important role in simulation. As 3-D and other graphic technologies
advance, these features will also be incorporated into simulation products.
 Chapter 4 Discrete-Event Simulation 99

Simulation products targeted at vertical markets are on the rise. This trend is
driven by efforts to make simulation easier to use and more solution oriented.
Specific areas where dedicated simulators have been developed include call cen-
ter management, supply chain management, and high-speed processing. At the
same time many simulation applications are becoming more narrowly focused,
others are becoming more global and look at the entire enterprise or value chain
in a hierarchical fashion from top to bottom.
Perhaps the most dramatic change in simulation will be in the area of soft-
ware interoperability and technology integration. Historically, simulation has
been viewed as a stand-alone, project-based technology. Simulation models were
built to support an analysis project, to predict the performance of complex
systems, and to select the best alternative from a few well-defined alternatives.
Typically these projects were time-consuming and expensive, and relied heavily
on the expertise of a simulation analyst or consultant. The models produced
were generally “single use” models that were discarded after the project.
In recent years, the simulation industry has seen increasing interest in ex-
tending the useful life of simulation models by using them on an ongoing basis
(Harrell and Hicks 1998). Front-end spreadsheets and push-button user
interfaces are making such models more accessible to decision makers. In these
flexible sim- ulation models, controlled changes can be made to models
throughout the system life cycle. This trend is growing to include dynamic links
to databases and other data sources, enabling entire models actually to be built
and run in the background using data already available from other enterprise
applications.
The trend to integrate simulation as an embedded component in enterprise
applications is part of a larger development of software components that can be
distributed over the Internet. This movement is being fueled by three emerging
information technologies: (1) component technology that delivers true object
orientation; (2) the Internet or World Wide Web, which connects business com-
munities and industries; and (3) Web service technologies such as JZEE and
Microsoft’s .NET (“DOTNET”). These technologies promise to enable parallel
and distributed model execution and provide a mechanism for maintaining dis-
tributed model repositories that can be shared by many modelers (Fishwick
1997). The interest in Web-based simulation, like all other Web-based
applications, con- tinues to grow.

4.9 Summary
Most manufacturing and service systems are modeled using dynamic, stochastic,
discrete-event simulation. Discrete-event simulation works by converting all ac-
tivities to events and consequent reactions. Events are either time-triggered or
condition-triggered, and are therefore processed either chronologically or when
a satisfying condition has been met.
Simulation models are generally defined using commercial simulation soft-
ware that provides convenient modeling constructs and analysis tools.
Simulation
100 Part I Study Chapters

software consists of several modules with which the user interacts. Internally,
model data are converted to simulation data, which are processed during the
simulation. At the end of the simulation, statistics are summarized in an output
database that can be tabulated or graphed in various forms. The future of simula-
tion is promising and will continue to incorporate exciting new technologies.

4.10 Review Questions

1. Give an example of a discrete-change state variable and a continuous-
change state variable.
2. In simulation, the completion of an activity time that is random must be
known at the start of the activity. Why is this necessary?
3. Give an example of an activity whose completion is a scheduled event
and one whose completion is a conditional event.
4. For the first 10 customers processed completely through the ATM
spreadsheet simulation presented in Table 3.2 of Chapter 3, construct a
table similar to Table 4.1 as you carry out a manual discrete-event
simulation of the ATM system to
a. Compute the average amount of time the first 10 customers spent in
the system. Hint: Add time in system and corresponding
cumulative columns to the table.
b. Compute the average amount of time the first 10 customers spent in
the queue.
c. Plot the number of customers in the queue over the course of the
simulation and compute the average number of customers in the
queue for the simulation.
d. Compute the utilization of the ATM. Hint: Define a utilization
variable that is equal to zero when the ATM is idle and is equal to 1
when the ATM is busy. At the end of the simulation, compute a time-
weighted average of the utilization variable.
5. Identify whether each of the following output statistics would be
computed as a simple or as a time-weighted average value.
a. Average utilization of a resource.
b. Average time entities spend in a queue.
c. Average time entities spend waiting for a resource.
d. Average number of entities waiting for a particular resource.
e. Average repair time for a machine.
6. Give an example of a situation where a time series graph would be
more useful than just seeing an average value.
7. In real life, activities take time and events take no time. During a
simulation, activities take no time and events take all of the time.
Explain this paradox.
 Chapter 4 Discrete-Event Simulation 101

8. What are the main components of simulation software?

9. Look up a simulation product on the Internet or in a trade journal and
describe two promotional features of the product being advertised.
10. For each of the following simulation applications identify one discrete-
and one continuous-change state variable.
a. Inventory control of an oil storage and pumping facility.
b. Study of beverage production in a soft drink production facility.
c. Study of congestion in a busy traffic intersection.

Reference
s Bowden, Royce. “The Spectrum of Simulation Software.” IIE Solutions, May 1998,
pp. 44–46.
Fishwick, Paul A. “Web-Based Simulation.” In Proceedings of the 1997 Winter
Simulation Conference, ed. S. Andradottir, K. J. Healy, D. H. Withers, and B. L.
Nelson. Institute of Electric and Electronics Engineers, Piscataway, NJ, 1997. pp.
100–109.
Gottfried, Byron S. Elements of Stochastic Process Simulation. Englewood Cliffs, NJ:
Prentice Hall, 1984, p. 8.
Haider, S. W., and J. Banks. “Simulation Software Products for Analyzing Manufacturing
Systems.” Industrial Engineering, July 1986, p. 98.
Harrell, Charles R., and Don Hicks. “Simulation Software Component Architecture for
Simulation-Based Enterprise Applications.” Proceedings of the 1998 Winter Simula-
tion Conference, ed. D. J. Medeiros, E. F. Watson, J. S. Carson, and M. S.
Manivannan. Institute of Electrical and Electronics Engineers, Piscataway, New
Jersey, 1998, pp. 1717–21.
Harrell−Ghosh−Bo I. Study 5. Getting © The
wden: Simulation Chapters Started McGraw−Hill
Using ProModel, Companies,
Second Edition

C H A P T E R

5 GETTING STARTED

“For which of you, intending to build a tower, sitteth not down first, and
counteth the cost, whether he have sufficient to finish it? Lest haply, after he
hath laid the foundation, and is not able to finish it, all that behold it begin to
mock him, Saying, This man began to build, and was not able to finish.”
—Luke 14:28–30

5.1 Introduction
In this chapter we look at how to begin a simulation project. Specifically, we
discuss how to select a project and set up a plan for successfully completing it.
Simulation is not something you do simply because you have a tool and a
process to which it can be applied. Nor should you begin a simulation without
forethought and preparation. A simulation project should be carefully planned
following basic project management principles and practices. Questions to be
answered in this chapter are
• How do you prepare to do a simulation study?
• What are the steps for doing a simulation study?
• What are typical objectives for a simulation study?
• What is required to successfully complete a simulation project?
• What are some pitfalls to avoid when doing simulation?
While specific tasks may vary from project to project, the basic procedure
for doing simulation is essentially the same. Much as in building a house, you
are better off following a time-proven methodology than approaching it
haphazardly. In this chapter, we present the preliminary activities for preparing
to conduct a simulation study. We then cover the steps for successfully
completing a simulation project. Subsequent chapters elaborate on these steps.
Here we focus primarily

103
104 Part I Study Chapters

on the first step: defining the objective, scope, and requirements of the study.
Poor planning, ill-defined objectives, unrealistic expectations, and unanticipated
costs can turn a simulation project sour. For a simulation project to succeed, the
objec- tives and scope should be clearly defined and requirements identified and
quantified for conducting the project.

5.2 Preliminary Activities

Simulation is not a tool to be applied indiscriminately with little or no fore-
thought. The decision to use simulation itself requires some consideration. Is the
application appropriate for simulation? Are other approaches equally as effective
yet less expensive? These and other questions should be raised when exploring
the potential use of simulation. Once it has been determined that simulation is
the right approach, other preparations should be made to ensure that the
necessary personnel and resources are in place to conduct the study. Personnel
must be iden- tified and trained. The right software should also be carefully
selected. The nature of the study and the policies of the organization will largely
dictate how to prepare for a simulation project.

5.2.1 Selecting an Application

The decision to use simulation usually begins with a systemic problem for which
a solution is being sought. The problem might be as simple as getting better
utilization from a key resource or as complex as how to increase throughput
while at the same time reducing cycle time in a large factory. Such problems
become opportunities for system improvement through the use of simulation.
While many opportunities may exist for using simulation, beginners in
simu- lation should select an application that is not too complicated yet can have
an im- pact on an organization’s bottom line. On the one hand, you want to
focus on problems of significance, but you don’t want to get in over your
head. The first simulation project should be one that is well defined and can be
completed within a few weeks. This pilot project might consist of a small
process such as a manu- facturing cell or a service operation with only a few
process steps. The goal at this point should be focused more on gaining
experience in simulation than making dramatic, enterprisewide improvements.
Conducting a pilot project is much like a warm-up exercise. It should be treated
as a learning experience as well as a confi- dence and momentum builder.
As one gains experience in the use of simulation, more challenging projects
can be undertaken. As each project is considered, it should be evaluated first for
its suitability for simulation. The following questions can help you determine
whether a process is a good candidate for simulation:
• Is the process well defined?
• Is process information readily available?
 Chapter 5 Getting Started 105

• Does the process have interdependencies?

• Does the process exhibit variability?
• Are the potential cost savings greater than the cost of doing the study?
• If it is a new process, is there time to perform a simulation analysis?
• If it is an existing process, would it be less costly to experiment on the
actual system?
• Is management willing to support the project?
The wisdom of asking these questions should be clear. You don’t want to
waste time on efforts or problems that are too unstructured or for which
simulation is not well suited. The last question, which relates to management
support, is a reminder that no simulation project should be undertaken if
management is un- willing to support the study or take the recommendations of
the study seriously. Obviously, multiple projects may fit the criteria just listed, in
which case the list of candidates for simulation should be prioritized using a
cost–benefit analysis (a.k.a. biggest-bang-for-the-buck analysis). Management
preferences and timing may also come into play in prioritization.

5.2.2 Personnel Identification

One of the first preparations for a simulation project is to have management
assign a project leader who works alone or with a project team. When assessing
personnel requirements for the simulation, consideration should be given to
factors such as level of expertise, length of the assignment, and organizational
structure. Large companies, for example, often have a central simulation group
that provides sim- ulation services to entities within the organization. In some
organizations, simulation is used no more than once or twice a year, such as
when a major change in opera- tion is being considered. In such situations, it
may be more cost-effective to hire a simulation consultant than to do the
simulation in-house. While the decision to use a consultant is usually based on
the level and availability of in-house simulation expertise as well as the difficulty
of the project, the opportunity to train additional people or acquire increased
simulation expertise to apply to future projects should not be overlooked.
Assuming the simulation will be done internally, either a simulation special-
ist should be assigned to lead the project or an engineer or manager who works
closely with the specialist should be assigned. The person or group doing the
modeling should be well trained and proficient in the use of one or more simula-
tion packages. If no such experienced individual exists, management must be
willing to invest in employee training in simulation.
The process owner should take an active role in the project and, if possible,
even lead the effort. If the process owner refuses or doesn’t have time to get
involved in the simulation project, the effort will be largely wasted. It is impera-
tive to have someone involved who not only understands the process and
what possible design options are feasible, but who also has responsibility
for the system’s performance.
106 Part I Study Chapters

5.2.3 Software Selection

Once the responsibility for doing simulation has been assigned, software tools, if
not already in possession, need to be acquired to develop the simulation model.
Having the right tool for the job can mean the difference between success and
fail- ure in a simulation project. Modeling efforts sometimes go on for months
without much progress because of limited capabilities in the software.
Simulation soft- ware can’t make a simulation succeed, but it can make it fail.
Selecting the right simulation software requires that an assessment first be
made of the simulation requirements. Then alternative products should be evalu-
ated against those requirements. If simulation is to be used in multiple applica-
tions that are quite diverse, it may be desirable to have more than one simulation
product so that the right tool is used for the right job.
In selecting simulation software, attention should be given to the following
criteria:
• Quality—Reliable algorithms, absence of bugs, and graceful handling of
user input errors.
• Features and capability—Ability to model systems of any size and
complexity and meet simulation needs in terms of external interfacing,
animation, reporting, and so forth.
• Ease of use—Intuitive editing and built-in constructs that minimize the
time and effort to learn and use the product.
• Services—Quality and level of training and technical support, including
the long-term sustainability of this service.
• Cost—The total cost of ownership (TCO), which includes cost of
procurement, training, support, and labor to use the software.
Although fewer than a dozen major products are on the market, there are
over a hundred products from which to choose. It is best to conduct an initial
screening to develop a short list. Then a more in-depth evaluation can be
conducted on the three or four finalists. In conducting the initial screening,
different products should be screened in terms of their ability to meet minimum
requirements in the areas just identified. Often vendor literature or buying
guides are helpful at this stage of the evaluation. Magazines such as IIE
Solutions and OR/MS Today run regular reviews of simulation products.
In the final evaluation phase, the products should be examined with greater
scrutiny in each of the areas just listed. Since all major software products have
bugs, it is best to look for a product that is mature and has a large user base. This
will help ensure that even rare bugs have been identified and fixed. Simulation
features are pretty easy to assess because most vendors have feature lists avail-
able. One of the most difficult criteria to assess in a simulation product is ease of
use. Most vendors will likely claim that their product is the easiest to use, so it is
always a good idea to have the vendor being considered build a simple model in
your presence that is representative of the target application. This is the best way
to test the suitability and ease of use of the software. At a minimum, it is good to
experiment building simple models with the software to see how user friendly it
is.
 Chapter 5 Getting Started 107

Many vendors offer guarantees on their products so they may be returned after
some trial period. This allows you to try out the software to see how well it fits
your needs.
The services provided by the software provider can be a lifesaver. If
working late on a project, it may be urgent to get immediate help with a
modeling or soft- ware problem. Basic and advanced training classes, good
documentation, and lots of example models can provide invaluable resources
for becoming proficient in the use of the software.
When selecting simulation software, it is important to assess the total cost
of ownership. There often tends to be an overemphasis on the purchase price of
the software with little regard for the cost associated with learning and using
the software. It has been recommended that simulation software be
purchased on the basis of productivity rather than price (Banks and Gibson
1997). The purchase price of the software can sometimes be only a small
fraction of the cost in time and labor that results from having a tool that is
difficult to use or inadequate for the application.
Other considerations that may come into play when selecting a product in-
clude quality of the documentation, hardware requirements (for example, is a
graphics accelerator card required?), and available consulting services.

5.3 Simulation Procedure

Once a suitable application has been selected and appropriate tools and
personnel are in place, the simulation study can begin. Simulation is much more
than build- ing and running a model of the process. Successful simulation
projects are well planned and coordinated. While there are no strict rules on how
to conduct a sim- ulation project, the following steps are generally
recommended:
Step 1: Define objective, scope, and requirements. Define the purpose
of the simulation project and what the scope of the project will be.
Requirements need to be defined in terms of resources, time, and budget
for carrying out the project.
Step 2: Collect and analyze system data. Identify, gather, and analyze the
data defining the system to be modeled. This step results in a conceptual
model and a data document on which all can agree.
Step 3: Build the model. Develop a simulation model of the system.
Step 4: Validate the model. Debug the model and make sure it is a
credible representation of the real system.
Step 5: Conduct experiments. Run the simulation for each of the
scenarios to be evaluated and analyze the results.
Step 6: Present the results. Present the findings and make
recommendations so that an informed decision can be made.
Each step need not be completed in its entirety before moving to the next
step. The procedure for doing a simulation is an iterative one in which activities
 108 Part I Study Chapters

are refined and sometimes redefined with each iteration. The decision to push
toward further refinement should be dictated by the objectives and constraints of
the study as well as by sensitivity analysis, which determines whether additional
refinement will yield meaningful results. Even after the results are presented,
there are often requests to conduct additional experiments. Describing this itera-
tive process, Pritsker and Pegden (1979) observe,
The stages of simulation are rarely performed in a structured sequence beginning
with problem definition and ending with documentation. A simulation project may
involve false starts, erroneous assumptions which must later be abandoned,
reformulation of the problem objectives, and repeated evaluation and redesign of the
model. If properly done, however, this iterative process should result in a simulation
model which prop- erly assesses alternatives and enhances the decision making
process.
Figure 5.1 illustrates this iterative process.

FIGURE 5.1
Define objective,
Iterative nature of scope, and
simulation. requirements

Collect and
analyze system
data

Build model

Validate model

Conduct
experiments

Present
results
 Chapter 5 Getting Started 109

The remainder of this chapter focuses on the first step of defining the objec-
tive, scope, and requirements of the study. The remaining steps will be discussed
in later chapters.

5.4 Defining the Objective

The objective of a simulation defines the purpose or reason for conducting the
simulation study. It should be realistic and achievable, given the time and
resource constraints of the study. Simulation objectives can be grouped into the
following general categories:
• Performance analysis—What is the all-around performance of the system
in terms of resource utilization, flow time, output rate, and so on?
• Capacity/constraint analysis—When pushed to the maximum, what is
the processing or production capacity of the system and where are the
bottlenecks?
• Configuration comparison—How well does one system configuration
meet performance objectives compared to another?
• Optimization—What settings for particular decision variables best
achieve desired performance goals?
• Sensitivity analysis—Which decision variables are the most influential on
performance measures, and how influential are they?
• Visualization—How can system dynamics be most effectively visualized?
Naturally, a simulation project may have multiple objectives and therefore
fall under two or more of the categories listed here. For example, a sensitivity
analysis may be conducted as part of an optimization study to determine the
highest-leveraging variables on which to optimize. After the model is optimized,
it may be necessary to focus attention on enhancing the visualization of the
model to more effectively sell the solution to management.
Sometimes the objectives change or expand as the project progresses. The
insights provided by simulation give rise to previously unforeseen opportunities
for improvement. Furthermore, the very process of doing a simulation helps
refine and clarify objectives. Staying as close as possible to the initial scope of
the pro- ject is important, and changes to the scope should be documented and
assessed in terms of their impact on budget and schedule. Otherwise, “scope
creep” sets in and the project never ends.
Defining objectives for a simulation study should take into account the ulti-
mate intended use of the model. Some models are built as “throwaway”
models that are used only once and then discarded. Other models will be
reused for ongoing what-if analyses. Some simulations are run to obtain a
single summary statistical measure. Others require realistic animation to
convince a skeptical cus- tomer. Some models are only for the use of the analyst
and need not have a user- friendly interface. Other models are intended for
use by managers with little
110 Part I Study Chapters

simulation background and therefore require a customized, easy-to-use interface.

Some models are used to make decisions of minor consequence. Other models
serve as the basis for major financial decisions.
Following is a list of sample design and operational questions that
simulation can help answer. They are intended as examples of specific
objectives that might be defined for a simulation study.

Design Decisions
1. What division and sequence of processing activities provide the best
flow?
2. What is the best layout of offices, machines, equipment, and other work
areas for minimizing travel time and congestion?
3. How many operating personnel are needed to meet required production
or service levels?
4. What level of automation is the most cost-effective?
5. How many machines, tools, fixtures, or containers are needed to meet
throughput requirements?
6. What is the least-cost method of material handling or transportation that
meets processing requirements?
7. What are the appropriate number and location of pickup and drop-off
points in a material handling or transportation system that minimizes
waiting times?
8. What are the optimum number and size of waiting areas, storage areas,
queues, and buffers?
9. What is the effect of localizing rather than centralizing material storage,
resource pools, and so forth?
10.What automation control logic provides the best utilization of resources?
11.What is the optimum unit load or batch size for processing?
12.Where are the bottlenecks in the system, and how can they be
eliminated?
13.How many shifts are needed to meet a specific production or service
level?
14.What is the best speed to operate conveyors and other handling or
transportation equipment to meet move demands?

Operational Decisions
1. What is the best way to route material, customers, or calls through the
system?
2. What is the best way to allocate personnel for a particular set of tasks?
3. What is the best schedule for preventive maintenance?
4. How much preventive maintenance should be performed?
5. What is the best priority rule for selecting jobs and tasks?
Chapter 5 Getting Started 111

6. What is the best schedule for producing a mix of products or

customers?
7. What is the best inventory replenishment policy?
8. How much raw material and work-in-process inventory should be
maintained?
9. What is the best production control method (kanban, for example)?
10.What is the optimum sequence for producing a particular set of jobs or
processing a given set of customers?
11.How many personnel should be scheduled for a particular shift?
When the goal is to analyze some aspect of system performance, the
tendency is to think in terms of the mean or expected value of the performance
metric. For example, we are frequently interested in the average contents of a
queue or the average utilization of a resource. There are other metrics that may
have equal or even greater meaning that can be obtained from a simulation
study. For example, we might be interested in variation as a metric, such as the
standard deviation in waiting times. Extreme values can also be informative,
such as the minimum and maximum number of contents in a storage area. We
might also be interested in a percentile such as the percentage of time that the
utilization of a machine is less than a particular value, say, 80 percent. While
frequently we speak of designing systems to be able to handle peak periods, it
often makes more sense to design for a value above which values only occur
less than 5 or 10 percent of the time. It is more economical, for example, to
design a staging area on a shipping dock based on 90 percent of peak time
usage rather than based on the highest usage during peak time. Sometimes a
single measure is not as descriptive as a trend or pattern of performance.
Perhaps a measure has increasing and decreasing periods such as the activity in
a restaurant. In these situations, a detailed time series report would be the most
meaningful.
It is always best if objectives can be clearly, completely, and precisely
stated. You need to be able to set your sight clearly on what you are trying to
accomplish in the simulation study. You also need to be able to know whether
you hit your tar- get objective. To be effective, an objective should be one that
• Has high potential impact (reduce throughput rate costs, not reduce
backtraveling).
• Is achievable (20 percent inventory reduction, not zero inventory).
• Is specific (reduce waiting time in a particular queue, not
eliminate waste).
• Is quantifiable (reduce flow time by 40 percent, not reduce flow time).
• Is measurable (increase yield by 10 percent, not improve morale by
10 percent).
• Identifies any relevant constraints (reduce turnaround time by
20 percent without adding resources, not just reduce turnaround time by
20 percent).
112 Part I Study Chapters

Examples of well-stated objectives might be the following:

• Find the lowest-cost solution to reduce patient waiting time in an
emergency room so that no more than 10 percent of patients wait longer
than 15 minutes.
• Increase the throughput rate of an assembly line by an average
of 20 percent without additional capital expenditure.
While well-defined and clearly stated objectives are important to guide the
simulation effort, they should not restrict the simulation or inhibit creativity.
Michael Schrage (1999) observes that “the real value of a model or simulation
may stem less from its ability to test a hypothesis than from its power to generate
use- ful surprise. Louis Pasteur once remarked that ‘chance favors the prepared
mind.’ It holds equally true that chance favors the prepared prototype: models
and simu- lations can and should be media to create and capture surprise and
serendipity. . . . The challenge is to devise transparent models that also make
people shake their heads and say ‘Wow!’ ” The right “experts” can be
“hypervulnerable to surprise but well situated to turn surprise to their advantage.
That’s why Alexander Flem- ing recognized the importance of a mold on an
agar plate and discovered peni- cillin.” Finally, he says, “A prototype should be
an invitation to play. You know you have a successful prototype when people
who see it make useful suggestions about how it can be improved.”

5.5 Defining the Scope of Work

With a realistic, meaningful, and well-defined objective established, a scope of
work can be defined for achieving the stated objective. The scope of work is im-
portant for guiding the study as well as providing a specification of the work to
be done upon which all can agree. The scope is essentially a project specification
that helps set expectations by clarifying to others exactly what the simulation
will in- clude and exclude. Such a specification is especially important if an
outside con- sultant is performing the simulation so that there is mutual
understanding of the deliverables required.
An important part of the scope is a specification of the models that will be
built. When evaluating improvements to an existing system, it is often desirable
to model the current system first. This is called an “as-is” model. Results from
the as-is model are statistically compared with outputs of the real-world
system to validate the simulation model. This as-is model can then be used as a
benchmark or baseline to compare the results of “to-be” models. For
reengineering or process improvement studies, this two-phase modeling
approach is recommended. For entirely new facilities or processes, there will be
no as-is model. There may, how- ever, be several to-be models to compare.
To ensure that the budget and schedule are realistic, a detailed specification
should be drafted to include
• Model scope.
• Level of detail.
 Chapter 5 Getting Started 113

• Data-gathering responsibilities.
• Experimentation.
• Form of results.

5.5.1 Determining Model Scope

Model scope refers to what system elements should be represented in the model.
Determining the scope of a model should be based on how much impact a
partic- ular activity has on achieving the objectives of the simulation.
One decision regarding model scope relates to the model boundaries. A
com- mon tendency for beginners is to model the entire system, even when the
problem area and all relevant variables are actually isolated within a smaller
subsystem. If, for example, the objective is to find the number of operators
needed to meet a required production level for a machining cell, it probably
isn’t necessary to model what happens to parts after leaving the cell. Figure 5.2
illustrates how the extent of the model should be confined to only those
activities whose interactions have a direct bearing on the problem being studied.
If the objective of the simula- tion is to find how many operators are needed to
perform activity C, upstream and downstream activities that do not impact this
decision should be omitted from the model. In Figure 5.2, since the input rate to
activity B is reasonably predictable, based on knowledge of how activity A
behaves, activity A is excluded from the model and only modeled as an arrival
rate to location 2. Since activity E never causes entities to back up at D,
activity E can also be ignored.
In addition to limiting the model boundaries, other system elements may be
excluded from a model due to their irrelevance. Factors such as off-shift mainte-
nance activities or machine setups that are brief and occur only infrequently can
usually be safely ignored. The determination of what elements can be eliminated
should be based on their relevance to the objectives of the study.

5.5.2 Deciding on Level of Detail

Where model scope is concerned more with model breadth, the level of detail
de- termines the depth of a model. More specifically, it defines the granularity or
res- olution of the model. At one extreme, an entire factory can be modeled as a
single “black box” operation with a random activity time. At the other
extreme is a

FIGURE 5.2
Confining the model
to impacting
activities. Activity Activity Activity Activity Activity
A B C D E

Scope of model
114 Part I Study Chapters

FIGURE 5.3
Effect of level of detail on model development time.

One-to-one
correspondence

Minimum
required

Level of
detail

Model development time

“white box” model that is very detailed and produces a one-to-one correspon-
dence between the model and the system.
Determining the appropriate level of detail is an important decision. Too
much detail makes it difficult and time-consuming to develop and debug the
model. Too little detail may make the model unrealistic by oversimplifying the
process. Figure 5.3 illustrates how the time to develop a model is affected by
the level of detail. It also highlights the importance of including only enough de-
tail to meet the objectives of the study.
The level of detail is determined largely by the degree of accuracy required
in the results. If only a rough estimate is being sought, it may be sufficient to
model just the flow sequence and processing times. If, on the other hand, a
close answer is needed, all of the elements that drive system behavior should be
precisely modeled.

5.5.3 Assigning Data-Gathering Responsibilities

In any simulation project, data gathering is almost always the most difficult and
time-consuming task. Identifying data requirements and who will be responsible
for gathering the data is essential if this activity is to succeed. If the modeler is
re- sponsible for gathering data, it is important to have the full cooperation of
those who possess the data, including equipment vendors, engineers,
technicians, direct labor personnel, and supervisors. It is also a good idea to
get those individuals involved who have a stake in the results, such as managers
and possibly even cus- tomers. The more fingerprints you can get on the knife,
the stronger the commit- ment you’ll have to the success of the project.
Chapter 5 Getting Started 115

Dates should be set for completing the data-gathering phase because, left
un- controlled, it could go on indefinitely. One lesson you learn quickly is that
good data are elusive and you can always spend more time trying to refine the
data. Nearly all models are based partially on assumptions, simply because
complete and accurate information is usually lacking. The project team, in
cooperation with stakeholders in the system, will need to agree on the
assumptions to be made in the model.

5.5.4 Planning the Experimentation

The number and nature of the scenarios or alternative configurations to be evalu-
ated should be planned from the outset to ensure that adequate time is allotted.
Often this decision itself is influenced by the time constraints of the study.
Where only slightly different scenarios are being evaluated, a single model can
be devel- oped and modified appropriately to run each scenario. If alternative
configura- tions are significantly different, separate models may need to be
built. It may require nearly as much effort modeling each configuration as it
does developing the initial model.
For studies considering improvements to an existing system, it is often help-
ful and effective to model the current system as well as the proposed system.
The basic premise is that you are not ready to improve a system until you
understand how the current system operates. Information on the current system
operation is easier to obtain than information on the proposed change of
operation. Once a model of the current system is built, it is easier to visualize
what changes need to be made for the modified system. Both systems may even
be modeled together in the same simulation and made to run side by side.
During the final presentation of the results, being able to show both the as-is
and to-be versions of the system effectively demonstrates the differences in
performance.

5.5.5 Determining the Form of Results

The form in which the results are to be presented can significantly affect the time
and effort involved in the simulation study. If a detailed animation or an
extensive written report is expected, the project can easily stretch on for several
weeks after the experimentation phase has been completed. Many times the
only result re- quired is a simple verification of whether a system is capable of
meeting a produc- tion requirement or service level. In such cases, a single
number may suffice. In other instances, a complete document may be required
that details all of the goals, data sources, assumptions, modeling procedures,
experiments, analysis of results, and recommendations. The key to determining
the kind and quantity of informa- tion to present to the decision maker or
stakeholder is to ask what decision is being made with the simulation and what
the background is of the person(s) who will be making the decision. Attention
should then be focused on providing adequate in- formation and effective
visualization to enable the right decision to be made.
Sometimes the simulation animation can effectively show bottleneck areas or
compare alternative scenarios. When showing animation, use graphics and
displays
116 Part I Study Chapters

that focus attention on the area of interest. If lots of color and detail are added to
the animation, it may detract from the key issues. Usually the best approach is to
keep stationary or background graphics simple, perhaps displaying only a
schematic of the layout using neutral colors. Entities or other dynamic
graphics can then be displayed more colorfully to make them stand out.
Sometimes the most effective presentation is a realistic 3-D animation. Other
times the flow of entities along a flowchart consisting of simple boxes and
arrows may be more effective.
Another effective use of animation in presenting the results is to run two or
more scenarios side by side, displaying a scoreboard that shows how they
com- pare on one or two key performance measures. The scoreboard may even
include a bar graph or other chart that is dynamically updated to compare
results.
Most decision makers such as managers need to have only a few key items
of information for making the decision. It should be remembered that people,
not the model, make the final decision. With this in mind, every effort should be
made to help the decision maker clearly understand the options and their
associated consequences. The use of charts helps managers visualize and focus
their atten- tion on key decision factors. Charts are attention grabbers and are
much more ef- fective in making a point than plowing through a written
document or sheets of computer printout.

5.6 Defining Project Requirements

With the scope of work defined, resource, budget, and time requirements can be
determined for the project. Most of the resources (personnel, hardware, and so
on) should have already been put in place when the decision was made to do a
simu- lation. The primary task at this point is to develop a budget and schedule
for the project. A budget or schedule overrun can sour an otherwise great
modeling effort. It does little good if simulation solves a problem but the time to
do the simulation extends beyond the deadline for applying the solution, or the
cost to find the solu- tion exceeds the benefit that is derived. Realistic
budgeting and scheduling are based on a complete knowledge of the
requirements of the study. It is not uncom- mon to begin a simulation project
with aspirations of developing an impressively detailed model or of creating a
stunningly realistic animation only to scramble at the last minute to throw
together a crude model that barely meets the deadline.
Obviously, the time to perform a simulation project will vary depending on
the size and difficulty of the project. If input data cannot be readily obtained, it
may be necessary to add several additional weeks to the project. Assuming
input data are readily available, a small project typically takes two to four
weeks, while large projects can take two to four months. A simulation schedule
should be based on realistic projections of the time requirements, keeping in
mind that
• Data gathering and analysis can take over 50 percent of the overall
project time.
• Model building usually takes the least amount of time (10 to 20 percent).
 Chapter 5 Getting Started 117

• Once a base model is built, several additional weeks may be needed to

conduct all of the desired experiments, especially if the purpose of the
project is to make system comparisons.
• At least several days must be allowed to clean up the models and develop
the final presentation.
• Simulation projects follow the 90–10 rule, where the first 90 percent takes
10 percent of the time, and the last 10 percent takes the other 90 percent.

5.7 Reasons Why Simulation Projects Fail

No matter how good the intentions, simulation projects can fail if not carefully
planned and executed. Many specific reasons contribute to simulation failure.
Some of the most common causes of unsuccessful projects include
• Unclear objectives.
• Unskilled modelers.
• Unavailable data.
• Unmanaged expectations.
• Unsupportive management.
• Underestimated requirements.
• Uninvolved process owner(s).
If the right procedure is followed, and the necessary time and resources are com-
mitted to the project, simulation is always going to provide some benefit to the
decision-making process. The best way to ensure success is to make sure that
everyone involved is educated in the process and understands the benefits and
limitations of simulation.

5.8 Summary
Simulation projects are almost certain to fail if there is little or no planning.
Doing simulation requires some preliminary work so that the appropriate
resources and personnel are in place. Beginning a simulation project requires
selecting the right application, defining objectives, acquiring the necessary tools
and resources, and planning the work to be performed. Applications should be
selected that hold the greatest promise for achieving company goals.
Simulation is most effective when it follows a logical procedure. Objectives
should be clearly stated and a plan developed for completing the project. Data
gathering should focus on defining the system and formulating a conceptual
model. A simulation should then be built that accurately yet minimally captures
the system definition. The model should be verified and validated to ensure that
the results can be relied upon. Experiments should be run that are oriented
toward meeting the original objectives. Finally, the results should be presented
in a way
118 Part I Study Chapters

that clearly represents the findings of the study. Simulation is an iterative process
that requires redefinition and fine-tuning at all stages in the process.
Objectives should be clearly defined and agreed upon to avoid wasted
efforts. They should be documented and followed to avoid “scope creep.” A
concisely stated objective and a written scope of work can help keep a
simulation study on track.
Specific items to address when planning a study include defining the model
scope, describing the level of detail required, assigning data-gathering responsi-
bilities, specifying the types of experiments, and deciding on the form of the re-
sults. Simulation objectives together with time, resources, and budget constraints
drive the rest of the decisions that are made in completing a simulation project.
Finally, it is people, not the model, who ultimately make the decision.
The importance of involvement of process owners and stakeholders
through- out the project cannot be overemphasized. Management support
throughout the project is vital. Ultimately, it is only when expectations are met
or exceeded that a simulation can be deemed a success.

5.9 Review Questions

1. Why are good project management skills important to the success of a
simulation project?
2. If you are new to simulation and have the option of simulating either a
small system with a small payback or a large system with a large
payback, which project would you choose and why?
3. How can simulation software make or break a simulation study?
4. When evaluating ease of use in simulation software, how can you make
an informed decision if every vendor advertises ease of use?
5. Why is it important to have clearly defined objectives for a simulation
that everyone understands and can agree on?
6. For each of the following systems, define one possible simulation
objective:
a. A manufacturing cell.
b. A fast-food restaurant.
c. An emergency room of a hospital.
d. A tire distribution center.
e. A public bus transportation system.
f. A post office.
g. A bank of elevators in a high-rise office building.
h. A time-shared, multitasking computer system consisting of a server,
many slave terminals, a high-speed disk, and a processor.
i. A rental car agency at a major airport.
7. How can you effectively manage expectations during a simulation
project?
8. Suppose you are determining the size of a waiting area for a service
facility (such as a clinic, a car repair shop, or a copy center) where
the
 Chapter 5 Getting Started 119

arrival rate fluctuates throughout the day. On which of the following

metrics would you base the waiting area capacity and why?
a. The average number of customers waiting.
b. The peak number of customers waiting.
c. The 95th percentile of customers waiting.
9. What step in doing a simulation study generally takes the longest?
10.What stage in model building usually gets cut short?
11.What factors should determine the scope of a model?
12.What factors should determine the level of detail to include in a model?
13.What is the advantage of building as-is and to-be models?
14.What should determine the form of results of a simulation study?

5.10 Case Studies

CASE STUDY A
AST COMPUTES BIG BENEFITS USING SIMULATION
John Perry
Manufacturing Engineer

Source: AST Research Inc. Used with permission by ProModel, 1999.

In the world of computer manufacturing and assembly, success is measured in terms of

seconds. The PC business poses some unique challenges: it is intensely competitive with
thin profit margins and is characterized by constantly changing technologies and
products. The race is to excel in rapid delivery to the marketplace through high-velocity
manufac- turing. A manufacturer that can minimize the time needed to assemble a
computer, move nimbly to respond to change, and get maximum productivity out of its
capital investment has an edge. At AST Research, we use computer simulation to realize
these goals and, so far, have achieved significant benefits. The application area, which is
product assembly, is an area where almost anyone can benefit from the use of simulation.
120 Part I Study Chapters

The Problem
AST Research Inc., founded in 1980, has become a multibillion-dollar PC manufacturer.
We assemble personal computers and servers in Fort Worth, Texas, and offshore. For a
long time, we “optimized” (planned) our assembly procedures using traditional
methods— gathering time-and-motion data via stopwatches and videotape, performing
simple arithmetic calculations to obtain information about the operation and
performance of the assembly line, and using seat-of-the-pants guesstimates to “optimize”
assembly line output and labor utilization.

The Model
In December 1994 a new vice president joined AST. Management had long been commit-
ted to increasing the plant’s efficiency and output, and our new vice president had experi-
ence in using simulation to improve production. We began using ProModel simulation as
a tool for optimizing our assembly lines, and to improve our confidence that changes
pro- posed in the assembly process would work out in practice. The results have been
signifi- cant. They include
• Reduced labor input to each unit.
• Shortened production cycle times.
• Reduced reject rate.
• Increased ability to change assembly instructions quickly when changes become
necessary.
Now when we implement changes, we are confident that those changes in fact will
improve things.
The first thing we did was learn how to use the simulation software. Then we
attempted to construct a model of our current operations. This would serve two important
functions: it would tell us whether we really understood how to use the software, and it
would validate our understanding of our own assembly lines. If we could not construct
a model of our assembly line that agreed with the real one, that would mean that there
was a major flaw either in our ability to model the system or in our understanding of our
own operations.
Building a model of our own operations sounded simple enough. After all, we had an
exhaustive catalog of all the steps needed to assemble a computer, and (from previous
data collection efforts) information on how long each operation took. But building a
model that agreed with our real-world situation turned out to be a challenging yet
tremendously edu- cational activity.
For example, one of our early models showed that we were producing several
thousand units in a few hours. Since we were not quite that good—we were off by at least
a factor of 10—we concluded that we had a major problem in the model we had built, so
we went back to study things in more detail. In every case, our early models failed
because we had over- looked or misunderstood how things actually worked on our
assembly lines.
Eventually, we built a model that worked and agreed reasonably well with our real-
world system out in the factory. To make use of the model, we generated ideas that we
thought would cut down our assembly time and then simulated them in our model.
We examined a number of changes proposed by our engineers and others, and then
sim- ulated the ones that looked most promising. Some proposed changes were
counterpro- ductive according to our simulation results. We also did a detailed
investigation of our test- ing stations to determine whether it was more efficient to move
computers to be tested into
Chapter 5 Getting Started 121

the testing station via FIFO (first-in, first-out) or LIFO (last-in, first-out). Modeling
showed us that FIFO was more efficient. When we implemented that change, we realized
the gain we had predicted.
Simulation helped us avoid buying more expensive equipment. Some of our material-
handling specialists predicted, based on their experience, that if we increased throughput
by 30 percent, we would have to add some additional, special equipment to the assembly
floor or risk some serious blockages. Simulation showed us that was not true and in prac-
tice the simulation turned out to be correct.
We determined that we could move material faster if we gave material movers a
specific pattern to follow instead of just doing things sequentially. For example, in
moving certain items from our testing area, we determined that the most time-efficient
way would be to move shelf 1 first, followed by shelf 4, then shelf 3, and so on.
After our first round of making “serious” changes to our operation and simulating
them, our actual production was within a few percentage points of our predicted
production. Also, by combining some tasks, we were able to reduce our head count on
each assembly line significantly.
We have completed several rounds of changes, and today, encouraged by the
experience of our new investor, Samsung, we have made a significant advance that we
call Vision 5. The idea of Vision 5 is to have only five people in each cell
assembling computers. Although there was initially some skepticism about whether this
concept would work, our simulations showed that it would, so today we have
converted one of our “focused factories” to this concept and have experienced
additional benefits. Seeing the benefits from that effort has caused our management to
increase its commitment to simulation.

The Results
Simulation has proven its effectiveness at AST Research. We have achieved a number of
useful, measurable goals. For competitive reasons, specific numbers cannot be provided;
however, in order of importance, the benefits we have achieved are
• Reduced the reject rate.
• Reduced blockage by 25 percent.
• Increased operator efficiency by 20 percent.
• Increased overall output by 15 percent.
• Reduced the labor cost of each computer.
Other benefits included increased ability to explain and justify proposed changes to
management through the use of the graphic animation. Simulation helped us make fewer
missteps in terms of implementing changes that could have impaired our output. We were
able to try multiple scenarios in our efforts to improve productivity and efficiency at com-
paratively low cost and risk. We also learned that the best simulation efforts invite partici-
pation by more disciplines in the factory, which helps in terms of team-building. All of
these benefits were accomplished at minimal cost. These gains have also caused a cultural
shift at AST, and because we have a tool that facilitates production changes, the company
is now committed to continuous improvement of our assembly practices.
Our use of simulation has convinced us that it produces real, measurable results—and
equally important, it has helped us avoid making changes that we thought made common
sense, but when simulated turned out to be ineffective. Because of that demonstrable
payoff, simulation has become a key element of our toolkit in optimizing production.
122 Part I Study Chapters

Questions
1. What were the objectives for using simulation at AST?
2. Why was simulation better than the traditional methods they were using to achieve
these objectives?
3. What common-sense solution was disproved by using simulation?
4. What were some of the unexpected side benefits from using simulation?
5. What insights on the use of simulation did you gain from this case study?

CASE STUDY B
DURHAM REGIONAL HOSPITAL SAVES $150,000
ANNUALLY USING SIMULATION TOOLS
Bonnie Lowder
Management Engineer, Premier

Used with permission by ProModel, 1999.

Durham Regional Hospital, a 450-bed facility located in Durham, North Carolina, has
been serving Durham County for 25 years. This public, full-service, acute-care facility is
facing the same competition that is now a part of the entire health care industry. With that
in mind, Durham Regional Hospital is making a conscious effort to provide the highest
quality of care while also controlling costs.
To assist with cost control efforts, Durham Regional Hospital uses Premier’s Customer-
Based Management Engineering program. Premier’s management engineers are very
Chapter 5 Getting Started 123

involved with the hospital’s reengineering and work redesign projects. Simulation is one
of the tools the management engineers use to assist in the redesign of hospital services
and processes. Since the hospital was preparing to add an outpatient services area that
was to open in May 1997, a MedModel simulation project was requested by Durham
Regional Hospital to see how this Express Services area would impact their other
outpatient areas. This project involved the addition of an outpatient Express Services
addition. The Express Services area is made up of two radiology rooms, four phlebotomy
lab stations, a patient interview room, and an EKG room. The model was set up to
examine which kind of patients would best be serviced in that area, what hours the
clinic would operate, and
what staffing levels would be necessary to provide optimum care.

The Model
Data were collected from each department with potential Express Services patients. The
new Express Services area would eliminate the current reception desk in the main radiol-
ogy department; all radiology outpatients would have their order entry at Express
Services. In fiscal year 1996, the radiology department registered 21,159 outpatients. Of
those, one- third could have had their procedure performed in Express Services. An
average of 18 out- patient surgery patients are seen each week for their preadmission
testing. All these patients could have their preadmission tests performed in the Express
Services area. The laboratory sees approximately 14 walk-in phlebotomy patients per
week. Of those, 10 patients are simple collections and 4 are considered complex. The
simple collections can be performed by anyone trained in phlebotomy. The complex
collections should be done by skilled lab personnel. The collections for all of these
patients could be performed in Express Services. Based on the data, 25 patients a day
from the Convenient Care Clinic will need simple X rays and could also use the
Express Services area. Procedure times for each patient were determined from previous
data collection and observation.
The model was built in two months. Durham Regional Hospital had used simulation
in the past for both Emergency Department and Ambulatory Care Unit redesign projects
and thus the management team was convinced of its efficacy. After the model was
completed, it was presented to department managers from all affected areas. The model
was presented to the assembled group in order to validate the data and assumptions. To
test for validity, the model was run for 30 replications, with each replication lasting a
period of two weeks. The results were measured against known values.

The Results
The model showed that routing all Convenient Care Clinic patients through Express
Services would create a bottleneck in the imaging rooms. This would create unacceptable
wait times for the radiology patients and the Convenient Care patients. Creating a model
scenario where Convenient Care patients were accepted only after 5:00 P.M. showed
that the anticipated problem could be eliminated. The model also showed that the
weekend vol- ume would be very low. Even at minimum staffing levels, the radiology
technicians and clerks would be underutilized. The recommendation was made to close
the Express Ser- vices area on the weekends. Finally, the model showed that the
staffing levels could be lower than had been planned. For example, the workload for the
outpatient lab tech drops off after 6:00 P.M. The recommendation was to eliminate
outpatient lab techs after 6:00 P.M. Further savings could be achieved by cross-training
the radiology technicians and possibly the clerks to perform simple phlebotomy. This
would also provide for backup during busy
124 Part I Study Chapters

times. The savings for the simulation efforts were projected to be $148,762 annually.
These savings were identified from the difference in staffing levels initially requested for
Express Services and the levels that were validated after the simulation model results
were ana- lyzed, as well as the closing of the clinic on weekends. This model would also
be used in the future to test possible changes to Express Services. Durham Regional
Hospital would be able to make minor adjustments to the area and visualize the
outcome before imple- mentation. Since this was a new area, they would also be able to
test minor changes before the area was opened.
The results of the model allowed the hospital to avoid potential bottlenecks in the
radi- ology department, reduce the proposed staffing levels in the Express Services area,
and val- idate that the clinic should be closed on weekends. As stated by Dottie Hughes,
director of Radiology Services: “The simulation model allowed us to see what changes
needed to be made before the area is opened. By making these changes now, we
anticipate a shorter wait time for our patients than if the simulation had not been used.”
The simulation results were able to show that an annual savings of $148,762 could be
expected by altering some of the preconceived Express Services plan.

Future Applications
Larry Suitt, senior vice president, explains, “Simulation has proved to be a valuable tool
for our hospital. It has allowed us to evaluate changes in processes before money is
spent on construction. It has also helped us to redesign existing services to better meet the
needs of our patients.” Durham Regional Hospital will continue to use simulation in new
projects to improve its health care processes. The hospital is responsible for the
ambulance service for the entire county. After the 911 call is received, the hospital’s
ambulance service picks up the patient and takes him or her to the nearest hospital.
Durham Regional Hospital is plan- ning to use simulation to evaluate how relocating
some of the ambulances to other stations will affect the response time to the 911 calls.

Questions
1. Why was this a good application for simulation?
2. What key elements of the study made the project successful?
3. What specific decisions were made as a result of the simulation study?
4. What economic benefit was able to be shown from the project?
5. What insights did you gain from this case study about the way simulation is used?

References
Banks, Jerry, and Randall R. Gibson. “Selecting Simulation Software.” IIE Solutions,
May 1997, pp. 29–32.
Kelton, W. D. “Statistical Issues in Simulation.” In Proceedings of the 1996 Winter
Simulation Conference, ed. J. Charnes, D. Morrice, D. Brunner, and J. Swain, 1996,
pp. 47–54.
Pritsker, Alan B., and Claude Dennis Pegden. Introduction to Simulation and SLAM.
New York: John Wiley & Sons, 1979.
Schrage, Michael. Serious Play: How the World’s Best Companies Simulate to Innovate.
Cambridge, MA: Harvard Business School Press, 1999.
Harrell−Ghosh−Bo I. Study 6. Data © The
wden: Simulation Chapters Collection and McGraw−Hill
Using ProModel, Analysis Companies,
Second Edition

C H A P T E R

6 DATA COLLECTION
AND ANALYSIS

“You can observe a lot just by watching.”

—Yogi Berra

6.1 Introduction
In the previous chapter, we discussed the importance of having clearly defined
objectives and a well-organized plan for conducting a simulation study. In this
chapter, we look at the data-gathering phase of a simulation project that defines
the system being modeled. The result of the data-gathering effort is a conceptual
or mental model of how the system is configured and how it operates. This con-
ceptual model may take the form of a written description, a flow diagram, or
even a simple sketch on the back of an envelope. It becomes the basis for the
simula- tion model that will be created.
Data collection is the most challenging and time-consuming task in simula-
tion. For new systems, information is usually very sketchy and only roughly
esti- mated. For existing systems, there may be years of raw, unorganized data
to sort through. Information is seldom available in a form that is directly usable
in build- ing a simulation model. It nearly always needs to be filtered and
massaged to get it into the right format and to reflect the projected conditions
under which the system is to be analyzed. Many data-gathering efforts end up
with lots of data but little use- ful information. Data should be gathered
purposefully to avoid wasting not only the modeler’s time but also the time of
individuals who are supplying the data.
This chapter presents guidelines and procedures for gathering data.
Statistical techniques for analyzing data and fitting probability distributions to
data are also discussed. The following questions are answered:
• What is the best procedure to follow when gathering data?
• What types of data should be gathered?

125
126 Part I Study Chapters

• What sources should be used when gathering data?

• What types of analyses should be performed on the data?
• How do you select the right probability distribution that represents the
data?
• How should data be documented?

6.2 Guidelines for Data Gathering

Data gathering should not be performed haphazardly with the idea that you will
sort through all the information once it is collected. Data should be collected
sys- tematically, seeking specific items of information that are needed for
building the model. If approached with the end in mind, data gathering will be
much more pro- ductive. Following are a few guidelines to keep in mind when
gathering data that will help maintain a purposeful focus.
1. Identify triggering events. When defining the activities that occur in the
system to be modeled, it is important to identify the causes or conditions
that trigger the activities. In gathering downtime data, for example, it is
useful to distinguish between downtimes due to failure, planned or
scheduled downtimes, and downtimes that are actually idle periods due
to unavailability of stock. In other words, you need to know the cause of
the downtime. Questions should be asked such as What triggers the
movement of entities? and What triggers the use of a particular
resource? To be valid, a model needs to capture the right triggering
events that initiate the activities within the system.
2. Focus only on key impact factors. Discrimination should be used when
gathering data to avoid wasting time tracking down information that has
little or no impact on system performance. For example, off-shift
activities such as preventive maintenance that do not delay the process
flow should be ignored because they are performed during off-hours.
Similarly, extremely rare downtimes, negligible move times, on-the-fly
inspections, external setups, and other activities that have little or no
impact on the overall flow may be safely ignored.
3. Isolate actual activity times. In determining activity times, it is important
to isolate only the time it takes to do the activity itself, excluding any
extraneous time waiting for material and resources so the activity can be
performed. For example, filling a customer order or performing an
assembly operation requires that items or component parts first be
available. The time to wait for items or parts should not be included in
the time to do the actual assembly. This waiting time is going to vary
based on conditions in the system and therefore can’t be known in
advance. It will be known only as the simulation is run. In some
instances, isolating actual activity times may be difficult, especially
when dealing with historical data reflecting aggregate times. Historical
Chapter 6 Data Collection and Analysis 127

records of repair times, for example, often lump together the time spent
waiting for repair personnel to become available and the actual time
spent performing the repair. What you would like to do is separate the
waiting time from the actual repair time because the waiting time is
a function of the availability of the repair person, which may vary
depending on the system operation.
4. Look for common groupings. When dealing with lots of variety in a
simulation such as hundreds of part types or customer profiles, it helps to
look for common groupings or patterns. If, for example, you are modeling a
process that has 300 entity types, it may be difficult to get information on
the exact mix and all of the varied routings that can occur. Having such
detailed information is usually too cumbersome to work with even if you
did have it. The solution is to reduce the data
to common behaviors and patterns. One way to group common data is to
first identify general categories into which all data can be assigned.
Then the percentage of cases that fall within each category is calculated
or estimated. It is not uncommon for beginning modelers to attempt to
use actual logged input streams such as customer arrivals or material
shipments when building a model. After struggling to define hundreds of
individual arrivals or routings, it begins to dawn on them that they can
group this information into a few categories and assign probabilities that
any given instance will fall within a particular category. This allows
dozens and sometimes hundreds of unique instances to be described in a
few brief commands. The secret to identifying common groupings is to
“think probabilistically.”
5. Focus on essence rather than substance. A system definition for modeling
purposes should capture the cause-and-effect relationships and ignore the
meaningless (to simulation) details. This is called system abstraction and
seeks to define the essence of system behavior rather than the substance.
A system should be abstracted to the highest level possible while still
preserving the essence of the system operation. Using this “black box”
approach to system definition, we are not concerned about the nature of
the activity being performed, such as milling, grinding, or inspection. We
are interested only in the impact that the activity has on the use of
resources and the delay of entity flow. A proficient modeler constantly is
thinking abstractly about the system operation and avoids getting caught
up in the mechanics of the process.
6. Separate input variables from response variables. First-time modelers often
confuse input variables that define the operation of the system with response
variables that report system performance. Input variables define how the
system works (activity times, routing sequences, and the like) and should be
the focus of the data gathering. Response variables describe how the system
responds to a given set of input variables (amount of work in process,
resource utilization, throughput times, and so on).
128 Part I Study Chapters

Response variables do not “drive” model behavior. Performance or

response data should be of interest only if you are building an as-is
model and want to validate the simulation by comparing the simulation
output with actual performance.
Following these guidelines, the data-gathering effort will be much more
pro- ductive. In addition to keeping these guidelines in mind, it is also helpful
to fol- low a logical sequence of steps when gathering data. This ensures that
time and efforts are well spent. The steps to gathering data should follow
roughly this sequence:
Step 1: Determine data requirements.
Step 2: Identify data sources.
Step 3: Collect the data.
Step 4: Make assumptions where necessary.
Step 5: Analyze the data.
Step 6: Document and approve the data.
Of course, most of these steps overlap, and some iteration will occur as
objectives change and assumptions are refined. The balance of this chapter
is devoted to providing recommendations and examples of how to perform each
of these steps.

6.3 Determining Data Requirements

The first step in gathering data is to determine the data required for building the
model. This should be dictated primarily by the model scope and level of detail
required for achieving the objectives of the simulation. System data can be cate-
gorized as structural data, operational data, or numerical data.

6.3.1 Structural Data

Structural data involve all of the objects in the system to be modeled. This
includes such elements as entities (products, customers, and so on), resources
(operators, machines) and locations (waiting areas, workstations). Structural
information basi- cally describes the layout or configuration of the system as
well as identifies the items that are processed. It is important that all relevant
components that affect the behavior of the system be included.

6.3.2 Operational Data

Operational data explain how the system operates—that is, when, where, and
how events and activities take place. Operational data consist of all the
logical or behavioral information about the system such as routings, schedules,
downtime behavior, and resource allocation. If the process is structured and well
controlled,
 Chapter 6 Data Collection and Analysis 129

operational information is easy to define. If, on the other hand, the process has
evolved into an informal operation with no set rules, it can be very difficult to
de- fine. For a system to be simulated, operating policies that are undefined
and ambiguous must be codified into defined procedures and rules. If decisions
and outcomes vary, it is important to at least define this variability statistically
using probability expressions or distributions.

6.3.3 Numerical Data

Numerical data provide quantitative information about the system. Examples of
numerical data include capacities, arrival rates, activity times, and time between
failures. Some numerical values are easily determined, such as resource
capacities and working hours. Other values are more difficult to assess, such as
time between failures or routing probabilities. This is especially true if the
system being mod- eled is new and data are unavailable. It is important when
gathering numerical data to ask exactly what a particular data value represents.
For example, in col- lecting machining times, one should ask whether the time
reflects load and unload time or tool adjustments, and whether it is for
processing a batch of parts rather than individual parts.

6.3.4 Use of a Questionnaire

To help focus data-gathering efforts on the right information and to ensure pro-
ductive meetings with others on whom you depend for model information, it
may be useful to prepare a questionnaire for use in interviews. It is much
easier for people to respond to specific questions than to puzzle over and guess
at what in- formation is needed. When conducting an interview, sometimes
giving the contact person a specific list of questions in advance reduces the
length of the interview and the number of follow-up visits that would otherwise
be needed.
Below is a list of questions that might be included in a questionnaire. For
any questions requiring numeric information that could take the form of a
random vari- able, it is best if either a good sample of data or the actual defining
probability dis- tribution can be obtained. If sample data are unavailable, it is
useful to get at least estimates of the minimum, most likely, and maximum
values until more precise data can be obtained. Average values should be used
only as preliminary estimates.
System Description Questionnaire
1. What types of entities are processed in the system?
2. What is the routing sequence (each stopping or decision point) for each
entity type?
3. Where, when, and in what quantities do entities enter the system?
4. What are the time and resource requirements for each operation and
move?
5. In what quantities are entities processed and moved? (Define for each
location.)
130 Part I Study Chapters

6. What triggers entity movement from location to location

(completion of the operation, accumulation of a batch, a signal from
a downstream location, etc.)?
7. How do locations and resources determine which job to do next
(oldest waiting, highest priority, etc.)?
8. How are alternative routing and operation decisions made
(percentage, condition, etc.)?
9. How often do interruptions occur (setups, downtimes, etc.) and
what resources and time are required when they happen?
10. What is the schedule of availability for locations and
resources (define in terms of shifts, break times, scheduled
maintenance intervals, etc.)?
Answers to these questions should provide most if not all of the information
needed to build a model. Depending on the nature of the system and level of
detail required, additional questions may be added.

6.4 Identifying Data Sources

Rarely is all the information needed to build a model available from a single
source. It is usually the result of reviewing reports, conducting personal inter-
views, making personal observations, and making lots of assumptions. “It has
been my experience,” notes Carson (1986), “that for large-scale real systems,
there is seldom any one individual who understands how the system works in
suf- ficient detail to build an accurate simulation model. The modeler must be
willing to be a bit of a detective to ferret out the necessary knowledge.” This
is where persistence, careful observation, and good communication skills pay
off.
The types of sources to use when gathering data will depend largely on
whether you are simulating an existing system or a new system. For existing
systems, there will be a much wider range of sources from which to draw since
there are records and individuals with firsthand knowledge of the system. The
fact that the system ex- ists also permits the modeler to personally observe the
system and therefore be less dependent on the input of others—although
collaboration in data gathering is al- ways recommended. For new systems, the
sources of information are usually lim- ited to those individuals directly
involved in the design of the system. Most of the information is obtained from
system specifications and personal interviews with the design team. Depending
on the circumstances, good sources of data include
• Historical records—production, sales, scrap rates, equipment reliability.
• System documentation—process plans, facility layouts, work procedures.
• Personal observation—facility walk-through, time studies, work sampling.
• Personal interviews—operators (work methods), maintenance personnel
(repair procedures), engineers (routings), managers (schedules and
forecasts).
• Comparison with similar systems—within the company, within the same
industry, within any industry.
 Chapter 6 Data Collection and Analysis 131

• Vendor claims—process times, reliability of new machines.

• Design estimates—process times, move times, and so on for a new system.
• Research literature—published research on learning curves,
predetermined time studies.
In deciding whether to use a particular data source, it is important to
consider the reliability and accessibility of the source. Reliability of the
source directly impacts the validity of the model. A manager’s recollection, for
example, may not be as reliable as actual production logs. Opinions are
frequently biased and tend to provide distorted information. Objectivity should
be sought when using any data source.
Accessibility is also an important factor in source selection. If the source is
dif- ficult to access, such as historical data filed away in some corporate
archive or buried somewhere among hundreds of reports, it may have to be
overlooked. If the system spans several businesses, such as a supply chain, there
even may be an un- willingness to disclose information. The principle to
follow is to find out what sources are accessible and then use the sources that
provide the most reliable and complete information. Secondary sources can
always validate the primary source.

6.5 Collecting the Data

When gathering data, it is best to go from general to specific. In practice,
data gathering continues through to the end of the simulation project as
objectives change and information that was unavailable at the beginning of the
project be- gins to materialize. Consistent with this progressive refinement
approach, data should be gathered in the following sequence:
1. Define the overall entity flow.
2. Develop a description of operation.
3. Define incidental details and firm up data values.
This doesn’t necessarily mean that data will become available in this sequence.
It only means that the focus of attention should follow this order. For example,
some assumptions may need to be made initially to come up with a complete
definition of entity flow. Other incidental information obtained early on, such as
downtimes, may need to be set aside until it is needed at a later stage of model
building.

6.5.1 Defining the Entity Flow

The first area of focus in data collection should be in defining the basic entity
flow through the system. This establishes a skeletal framework to which
additional data can be attached. The entity flow is defined by following the
entity movement through the system, taking the perspective of the entity itself.
The overall entity flow is best described using an entity flow diagram (see
Figure 6.1) or perhaps by superimposing the entity flow on an actual layout of
the system.
An entity flow diagram is slightly different from a process flowchart. A
process flowchart shows the logical sequence of activities through which entities
 132 Part I Study Chapters

FIGURE 6.1 Product A

Entity flow
diagram. Station 1 Station 2 Station 3A

Station 3B

FIGURE 6.2 Exam

room Checkout
Entity flow diagram counter
for patient (3)
Patient Check-in Waiting
processing at Dr. counter room
Brown’s office.

go and defines what happens to the entity, not where it happens. An entity flow diagram, on the other
hand, is more of a routing chart that shows the physical movement of entities through the system from
location to location. An entity flow diagram should depict any branching that may occur in the flow such
as routings to alternative work centers or rework loops. The purpose of the entity flow dia- gram is to
document the overall flow of entities in the system and to provide a visual aid for communicating the
entity flow to others. A flow diagram is easy to understand and gets everyone thinking in the same way
about the system. It can easily be expanded as additional information is gathered to show activity times,
where resources are used, and so forth.

6.5.2 Developing a Description of Operation

Once an entity flow diagram has been created, a description of operation should
be developed that explains how entities are processed through the system. A
de- scription of operation may be written in a step-by-step, brief narrative form,
or it may be represented in tabular form. For simple systems, the entity flow
diagram itself can be annotated with operational information. Whatever the
form, it should identify for each type of entity at each location in the system
• The time and resource requirements of the activity or operation.
• Where, when, and in what quantities entities get routed next.
• The time and resource requirements for moving to the next location.
Example: Patients enter Dr. Brown’s office and sign in at the check-in counter
before taking a seat to wait for the nurse’s call. Patients are summoned to one of
three exami- nation rooms when one becomes available. The nurse escorts patients
to the examina- tion room, where they wait for Dr. Brown to see them. After
treatment, patients return on their own to the checkout counter, where they make
payment and possibly resched- ule another visit. This process is shown in the entity
flow diagram in Figure 6.2.
Using the entity flow diagram and information provided, a summary descrip-
tion of operation is created using a table format, as shown in Table 6.1.
 Chapter 6 Data Collection and Analysis 133

TABLE 6.1 Process Description for Dr. Brown’s Office

Activit Activity Next Move Move Move

Location y Resource Locatio Trigge Time Resource
Time n r
Check-in counter N(1,.2) min. Secretary Waiting room None 0.2 min. None
Waiting room None None Exam room When room is 0.8 min.* Nurse
available
Exam room N(15,4) min. Doctor Checkout counter None 0.2 min. None
Checkout counter N(3,.5) min. Secretary Exit None None None

*Stops to get weighed on the way.

Notice that the description of operation really provides the details of the en-
tity flow diagram. This detail is needed for defining the simulation model. The
times associated with activities and movements can be just estimates at this
stage. The important thing to accomplish at this point is simply to describe how
entities are processed through the system.
The entity flow diagram, together with the description of operation,
provides a good data document that can be expanded as the project
progresses. At this point, it is a good idea to conduct a structured walk-through
of the operation using the entity flow diagram as the focal point. Individuals
should be involved in this review who are familiar with the operation to ensure
that the description of oper- ation is accurate and complete.
Based on this description of operation, a first cut at building the model can
begin. Using ProModel, a model for simulating Dr. Brown’s practice can be built
in a matter of just a few minutes. Little translation is needed as both the diagram
(Figure 6.2) and the data table (Table 6.1) can be entered pretty much in the
same way they are shown. The only additional modeling information required
to build a running model is the interarrival time of patients.
Getting a basic model up and running early in a simulation project helps
hold the interest of stakeholders. It also helps identify missing information and
moti- vates team members to try to fill in these information gaps. Additional
questions about the operation of the system are usually raised once a basic
model is running. Some of the questions that begin to be asked are Have all of
the routings been accounted for? and Have any entities been overlooked? In
essence, modeling the system actually helps define and validate system data.

6.5.3 Defining Incidental Details and Refining Data Values

Once a basic model has been constructed and tested, additional details of the
process such as downtimes, setups, and work priorities can be added. This infor-
mation is not essential to getting a running model, but is necessary for a
complete and accurate model. Sometimes the decision of whether to include a
particular el- ement of the system such as a downtime is easier to make once the
basic model is running. The potential impact of the element and the time
available to implement it in the model are much clearer than at the start of the
project.
 134 Part I Study Chapters

At this point, any numerical values such as activity times, arrival rates, and
others should also be firmed up. Having a running model enables estimates and
other assumptions to be tested to see if it is necessary to spend additional time
get- ting more accurate information. For existing systems, obtaining more
accurate data is usually accomplished by conducting time studies of the activity
or event under investigation. A sample is gathered to represent all conditions
under which the activity or event occurs. Any biases that do not represent
normal operating conditions are eliminated. The sample size should be large
enough to provide an accurate picture yet not so large that it becomes costly
without really adding additional information.

6.6 Making Assumptions

A simulation model can run with incorrect data, but it can’t run with incomplete
data. Using an architectural metaphor, a computer model is less like an artist’s
rendition of a building and much more like a full set of blueprints—complete
with dimensions and material lists. This is one of the reasons why simulation
is so beneficial. It gets down to the operational details that actually define
how the system runs.
It doesn’t take long after data gathering has commenced to realize that
certain information is unavailable or perhaps unreliable. Complete, accurate,
and up-to- date information is rarely obtainable, especially when modeling a
new system about which little is known. Even for existing systems, it may be
impractical to obtain certain types of data, such as long time intervals between
machine failures. Because the reliability of information on new systems is often
questionable,
the validity of the model itself is going to be suspect. Accurate information is
going to be lacking in at least one or more areas of almost any model—even in
models of existing systems. Because a simulation nearly always is run for some
future anticipated situation, there are always going to be assumptions made re-
garding any unknown future conditions. In simulation, we must be content to
begin with assumptions and be grateful whenever we can make assertions.
Since a model that is based on assumptions is automatically invalid, the
ques- tion might be raised, What good is a simulation that is based on
assumptions? We forget that we routinely make decisions in life based on
assumptions and therefore can never be quite sure of the outcome. Any
prediction about how a system will operate in the future is based on
assumptions about the future. There is nothing wrong with making assumptions
when doing simulation as long as our confidence in the results never exceeds
our confidence in the underlying assumptions. The reason for doing simulation
is to be able to predict system performance based on given assumptions. It is
better to make decisions knowing the implications of our assumptions than to
compound the error of our decision by drawing erroneous inferences from
these assumptions. Incorporating assumptions into a model can actually help
validate our assumptions by seeing whether they make sense in the overall
operation of the model. Seeing absurd behavior may tell us that certain as-
sumptions just don’t make sense.
 Chapter 6 Data Collection and Analysis 135

For comparative studies in which two design alternatives are evaluated, the
fact that assumptions are made is less significant because we are evaluating
relative performance, not absolute performance. For example, if we are trying to
determine whether on-time deliveries can be improved by assigning tasks to a
resource by due date rather than by first-come, first-served, a simulation can pro-
vide useful information to make this decision without necessarily having com-
pletely accurate data. Because both models use the same assumptions, it may be
possible to compare relative performance. We may not know what the absolute
performance of the best option is, but we should be able to assess fairly
accurately how much better one option is than another.
Some assumptions will naturally have a greater influence on the validity of
a model than others. For example, in a system with large processing times
com- pared to move times, a move time that is off by 20 percent may make
little or no difference in system throughput. On the other hand, an activity time
that is off by 20 percent could make a 20 percent difference in throughput. One
way to assess the influence of an assumption on the validity of a model is
through sensitivity analysis. Sensitivity analysis, in which a range of values is
tested for potential im- pact on model performance, can indicate just how
accurate an assumption needs to be. A decision can then be made to firm up the
assumption or to leave it as is. If, for example, the degree of variation in a
particular activity time has little or no impact on system performance, then a
constant activity time may be used. At the other extreme, it may be found that
even the type of distribution has a noticeable impact on model behavior and
therefore needs to be selected carefully.
A simple approach to sensitivity analysis for a particular assumption is to
run three different scenarios showing (1) a “best” or most optimistic case,
(2) a “worst” or most pessimistic case, and (3) a “most likely” or best-guess
case. These runs will help determine the extent to which the assumption
influences model behavior. It will also help assess the risk of relying on the
particular assumption.

6.7 Statistical Analysis of Numerical Data

To be of use in a simulation model, raw data must be analyzed and interpreted so
that the system operation is correctly represented in the model. Triggering events
and other cause-and-effect relationships need to be identified. Irrelevant or
insignificant data need to be discarded. Actual activity times need to be
isolated from system-caused delays. The numerous instances of a particular
activity need to be generalized into a few defining patterns. Complex
operation descriptions need to be translated into simplified abstractions. Input
or defining system vari- ables need to be separated from output or response
variables. Finally, summarized historical data should be projected forward to the
time period being studied by the simulation. Information to help adjust data for
the future can be obtained from sales forecasts, market trends, or business
plans.
Prior to developing a representation of the data, the data should be analyzed
to ascertain their suitability for use in the simulation model. Data characteristics
such as independence (randomness), homogeneity (the data come from the same
136 Part I Study Chapters

FIGURE 6.3
Descriptive
statistics for a
sample data set of
100 observations.

TABLE 6.2 100 Observed Inspection Times (Minutes)

0.99 0.41 0.89 0.59 0.98 0.47 0.70 0.94 0.39 0.92
1.30 0.67 0.64 0.88 0.57 0.87 0.43 0.97 1.20 1.50
1.20 0.98 0.89 0.62 0.97 1.30 1.20 1.10 1.00 0.44
0.67 1.70 1.40 1.00 1.00 0.88 0.52 1.30 0.59 0.35
0.67 0.51 0.72 0.76 0.61 0.37 0.66 0.75 1.10 0.76
0.79 0.78 0.49 1.10 0.74 0.97 0.93 0.76 0.66 0.57
1.20 0.49 0.92 1.50 1.10 0.64 0.96 0.87 1.10 0.50
0.60 1.30 1.30 1.40 1.30 0.96 0.95 1.60 0.58 1.10
0.43 1.60 1.20 0.49 0.35 0.41 0.54 0.83 1.20 0.99
1.00 0.65 0.82 0.52 0.52 0.80 0.72 1.20 0.59 1.60

distribution), and stationarity (the distribution of the data doesn’t change with
time) should be determined. Using data analysis software such as Stat::Fit, data
sets can be automatically analyzed, tested for usefulness in a simulation, and
matched to the best-fitting underlying distribution. Stat::Fit is bundled with
ProModel and can be accessed from the Tools menu after opening ProModel. To
illustrate how data are analyzed and converted to a form for use in simulation,
let’s take a look at a data set containing 100 observations of an inspection
operation time, shown in Table 6.2. By entering these data or importing them
from a file into Stat::Fit, a descrip-
tive analysis of the data set can be performed. The summary of this analysis is
displayed in Figure 6.3. These parameters describe the entire sample collection.
Because reference will be made later to some of these parameters, a brief defini-
tion of each is given below.
Mean—the average value of the data.
Median—the value of the middle observation when the data are sorted in
ascending order.
Chapter 6 Data Collection and Analysis 137

Mode—the value that occurs with the greatest frequency.

Standard deviation—a measure of the average deviation from the mean.
Variance—the square of the standard deviation.
Coefficient of variation—the standard deviation divided by the mean. This
value provides a relative measure of the standard deviation to the mean.
Skewness—a measure of symmetry. If the maximum data value is farther
from the mean than the minimum data value, the data will be skewed to the
right, or positively skewed. Otherwise they are skewed to the left, or
negatively skewed.
Kurtosis—a measure of the flatness or peakedness of the distribution.
Another value of interest is the range, which is simply the difference between
the maximum and minimum values.
A descriptive analysis tells us key characteristics about the data set, but it
does not tell us how suitable the data are for use in a simulation model. What we
would like to be able to do is fit a theoretical distribution, such as a normal or
beta distri- bution, to the sample data set. This requires that the data be
independent (truly random) and identically distributed (they all come from the
same distribution). When gathering data from a dynamic and possibly time-
varying system, one must be sensitive to trends, patterns, and cycles that may
occur with time. The sample data points may be somewhat codependent, or
they may come from multiple sources and therefore may not be identically
distributed. Specific tests can be per- formed to determine whether data are
independent and identically distributed.

6.7.1 Tests for Independence

Data are independent if the value of one observation is not influenced by the
value of another observation. Dependence is common in sampling from a finite
popula- tion when sampling is performed without replacement. For example, in
sampling from a deck of cards to find the probability of drawing an ace, the
probability of the next card being an ace increases with each draw that is not an
ace. The proba- bility of drawing an ace 52 in the first draw is 4 . If no ace is
4
drawn, the probability of drawing an ace51 in the second draw is . If, however,
the drawn card is replaced each time, the probability
52 remains the same ( 4 ) for
each draw.
For very large or infinite populations such as ongoing activities or repeating
events, data dependence usually manifests itself when the value of an
observation is influenced by the value of the previous observation. In sampling
the probability that an item will be defective, for example, sometimes there is a
greater probabil- ity of a defective item occurring if the previous item was
defective (defectives fre- quently occur in waves). Perhaps the time to perform a
manual cutting operation increases each time due to the blade becoming dull.
Finally, when the blade is sharpened, the activity time is reduced back to the
original starting time. When the value of an observation is dependent on the
value of a previous observation, the data are said to be correlated. Table 6.3
shows outdoor temperature recordings taken randomly throughout the day from
8:00 A.M. to 8:00 P.M. (read left to right). As would be expected, sampled
temperatures are not independent because they depend largely on the time of
day.
138 Part I Study Chapters

TABLE 6.3 100 Outdoor Temperature Readings from 8:00 A.M. to 8:00 P.M.

57 57 58 59 59 60 60 62 62 62
63 63 64 64 65 66 66 68 68 69
70 71 72 72 73 74 73 74 75 75
75 75 76 77 78 78 79 80 80 81
80 81 81 82 83 83 84 84 83 84
83 83 83 82 82 81 81 80 81 80
79 79 78 77 77 76 76 75 74 75
75 74 73 73 72 72 72 71 71 71
71 70 70 70 70 69 69 68 68 68
67 67 66 66 66 65 66 65 65 64

Several techniques are used to determine data dependence or correlation.

Three techniques discussed here include the scatter plot, autocorrelation plot,
and runs test. Any of these procedures can be performed on data sets using
Stat::Fit. They are each specific to different scales of randomness, so all must be
passed to conclude data independence. The scatter plot and autocorrelation
plot are para- metric statistical tests in which the nature of the plot depends on
the underlying distribution of the data. The runs test is nonparametric and makes
no assumption about the distribution of the data. We explain how each is used.

Scatter Plot
This is a plot of adjacent points in the sequence of observed values plotted
against each other. Thus each plotted point represents a pair of consecutive
observations (Xi, Xi+1) for i = 1, 2, . . . , n − 1. This procedure is repeated for
all adjacent data points so that 100 observations would result in 99 plotted
points. If the Xi’s are independent, the points will be scattered randomly. If,
however, the data are dependent on each other, a trend line will be apparent.
If the Xi’s are positively correlated, a positively sloped trend line will appear.
Negatively correlated Xi’s will produce a negatively sloped line. A scatter
plot is a simple way to detect strongly dependent behavior.
Figure 6.4 shows a plot of paired observations using the 100 inspection
times from Table 6.2. Notice that the points are scattered randomly with no
defined pat- tern, indicating that the observations are independent.
Figure 6.5 is a plot of the 100 temperature observations shown in Table 6.3.
Notice the strong positive correlation.

Autocorrelation Plot
If observations in a sample are independent, they are also uncorrelated.
Correlated data are dependent on each other and are said to be autocorrelated. A
measure of the autocorrelation, rho (ρ), can be calculated using the equation
n− j
)( xi −x¯ )(xi j −x¯ )
+
ρ=
i =1
o 2(n −j)
 Chapter 6 Data Collection and Analysis 139

FIGURE 6.4
Scatter plot
showing
uncorrelated data.

FIGURE 6.5
Scatter plot showing
correlated temperature
data.

where j is the lag or distance between data points; σ is the standard deviation of
the population, approximated by the standard deviation of the sample; and X¯ is
the sample mean. The calculation is carried out to 15 of the length of the data set,
where diminishing pairs start to make the calculation unreliable.
This calculation of autocorrelation assumes that the data are taken from a
sta- tionary process; that is, the data would appear to come from the same
distribution regardless of when the data were sampled (that is, the data are time
invariant). In the case of a time series, this implies that the time origin may be
shifted without
140 Part I Study Chapters

FIGURE 6.6
Autocorrelatio
n graph
showing
noncorrelation.

FIGURE 6.7
Autocorrelation
graph showing
correlation.

affecting the statistical characteristics of the series. Thus the variance for the
whole sample can be used to represent the variance of any subset. If the
process being studied is not stationary, the calculation of autocorrelation is more
complex.
The autocorrelation value varies between 1 and −1 (that is, between positive
and negative correlation). If the autocorrelation is near either extreme, the data
are autocorrelated. Figure 6.6 shows an autocorrelation plot for the 100
inspection time observations from Table 6.2. Notice that the values are near zero,
indicating
 Chapter 6 Data Collection and Analysis 141

FIGURE 6.8
Runs test based on
points above and
below the median
and number of
turning points.

little or no correlation. The numbers in parentheses below the x axis are the max-
imum autocorrelation in both the positive and negative directions.
Figure 6.7 is an autocorrelation plot for the sampled temperatures in
Table 6.3. The graph shows a broad autocorrelation.

Runs Tests
The runs test looks for runs in the data that might indicate data correlation. A
run in a series of observations is the occurrence of an uninterrupted sequence of
num- bers showing the same trend. For instance, a consecutive set of
increasing or decreasing numbers is said to provide runs “up” or “down”
respectively. Two types of runs tests that can be made are the median test and
the turning point test. Both of these tests can be conducted automatically on data
using Stat::Fit. The runs test for the 100 sample inspection times in Table 6.2 is
summarized in Figure 6.8. The result of each test is either do not reject the
hypothesis that the series is random
142 Part I Study Chapters

or reject that hypothesis with the level of significance given. The level of signifi-
cance is the probability that a rejected hypothesis is actually true—that is, that
the test rejects the randomness of the series when the series is actually random.
The median test measures the number of runs—that is, sequences of num-
bers, above and below the median. The run can be a single number above or
below the median if the numbers adjacent to it are in the opposite direction. If
there are too many or too few runs, the randomness of the series is rejected.
This median runs test uses a normal approximation for acceptance or rejection
that requires that the number of data points above or below the median be
greater than 10.
The turning point test measures the number of times the series changes
direc- tion (see Johnson, Kotz, and Kemp 1992). Again, if there are too many
turning points or too few, the randomness of the series is rejected. This turning
point runs test uses a normal approximation for acceptance or rejection that
requires more than 12 data points.
While there are many other runs tests for randomness, some of the most
sen- sitive require larger data sets, in excess of 4,000 numbers (see Knuth 1981).
The number of runs in a series of observations indicates the randomness
of those observations. A few runs indicate strong correlation, point to point.
Several runs may indicate cyclic behavior.

6.7.2 Tests for Identically Distributed Data

When collecting sample data, often it is necessary to determine whether the data
in a single data set come from the same population (they are identically distrib-
uted) or whether they represent multiple populations. In other instances, it is
desirable to determine whether two or more data sets can be treated as having
come from the same population or whether they need to be kept as separate pop-
ulations. There are several ways to determine whether data come from the same
population. These are sometimes called tests for homogeneity.
Let’s look at the first case of determining whether data from a single data set
are identically distributed. The first inclination when gathering data defining a
particular activity time or event interval is to assume that they are identically
dis- tributed. Upon closer examination, however, it is sometimes discovered that
they are actually nonhomogeneous data. Examples of data sets that tend to be
nonho- mogeneous include
• Activity times that are longer or shorter depending on the type of entity
being processed.
• Interarrival times that fluctuate in length depending on the time of day or
day of the week.
• Time between failures and time to repair where the failure may result
from a number of different causes.
In each of these instances, the data collected may actually represent multiple
populations.
Testing to see if data are identically distributed can be done in several ways.
One approach is to visually inspect the distribution to see if it has more than one
mode. You may find, for example, that a plot of observed downtime values is
 Chapter 6 Data Collection and Analysis 143

bimodal, as shown in Figure 6.9. The fact that there are two clusters of data indi-
cates that there are at least two distinct causes of downtimes, each producing
different distributions for repair times. Perhaps after examining the cause of the
downtimes, it is discovered that some were due to part jams that were
quickly fixed while others were due to mechanical failures that took longer to
repair.
One type of nonhomogeneous data occurs when the distribution changes
over time. This is different from two or more distributions manifesting
themselves over the same time period such as that caused by mixed types of
downtimes. An exam- ple of a time-changing distribution might result from an
operator who works 20 per- cent faster during the second hour of a shift than
during the first hour. Over long pe- riods of time, a learning curve phenomenon
occurs where workers perform at a faster rate as they gain experience on the
job. Such distributions are called nonsta- tionary or time variant because of their
time-changing nature. A common example of a distribution that changes with
time is the arrival rate of customers to a service facility. Customer arrivals to a
bank or store, for example, tend to occur at a rate that fluctuates throughout the
day. Nonstationary distributions can be detected by plot- ting subgroups of data
that occur within successive time intervals. For example, sampled arrivals
between 8 A.M. and 9 A.M. can be plotted separately from arrivals between 9
A.M. and 10 A.M., and so on. If the distribution is of a different type or is the
same distribution but shifted up or down such that the mean changes value over
time, the distribution is nonstationary. This fact will need to be taken into
account when defining the model behavior. Figure 6.10 is a plot of customer
arrival rates for a department store occurring by half-hour interval between 10
A.M. and 6 P.M.
Frequency of occurrence

FIGURE 6.9
Bimodal distribution
of downtimes Part jams
Mechanical failures
indicating multiple
causes.

Repair time

FIGURE 6.10
Rate of arrival

Change in rate of
customer arrivals
between 10 A.M.
and 6 P.M.

10:00 A.M. 12:00 noon 2:00 P.M. 4:00 P.M. 6:00 P.M.
Time of day
 144 Part I Study Chapters

Note that while the type of distribution (Poisson) is the same for each period, the
rate (and hence the mean interarrival time) changes every half hour.
The second case we look at is where two sets of data have been gathered
and we desire to know whether they come from the same population or are
identically dis- tributed. Situations where this type of testing is useful include
the following:
• Interarrival times have been gathered for different days and you want to
know if the data collected for each day come from the same distribution.
• Activity times for two different operators were collected and you want to
know if the same distribution can be used for both operators.
• Time to failure has been gathered on four similar machines and you are
interested in knowing if they are all identically distributed.
One easy way to tell whether two sets of data have the same distribution is
to run Stat::Fit and see what distribution best fits each data set. If the same
distribu- tion fits both sets of data, you can assume that they come from the
same popula- tion. If in doubt, they can simply be modeled as separate
distributions.
Several formal tests exist for determining whether two or more data sets can
be assumed to come from identical populations. Some of them apply to
specific families of distributions such as analysis of variance (ANOVA) tests for
normally distributed data. Other tests are distribution independent and can be
applied to compare data sets having any distribution, such as the Kolmogorov-
Smirnov two- sample test and the chi-square multisample test (see Hoover and
Perry 1990). The Kruskal-Wallis test is another nonparametric test because no
assumption is made about the distribution of the data (see Law and Kelton
2000).

6.8 Distribution Fitting

Once numerical data have been tested for independence and correlation, they
can be converted to a form suitable for use in the simulation model. Sample
numerical data that have been gathered on activity times, arrival intervals, batch
quantities, and so forth can be represented in a simulation model in one of three
ways. First, the data can be used exactly the way they were recorded. Second, an
empirical distribution can be used that characterizes the data. The third and
preferred method is to select a theoretical distribution that best fits the data.
Using the data exactly as they were recorded is relatively straightforward
but problematic. During the simulation, data values are read directly from the
sample data file in the order in which they were collected. The problem with
this tech- nique is that the data set is usually not large enough to represent the
population. It also presents a problem for running multiple replications of a
simulation experi- ment because a separate data set, which usually isn’t
available, is needed for each replication. Sample data sets tend to be used
directly in a simulation when they are sampled data from another related
simulation model from which it receives its input. This is a model partitioning
technique sometimes used in simulating large systems. The exit times for
entities in one simulation become the arrival stream used for the model into
which it feeds.
Chapter 6 Data Collection and Analysis 145

Using an empirical distribution in ProModel requires that the data be con-

verted to either a continuous or discrete frequency distribution. A continuous
frequency distribution summarizes the percentage of values that fall within
given intervals. In the case of a discrete frequency distribution, it is the percent-
age of times a particular value occurs. For continuous frequency distributions
the intervals need not be of equal width. During the simulation, random variates
are generated using a continuous, piecewise-linear empirical distribution func-
tion based on the grouped data (see Law and Kelton, 2000). The drawbacks to
using an empirical distribution as input to a simulation are twofold. First, an in-
sufficient sample size may create an artificial bias or “choppiness” in the distri-
bution that does not represent the true underlying distribution. Second, empirical
distributions based on a limited sample size often fail to capture rare extreme
values that may exist in the population from which they were sampled. As a
gen- eral rule, empirical distributions should be used only for rough-cut
modeling or when the shape is very irregular and doesn’t permit a good
distribution fit.
Representing the data using a theoretical distribution involves fitting a theo-
retical distribution to the data. During the simulation, random variates are gener-
ated from the probability distribution to provide the simulated random values.
Fitting a theoretical distribution to sample data smooths artificial irregularities in
the data and ensures that extreme values are included. For these reasons, it is
best to use theoretical distributions if a reasonably good fit exists. Most popular
simu- lation software provide utilities for fitting distributions to numerical
data, thus relieving the modeler from performing this complicated procedure.
A modeler should be careful when using a theoretical distribution to
ensure that if an unbounded distribution is used, the extreme values that
can be generated are realistic. Techniques for controlling the range of
unbounded distributions in a simulation model are presented in Chapter 7.

6.8.1 Frequency Distributions

Regardless of whether an empirical or theoretical distribution is used, it is a
good idea to construct a frequency distribution to get a summary view of the
data. Then a fitness test can be conducted to evaluate whether a standard
theoretical distribution, such as a normal distribution, fits the data. A frequency
distribution groups or bins the data into intervals or cells according to frequency
of occurrence. Showing the frequency with which values occur within each cell
gives a clear idea of how ob- servations are distributed throughout the range of
the data. Frequency distributions may be either discrete or continuous.

Discrete Frequency Distributions

A discrete frequency distribution is limited to specific values. That is, only fre-
quencies of a finite set of specific values are shown. To illustrate a discrete fre-
quency distribution, suppose a sample is collected on the number of customer
entries to a fast-food restaurant per five-minute interval. Table 6.4 summarizes
these observations, which were made during lunchtime (between 11 A.M. and
1 P.M.) for five workdays over a 20-week period.
146 Part I Study Chapters

TABLE 6.4 Data for Customer Arrival at a Restaurant

Arrivals Arrivals
per 5-Minute Interval Frequency per 5-Minute Interval Frequency

0 15 6 7
1 11 7 4
2 19 8 5
3 16 9 3
4 8 10 3
5 8 11 1

Frequency distributions can be graphically shown using a histogram. A

his- togram depicting the discrete frequency distribution in Table 6.4 is
shown in Figure 6.11.

Continuous Frequency Distributions

A continuous frequency distribution defines ranges of values within which
sample values fall. Going back to our inspection time sample consisting of 100
observa- tions, we can construct a continuous distribution for these data because
values can take on any value within the interval specified. A frequency
distribution for the data has been constructed using Stat::Fit (Figure 6.12).
Note that a relative frequency or density is shown (third column) as well as
cumulative (ascending and descending) frequencies. All of the relative densities
add up to 1, which is verified by the last value in the ascending cumulative fre-
quency column.
A histogram based on this frequency distribution was also created in
Stat::Fit and is shown in Figure 6.13.
Note that the frequency distribution and histogram for our sample
inspection times are based on dividing the data into six even intervals or cells.
While there are guidelines for determining the best interval or cell size, the
most important thing is to make sure that enough cells are defined to show a
gradual transition in values, yet not so many cells that groupings become
obscured. The number of in- tervals should be based on the total number of
observations and the variance in the data. One rule of thumb is to set the number
1
of intervals to the cube root of twice the number of samples—that is, (2N ) 3 .
This is the default method used in Stat::Fit. The goal is to use the minimum
number of intervals possible without los- ing information about the spread of the
data.

6.8.2 Theoretical Distributions

As mentioned earlier, it may be appropriate to use the frequency distribution in
the simulation model as it is, as an empirical distribution. Whenever possible,
however, the underlying distribution from which the sample data came should be
determined. This way the actual distribution of the population can be used to
 Chapter 6 Data Collection and Analysis 147

FIGURE 6.11
Histogram showing arrival count per five-minute interval.

20

15
Frequency

10

0
0 1 2 3 4 5 6 7 8 9 10 11
Arrival count

FIGURE 6.12
Frequency distribution for 100 observed inspection times.
148 Part I Study Chapters

FIGURE 6.13
Histogram distribution
for 100 observed
inspection times.

generate random variates in the simulation rather than relying only on a

sampling of observations from the population. Defining the theoretical
distribution that best fits sample data is called distribution fitting. Before
discussing how theoretical distributions are fit to data, it is helpful to have a
basic understanding of at least the most common theoretical distributions.
There are about 12 statistical distributions that are commonly used in sim-
ulation (Banks and Gibson 1997). Theoretical distributions can be defined by a
simple set of parameters usually defining dispersion and density. A normal
distri- bution, for example, is defined by a mean value and a standard
deviation value. Theoretical distributions are either discrete or continuous,
depending on whether a finite set of values within the range or an infinite
continuum of possible values within a range can occur. Discrete distributions are
seldom used in manufacturing and service system simulations because they
can usually be defined by simple probability expressions. Below is a
description of a few theoretical distributions sometimes used in simulation.
These particular ones are presented here purely be- cause of their familiarity and
ease of understanding. Beginners to simulation usu- ally feel most comfortable
using these distributions, although the precautions given for their use should
be noted. An extensive list of theoretical distributions and their applications is
given in Appendix A.

Binomial Distribution
The binomial distribution is a discrete distribution that expresses the probability
( p) that a particular condition or outcome can occur in n trials. We call an
oc- currence of the outcome of interest a success and its nonoccurrence a
failure. For a binomial distribution to apply, each trial must be a Bernoulli
trial: it must
 Chapter 6 Data Collection and Analysis 149

be independent and have only two possible outcomes (success or failure),

and the probability of a success must remain constant from trial to trial. The
mean of a binomial distribution is given by np, where n is the number of
trials and p is the probability of success on any given trial. The variance
is given by np(1 − p).
A common application of the binomial distribution in simulation is to test
for the number of defective items in a lot or the number of customers of a
particular type in a group of customers. Suppose, for example, it is known that
the probabil- ity of a part being defective coming out of an operation is .1 and
we inspect the parts in batch sizes of 10. The number of defectives for any
given sample can be determined by generating a binomial random variate. The
probability mass func- tion for the binomial distribution in this example is
shown in Figure 6.14.

Uniform Distribution
A uniform or rectangular distribution is used to describe a process in which
the outcome is equally likely to fall between the values of a and b. In a
uniform distribution, the mean is (a + b)/2. The variance is expressed by (b
− a)2/12. The probability density function for the uniform distribution is
shown in Figure 6.15.

FIGURE 6.14
0.6
The probability
mass function of 0.5
a binomial
distribution 0.4
p(x)

(n = 10, p = .1). 0.3

0.2

0.1

0
0 1 2 3 4 5 6 7 8 9 10
x

FIGURE 6.15
The probability
density function of a f (x)
uniform distribution.

a b
x
150 Part I Study Chapters

FIGURE 6.16
The probability density
function of a
triangular
distribution. f (x)

a m b
x

The uniform distribution is often used in the early stages of simulation pro-
jects because it is a convenient and well-understood source of random variation.
In the real world, it is extremely rare to find an activity time that is uniformly
distributed because nearly all activity times have a central tendency or mode.
Sometimes a uniform distribution is used to represent a worst-case test for varia-
tion when doing sensitivity analysis.

Triangular Distribution
A triangular distribution is a good approximation to use in the absence of
data, es- pecially if a minimum, maximum, and most likely value (mode) can
be estimated. These are the three parameters of the triangular distribution. If
a, m, and b repre- sent the minimum, mode, and maximum values
respectively of a triangular distri- bution, then the mean of a triangular
distribution is (a + m + b)/3. The variance is defined by (a2 + m 2 + b2 −
am − ab − mb)/18. The probability density func- tion for the triangular
distribution is shown in Figure 6.16.
The weakness of the triangular distribution is that values in real activity
times rarely taper linearly, which means that the triangular distribution will
probably create more variation than the true distribution. Also, extreme values
that may be rare are not captured by a triangular distribution. This means that
the full range of values of the true distribution of the population may not be
represented by the tri- angular distribution.

Normal Distribution
The normal distribution (sometimes called the Gaussian distribution) describes
phenomena that vary symmetrically above and below the mean (hence the bell-
shaped curve). While the normal distribution is often selected for defining ac-
tivity times, in practice manual activity times are rarely ever normally
distributed. They are nearly always skewed to the right (the ending tail of the
distribution is longer than the beginning tail). This is because humans can
sometimes take sig- nificantly longer than the mean time, but usually not
much less than the mean
 Chapter 6 Data Collection and Analysis 151

FIGURE 6.17
The probability density
function for a normal
distribution.

f (x)

time. Examples of normal distributions might be

• Physical measurements—height, length, diameter, weight.
• Activities involving multiple tasks (like loading a truck or filling a
customer order).
The mean of the normal distribution is designated by the Greek letter mu (µ).
The variance is σ 2 where σ (sigma) is the standard deviation. The probability
density function for the normal distribution is shown in Figure 6.17.

Exponential Distribution
Sometimes referred to as the negative exponential, this distribution is used fre-
quently in simulations to represent event intervals. The exponential distribution
is defined by a single parameter, the mean (µ). This distribution is related to
the Poisson distribution in that if an occurrence happens at a rate that is Poisson
dis- tributed, the time between occurrences is exponentially distributed. In
other words, the mean of the exponential distribution is the inverse of the
Poisson rate. For example, if the rate at which customers arrive at a bank is
Poisson distributed with a rate of 12 per hour, the time between arrivals is
exponentially distributed with a mean of 5 minutes. The exponential
distribution has a memoryless or forgetfulness property that makes it well
suited for modeling certain phenomena that occur independently of one
another. For example, if arrival times are expo- nentially distributed with a
mean of 5 minutes, then the expected time before the next arrival is 5 minutes
regardless of how much time has elapsed since the pre- vious arrival. It is as
though there is no memory of how much time has already elapsed when
predicting the next event—hence the term memoryless. Examples
152 Part I Study Chapters

FIGURE 6.18
The probability density
function for an
exponential
distribution.

f (x )

of this distribution are

• Time between customer arrivals at a bank.
• Duration of telephone conversations.
• Time between arrivals of planes at a major airport.
• Time between failures of certain types of electronic devices.
• Time between interrupts of the CPU in a computer system.
For an exponential distribution, the variance is the same as the mean. The
prob- ability density function of the exponential distribution is shown in Figure
6.18.

6.8.3 Fitting Theoretical Distributions to Data

Fitting a theoretical distribution to data is essentially an attempt to identify the
underlying distribution from which the data were generated. Finding the best
distribution that fits the sample data can be quite complicated and is not an exact
science. Fortunately, software such as Stat::Fit (accessible under the ProModel
Tools menu) is available for automatically fitting distributions. Lab 6 at the end
of the book provides exercises on how to use Stat::Fit. Distribution fitting soft-
ware follows basically the same procedures as we discuss next for manual fit-
ting. Many software tools provide the added benefit of being able to iterate
through all applicable distributions searching for the best fit. Figure 6.19 shows
a relative ranking in Stat::Fit of how well different distributions fit the observed
inspection times in Table 6.2.
Distribution fitting is largely a trial-and-error process. The basic procedure
consists of three steps: (1) one or more distributions are selected as candidates
for being good fits to the sample data; (2) estimates of the parameters for each
distri- bution must be calculated; and (3) goodness-of-fit tests are performed to
ascertain how well each distribution fits the data.
 Chapter 6 Data Collection and Analysis 153

FIGURE 6.19
Ranking distributions by goodness of fit for inspection time data set.

Choosing a distribution that appears to be a good fit to the sample data

requires a basic knowledge of the types of distributions available and their
properties. It is also helpful to have some intuition about the variable whose
data are being fit. Sometimes creating a histogram of the data can reveal
important characteristics about the distribution of the data. If, for example, a
histogram of sampled assembly times appears symmetric on either side of the
mean, a normal distribution may be inferred. Looking at the histogram in Figure
6.13, and knowing the basic shapes of different theoretical distributions, we
might hypothesize that the data come from a beta, lognormal, or perhaps even a
triangular distribution.
After a particular type of distribution has been selected, we must estimate the
defining parameter values of the distribution based on the sample data. In the
case of a normal distribution, the parameters to be estimated are the mean and
standard deviation, which can be estimated by simply calculating the average
and standard deviation of the sample data. Parameter estimates are generally
calculated using moment equations or the maximum likelihood equation (see
Law and Kelton 2000).
Once a candidate distribution with its associated parameters has been
defined, a goodness-of-fit test can be performed to evaluate how closely the
distribution fits the data. A goodness-of-fit test measures the deviation of the
154 Part I Study Chapters

sample distribution from the inferred theoretical distribution. Three commonly

used goodness-of-fit tests are the chi-square (χ 2), the Kolmogorov-Smirnov,
and the Anderson-Darling tests (see Breiman 1973; Banks et al. 2001; Law and
Kelton 2000; Stuart and Ord 1991).
Each of these goodness-of-fit tests starts with the null hypothesis that the fit
is good and calculates a test statistic for comparison to a standard. To test this
null hypothesis, a level of significance value is selected, which is the
likelihood of making a type I error—that is, rejecting the null hypothesis when it
is true. Stated in a different manner, it is the probability that you will make a
mistake and reject a distribution that is actually a good fit. Therefore, the smaller
this value, the less likely you are to reject when you should accept.
The oldest and one of the most common statistical tests for goodness of fit
is the chi-square test. The chi-square, goodness-of-fit test is a versatile test that
can be used to perform hypothesis tests for either discrete or continuous
distributions. It is also a useful test to determine data independence (see
Chapter 3). The chi- square test basically compares the frequency distribution of
the sample data to the way the same number of data points would be distributed
if the data came from the inferred distribution. The chi-square, goodness-of-fit
test can be broken down into nine steps:
1. Analyze the data and infer an underlying distribution.
2. Create a frequency distribution of the data with equiprobable cells based
on the inferred distribution.
3. Calculate the expected frequency (ei ) for each cell.
4. Adjust cells if necessary so that all expected frequencies are at least 5.
5. Calculate the chi-square test statistic.
6. Determine the number of degrees of freedom (k − 1).
7. Choose a desired level of significance (α).
8. Find the critical chi-square value from the chi-square table (Appendix D).
9. Reject the distribution if the chi-square statistic exceeds the critical value.
To illustrate how the chi-square, goodness-of-fit test is performed, let’s look at an
example problem in which 40 observations were made of activity times for a
bag- ging operation. These observations are shown in Table 6.5. What we would
like to know is what distribution best fits the data.
Step 1: Analyze the data and infer an underlying distribution. A
distribution should be chosen as a candidate for the true, underlying
distribution that has similar characteristics to those exhibited by the data. A
descriptive analysis, like the one described for the data in Table 6.2, can help
reveal some of the defining characteristics of the data. This includes
calculating parameters such as the mean, range, standard deviation, and so
on. If, for example, the mean and median are roughly the same, and the
standard deviation is roughly one-sixth of the range, we might infer that the
data are normally distributed. Constructing a histogram of the data like that
shown in Figure 6.13 can also be a good way to match a distribution to the
data.
Chapter 6 Data Collection and Analysis 155

TABLE 6.5 40 Observed Activity Times for a Bagging Operation

11.3 8.2 13.8 10.3

7.2 8.6 15.2 9.6
12.5 7.4 13.5 11.1
14.3 11.1 9.2 11.8
12.8 12.3 16.3 9.5
10.2 16.8 14.9 16.3
7.7 15.2 12.9 12.4
11.0 8.3 14.3 16.9
13.2 14.5 7.5 13.2
14.4 10.7 15.1 10.7

TABLE 6.6 Frequency Distribution for Bagging Times

Cel Observed H0 Probability H0 Expected (oi − ei )

2
l Interval Frequency (oi ) ( pi ) Frequency (ei )
(i ei
1 7–9 7 .20 8 0.125
2 9–11 7 .20 8 0.125
3 11–13 10 .20 8 0.50
4 13–15 8 .20 8 0
5 15–17 8 .20 8 0

For our example, the data appear to be evenly distributed throughout

the range, so we will hypothesize that the observations are uniformly
distributed between 7 and 17. This is our null hypothesis (H0). The
alternate hypothesis (H1) is that the observations are not uniformly
distributed between 7 and 17.
Step 2: Create a frequency distribution of the data with
equiprobable cells based on the inferred distribution. To create a
frequency distribution, recall that a good rule of thumb for determining
1
the appropriate number of cells (k) is k = (2n) 3 . Normally a frequency
distribution is divided into cells of equal intervals. When conducting a
chi-square test, however, it often works better if cell intervals have equal
probabilities rather than equal interval ranges. If, for example, you want
to create a frequency distribution with six cells for a particular data set,
and you suspect that the data come from a normal distribution, you
would create equiprobable intervals that each take in one-sixth of the
population of the corresponding1 normal distribution.
1
For this example, k = (2n) 3 = (2 × 40) 3 = 4.3 ≈ 5. Because we
are
assuming a uniform distribution in which equal interval widths also
have equal probabilities, we can divide the range into five equal
intervals each with a cell width of 10/5 = 2 and a probability of 1/5
= .20. For each
cell (i ), the resultant observed frequency (oi ) is shown in Table 6.6 together
156 Part I Study Chapters

with the hypothesized probability ( pi ). That each cell has a probability of

.2 based on a cell width of 2 can be verified by calculating the probability
of the first interval as
9
9 9
1 x 9 7 2
p(7 ≤ x < 9) = f (x ) dx dx =
= 10 10 7
= − = = .20.
7 10 10 10
7

For a uniform distribution the probabilities for all intervals are equal, so the
remaining intervals also have a hypothesized probability of .20.
Step 3: Calculate the expected frequency for each cell (ei). The expected
frequency (e) for each cell (i ) is the expected number of observations that
would fall into each interval if the null hypothesis were true. It is calculated
by multiplying the total number of observations (n) by the probability ( p)
that an observation would fall within each cell. So for each cell, the
expected frequency (ei ) equals npi .
In our example, since the hypothesized probability ( p) of each cell
is the same, the expected frequency for every cell is ei = npi = 40 × .2
= 8. Step 4: Adjust cells if necessary so that all expected frequencies
are at least 5. If the expected frequency of any cell is less than 5, the
cells must be adjusted. This “rule of five” is a conservative rule that
provides satisfactory validity of the chi-square test. When adjusting
cells, the easiest approach is to simply consolidate adjacent cells. After
any consolidation, the total number of cells should be at least 3;
otherwise you no longer have a meaningful differentiation of the data
and, therefore, will need to gather additional data. If you merge any
cells as the result of this step, you will need to adjust the observed
frequency, hypothesized probability, and expected frequency of those
cells accordingly.
In our example, the expected frequency of each cell is 8, which meets
the minimum requirement of 5, so no adjustment is necessary.
Step 5: Calculate the chi-square statistic. The equation for calculating the
2 = k
chi-square statistic is χ cal ),i (oi − ei )2/ei . If the fit is good the
=1
chi-square statistic will be small.
For our example,
5 2
2 ) (oi − ei )
=
χ calc i = .125 .125 .50 + 0 + = 0.75.
i =1 e + + 0
Step 6: Determine the number of degrees of freedom (k − 1). A
simple way of determining a conservative number of degrees of
freedom is to take the number of cells minus 1, or k − 1.
For our example, the number of degrees of freedom is
k − 1 = 5 − 1 = 4.
Note: The number of degrees of freedom is often computed to be
k − s − 1, where k is the number of cells and s is the number of
parameters estimated from the data for defining the distribution. So for a
normal distribution with two parameters (mean and standard deviation)
that are
Chapter 6 Data Collection and Analysis 157

estimated from the data, s = 2. In Stat::Fit the number of degrees of

freedom is assumed to be k − 1.
Step 7: Choose a desired level of significance (α). The significance level
is the probability of rejecting the null hypothesis when it is true—that is,
when the hypothesized distribution is correct. A typical level of
significance is .05; however, it could also be .10 or any other desired value.
For our example we will use a level of significance (α) of .05.
Step 8: Find the critical chi-square value from the chi-square
table. A chi-square table can be found in Appendix D. The critical
values in the chi-square table are based on the number of degrees of
freedom (k − 1) and the desired level of significance (α).
For our example,
χ2 =χ
2
= 9.488
k−1,α 4,0.05

Step 9: Reject the distribution if the chi-square statistic exceeds the

critical value. If the calculated test statistic is larger than the critical value
from the chi-square table, then the observed and expected values are not
close and the model is a poor fit to the data. Therefore, we reject H0 if
χ 2 > χ2
calc k−1,α .
For our example, 0.75 is not greater than 9.488; therefore, we fail to
reject H0, which means we can assume that a uniform distribution is a good
fit. If we are satisfied with our find we can terminate our testing; otherwise,
we can return to step 2 and try another distribution.
Note: While the test statistic for the chi-square test can be useful, the
p-value is actually more useful in determining goodness of fit. The p-value
is defined as the probability that another sample will compare the same as
the current sample given that the fit is appropriate. A small p-value
indicates that another sample would not likely compare the same, and
therefore, the fit should be rejected. Conversely, a high p-value indicates
that another sample would likely compare the same, and, therefore, the fit
should not
be rejected. Thus the higher the p-value, the more likely that the fit is
appropriate. When comparing two different distributions for goodness of
fit, the distribution with the higher p-value is likely to be the better fit
regardless of the level of significance. Most distribution-fitting software
uses the p-value for ranking goodness of fit.
If very few data are available, then a goodness-of-fit test is unlikely to reject
any candidate distribution. However, if a lot of data are available, then a
goodness-of-fit test may reject all candidate distributions. Therefore, failing to
reject a candidate distribution should be taken as one piece of evidence in favor
of the choice, while rejecting a particular distribution is only one piece of evi-
dence against the choice. Before making a decision, it is a good idea to look
at a graphical display that compares the theoretical distribution to a histogram
of the data. Figure 6.20, for example, overlays a beta distribution (the
distribution with the highest fit ranking for this particular data set) on top of a
histogram of the data.
 158 Part I Study Chapters

FIGURE 6.20
Visual comparison
between beta
distribution and a
histogram of the 100
sample inspection time
values.

6.9 Selecting a Distribution in the Absence of Data

There are a couple of ways to obtain reasonable estimates of system behavior
when no historical records exist or when direct measurement isn’t possible. The
best source is the people who have expertise in some aspect of the system being
modeled. Operators, maintenance personnel, vendors, and others who are
experi- enced in similar processes can often give good approximations of what
to expect in new but similar situations. In addition to getting expert opinions,
sometimes the nature of the process itself can indicate what to expect. For
example, in attempt- ing to select an appropriate distribution to represent a
manual task for which a most likely time has been estimated, experience has
shown that such tasks tend to have a triangular or beta distribution. As another
example, customer interarrival times tend to be exponentially distributed.
For numerical data such as activity times, estimates are usually given in one
of the following forms:
• A single most likely or mean value.
• Minimum and maximum values defining a range.
• Minimum, most likely, and maximum values.

6.9.1 Most Likely or Mean Value

Sometimes the only estimate that can be obtained for a system variable is a
mean or most likely value. This is a single “best guess” estimate of what the
value is.
Chapter 6 Data Collection and Analysis 159

Examples of single-value estimates include

• About 10 customer arrivals per hour.
• Approximately 20 minutes to assemble parts in a kit.
• Around five machine failures each day.
A simple sensitivity test for these types of estimates would be to increase
and decrease the value by 20 percent to see how much of a difference it
makes in the simulation results. One of the problems with single-value
estimates is that no consideration is given to possible variation. Fluctuations
in activity times can have a significant impact on model performance.
Sensitivity analysis should be performed looking at the potential impact of
variation. For example, if the esti- mated time for a manual activity is 1.2
minutes, a test run might be made using a normal distribution with a mean of
1.2 minutes and a somewhat large standard de- viation value of, say, .3
minute (the coefficient of variation = .25). Comparing this run with a run
using a constant value of 1.2 minutes will help determine how sensitive the
model is to variation in the activity time.

6.9.2 Minimum and Maximum Values

Sometimes only the range of values can be given as an estimate for a particular
variable. Examples of minimum and maximum values include
• 1.5 to 3 minutes to inspect items.
• 5 to 10 customer arrivals per hour.
• Four to six minutes to set up a machine.

Often a uniform distribution is used to represent a range of values because no

cen- tral tendency is specified. The problem with using a uniform distribution is
that it tends to give unrealistic weight to extreme values and therefore
exaggerates the random behavior beyond what it really is. A normal distribution
may be more ap- propriate in this situation because it recognizes that a higher
density of occur- rences exists near the mean. If a normal distribution is used,
1
the standard devia- tion could be
6 reasonably set at of the range. This ensures
that 99.73 percent of all values will fall within the specified range. So for a
time range of .25 to 1.75 minutes, a normal distribution could be used with a
mean of 1 minute and a stan- dard deviation of .25 minute (see Figure 6.21).

6.9.3 Minimum, Most Likely, and Maximum Values

The best estimate to obtain for a random variable when historical data can’t be
ob- tained is the minimum, most likely, and maximum values. Because most
activity times are not symmetrical about a mean, this type of estimate is
probably going to be the most realistic. Minimum, most likely, and maximum
values closely resem- ble a triangular or a beta distribution. Examples of
minimum, most likely, and
160 Part I Study Chapters

FIGURE 6.21
Normal distribution with mean = 1 and standard deviation = .25.

.25 .5 .75 1 1.25 1.50 1.75

FIGURE 6.22
A triangular
distribution with
minimum = 2,
mode = 5, and
maximum = 15.

2 5 15

maximum values might be

• 2 to 15 with most likely 5 minutes to repair a machine.
• 3 to 5 with most likely 2.5 minutes between customer arrivals.
• 1 to 3 with most likely 1.5 minutes to complete a purchase order.
Minimum, most likely, and maximum values can be easily set up as a triangular
dis- tribution. Looking at the first repair time example, if we fit these times to a
triangu- lar distribution, it would produce a minimum of 2 minutes, a mode of 5
minutes and a maximum of 15 minutes (see Figure 6.22).
Because these values are still based only on estimates, it is a good idea
to perform a sensitivity analysis, especially on the mode value (assuming the
minimum and maximum values represent best- and worst-case possibilities,
respectively).
 Chapter 6 Data Collection and Analysis 161

6.10 Bounded versus Boundless Distributions

Continuous theoretical distributions may be bounded (doubly or singly) or un-
bounded. An unbounded distribution can have values that go to either negative
or positive infinity. The normal distribution, for example, ranges from −to
+ and is therefore unbounded. A bounded distribution may be bounded at both
ends or only on one end. The exponential distribution, for example, is a
nonnegative distribution (it can’t take on negative values) and is therefore
bounded only on the lower end of the distribution. The uniform and triangular
distributions are doubly bounded, having both lower and upper boundaries.
Empirical continuous distrib- utions are always doubly bounded by the mere
fact that they are defined by a fi- nite number of cell intervals.
Sampling during a simulation from a boundless distribution may cause val-
ues to be generated that are unrealistic in real-world situations. An operation
time that is normally distributed with a mean of three minutes and a standard
deviation of one minute would have a possibility, for example, of being negative
on the low side as well as a remote chance of being absurdly large on the high
side. It is often desirable, therefore, to draw random samples during a
simulation from a truncated continuous distribution where either the lower or
upper tail is cut short. ProModel automatically converts negative values to 0
when an unbounded continuous distribution is specified for a time value. It has
no way of knowing, however, what a reasonably acceptable upper bound should
be. This must be spec- ified by the modeler. Lower and upper bounds can be
imposed on a distribution by simply screening for values outside of the
acceptable range. Either values gener- ated outside the acceptable range can be
rejected and another value generated or the generated value can be brought
within the acceptable value range.

6.11Modeling Discrete Probabilities

Using Continuous Distributions
Discrete probability distributions are used much less in simulation than continu-
ous probability distributions. Most discrete probabilities—such as the
probability of routing to a particular location or the probability of an item being
defective— are modeled using simple probability expressions like .34. In
simulation, most occasions for generating values from a discrete probability
distribution involve generating integer values rather than real values. For
example, the discrete ran- dom variable might represent the number of items in
a batch. One useful way to generate discretely distributed integer values is to
use a continuous distribution where fractions are simply truncated. In a
manufacturing system, for example, suppose that when filling containers or
pallets there is sometimes a remaining amount that fills only a partial container
or pallet. If a full pallet holds 20 boxes, the number of boxes on a partial pallet
would likely be uniformly distributed be- tween 1 and 19. To model the partial
pallet quantity, you would simply define a continuous uniform distribution
with a range between 1 and 20. A uniform
 162 Part I Study Chapters

random variable X will have values generated for X where min ≤ X < max. Thus
values will never be equal to the maximum value (in this case 20). Because gen-
erated values are automatically truncated when used in a context requiring an in-
teger, only integer values that are evenly distributed from 1 to 19 will occur (this
is effectively a discrete uniform distribution).

6.12 Data Documentation and Approval

When it is felt that all relevant data have been gathered, analyzed, and converted
into a usable form, it is advisable to document the data using tables, relational
di- agrams, and assumption lists. Sources of data should also be noted. This
docu- ment should then be reviewed by those in a position to evaluate the
validity of the data and approve the assumptions made. Where more formal
documentation is required, a separate document will need to be created. This
document will be helpful later if modifications need to be made to the model or
to analyze why the actual system ends up working differently than the
simulation.
In addition to identifying data used to build the model, the document should
also specify factors that were deliberately excluded from the model because they
were deemed insignificant or irrelevant. For example, if break times are not in-
cluded in the system description because of their perceived insignificance, the
document should state this. Justification for omissions should also be included if
necessary. Stating why certain factors are being excluded from the system de-
scription will help resolve later questions that may arise regarding the model
premises.
Reviewing and approving input data can be a time-consuming and difficult
task, especially when many assumptions are made. In practice, data validation
ends up being more of a consensus-building process where agreement is reached
that the information is good enough for the purposes of the simulation. The data
document is not a static document but rather a dynamic one that often changes
as model building and experimentation get under way. Much if not all of the
data documentation can be scripted right into the model. Most software
provides the capability to write comments in the model. Where more formal
documentation is required, a separate data document will need to be created.

6.12.1 Data Documentation Example

To illustrate how system data might be documented, imagine you have just col-
lected information for an assembly operation for three different monitor sizes.
Here is an example of how the data collected for this system might be
diagrammed and tabulated. The diagram and data should be sufficiently clear
and complete for those familiar with the system to validate the data and for a
model to be constructed. Re- view the data and see if they are sufficiently clear
to formulate a mental image of the system being modeled.
Chapter 6 Data Collection and Analysis 163

Objective
The objective of the study is to determine station utilization and throughput of the
system.

Entity Flow Diagram

Rejected monitors
19" & 21"
monitor
Station 1 Station 2 Inspection

19", 21", & 25"

monitors 21" monitor

Reworked
monitors
Station 3

Entities
19" monitor
21" monitor
25" monitor

Workstation Information

Workstation Buffer Capacity Defective Rate

Station 1 5 5%
Station 2 8 8%
Station 3 5 0%
Inspection 5 0%

Processing Sequence

Operating Time in Minutes

Entity Station (min, mode, max)

19" monitor Station 1 0.8, 1, 1.5

Station 2 0.9, 1.2, 1.8
Inspection 1.8, 2.2, 3
21" monitor Station 1 0.8, 1, 1.5
Station 2 1.1, 1.3, 1.9
Inspection 1.8, 2.2, 3
25" monitor Station 1 0.9, 1.1, 1.6
Station 2 1.2, 1.4, 2
Inspection 1.8, 2.3, 3.2
Station 3 0.5, 0.7, 1
164 Part I Study Chapters

Handling Defective Monitors

• Defective monitors are detected at inspection and routed to whichever
station created the problem.
• Monitors waiting at a station for rework have a higher priority than
first-time monitors.
• Corrected monitors are routed back to inspection.
• A reworked monitor has only a 2 percent chance of failing again, in
which case it is removed from the system.

Arrivals
A cartload of four monitor assemblies arrives every four hours normally
distrib- uted with a standard deviation of 0.2 hour. The probability of an arriving
monitor being of a particular size is

Monitor Size Probability

19" .6
21" .3
25" .1

Move Times
All movement is on an accumulation conveyor with the following times:

From To Time (seconds)

Station 1 Station 2 12
Station 2 Inspection 15
Inspection Station 3 12
Inspection Station 1 20
Inspection Station 2 14
Station 1 Inspection 18

Move Triggers
Entities move from one location to the next based on available capacity of the
input buffer at the next location.

Work Schedule
Stations are scheduled to operate eight hours a day.

Assumption List
• No downtimes (downtimes occur too infrequently).
• Dedicated operators at each workstation are always available during the
scheduled work time.
• Rework times are half of the normal operation times.
 Chapter 6 Data Collection and Analysis 165

Simulation Time and Replications

The simulation is run for 40 hours (10 hours of warm-up). There are five
replications.

6.13 Summary
Data for building a model should be collected systematically with a view of how
the data are going to be used in the model. Data are of three types: structural, op-
erational, and numerical. Structural data consist of the physical objects that
make up the system. Operational data define how the elements behave.
Numerical data quantify attributes and behavioral parameters.
When gathering data, primary sources should be used first, such as
historical records or specifications. Developing a questionnaire is a good way to
request in- formation when conducting personal interviews. Data gathering
should start with structural data, then operational data, and finally numerical
data. The first piece of the puzzle to be put together is the routing sequence
because everything else hinges on the entity flow.
Numerical data for random variables should be analyzed to test for indepen-
dence and homogeneity. Also, a theoretical distribution should be fit to the data
if there is an acceptable fit. Some data are best represented using an empirical
dis- tribution. Theoretical distributions should be used wherever possible.
Data should be documented, reviewed, and approved by concerned
individu- als. This data document becomes the basis for building the simulation
model and provides a baseline for later modification or for future studies.

6.14 Review Questions

1. Give two examples of structural data, operational data, and numerical
data to be gathered when building a model.
2. Why is it best to begin gathering data by defining entity routings?
3. Of the distributions shown in the chapter, which theoretical distribution
most likely would be representative of time to failure for a machine?
4. Why would a normal distribution likely be a poor representation of an
activity time?
5. Assume a new system is being simulated and the only estimate
available for a manual operation is a most likely value. How would you
handle this situation?
6. Under what circumstances would you use an empirical distribution
instead of a standard theoretical distribution for an activity time?
7. Why is the distribution for interarrival times often nonstationary?
8. Assuming you had historical data on truck arrivals for the past year,
how would you arrive at an appropriate arrival distribution to model the
system for the next six months?
166 Part I Study Chapters

9. A new machine is being considered for which the company has

no reliability history. How would you obtain the best possible
estimate of reliability for the machine?
10. Suppose you are interested in looking at the impact of having
workers inspect their own work instead of having a dedicated
inspection station. If this is a new system requiring lots of
assumptions to be made, how can simulation be useful in making
the comparison?
11.State whether the following are examples of a discrete
probability distribution or a continuous probability
distribution.
a. Activity times.
b. Batch sizes.
c. Time between arrivals.
d. Probability of routing to one of six possible destinations.
12.Conceptually, how would you model a random variable X that
represents an activity time that is normally distributed with a mean
of 10 minutes and a standard deviation of 3 minutes but is never
less than 8 minutes?
13. Using Stat::Fit, generate a list of 50 random values between
10 and 100. Choose the Scatter Plot option and plot the data. Now
put the data in ascending order using the Input/Operate commands
and plot the data. Explain the correlation, if any, that you see in
each scatter plot.
14. How can you check to see if a distribution in ProModel is
giving the right values?
15. Since many theoretical distributions are unbounded on the
bottom, what happens in ProModel if a negative value is sampled
for an activity time?
16. Go to a small convenience store or the university bookstore
and collect data on the interarrival and service times of customers.
Make histograms of the number of arrivals per time period and the
number of service completions per period. Note if these
distributions vary by the time of the day and by the day of the
week. Record the number of service channels available at all times.
Make sure you secure permission to perform the study.
17. The following are throughput time values for 30 simulation
runs. Calculate an estimate of the mean, variance, standard
deviation, and coefficient of variation for the throughput time.
Construct a histogram that has six cells of equal width.

10.7, 5.4, 7.8, 12.2, 6.4, 9.5, 6.2, 11.9, 13.1, 5.9, 9.6, 8.1, 6.3, 10.3,
11.5,
12.7, 15.4, 7.1, 10.2, 7.4, 6.5, 11.2, 12.9, 10.1, 9.9, 8.6, 7.9, 10.3, 8.3,
11.1

18. Customers calling into a service center are categorized

according to the nature of their problems. Five types of problem
categories (A
through E) have been identified. One hundred observations were made
 Chapter 6 Data Collection and Analysis 167

of customers calling in during a day, with a summary of the data shown

here. By inspection, you conclude that the data are most likely
uniformly distributed. Perform a chi-square goodness-of-fit test of this
hypothesis.

Type A B C D E

Observations 10 14 12 9 5

19.While doing your homework one afternoon, you notice that you are
frequently interrupted by friends. You decide to record the times
between interruptions to see if they might be exponentially distributed.
Here are 30 observed times (in minutes) that you have recorded;
conduct a goodness-of-fit test to see if the data are exponentially
distributed. (Hint: Use the data average as an estimate of the mean. For
the range, assume a range between 0 and infinity. Divide the cells based
on equal probabilities ( pi ) for each cell rather than equal cell
intervals.)

2.08 6.86 4.86 2.55 5.94

2.96 0.91 2.13 2.20 1.40
16.17 2.11 2.38 0.83 2.81
14.57 0.29 2.73 0.73 1.76
2.79 11.69 18.29 5.25 7.42
2.15 0.96 6.28 0.94 13.76

6.15 Case Study

COLLECTING AND DOCUMENTING DATA FOR

HARRY’S DRIVE-THROUGH RESTAURANT

This exercise is intended to help you practice sorting through and organizing data on a
ser- vice facility. The facility is a fast-food restaurant called Harry’s Drive-Through
and is shown on the next page.
Harry’s Drive-Through caters to two types of customers, walk-in and drive-through.
During peak times, walk-in customers arrive exponentially every 4 minutes and place
their order, which is sent to the kitchen. Nonpeak arrivals occur every 8–10 minutes. Cus-
tomers wait in a pickup queue while their orders are filled in the kitchen. Two workers are
assigned to take and deliver orders. Once customers pick up their orders, 60 percent
of the customers stay and eat at a table, while the other 40 percent leave with their
orders. There is seating for 30 people, and the number of people in each customer
party is one
168 Part I Study Chapters

Drive-through order

Kitchen

Drive-through
pickup

Pickup Order

Table area

40 percent of the time, two 30 percent of the time, three 18 percent of the time, four 10
percent of the time, and five 2 percent of the time. Eating time is normally distributed
with a mean of 15 minutes and a standard deviation of 2 minutes. If a walk-in customer
enters and sees that more than 15 customers are waiting to place their orders, the cus-
tomer will balk (that is, leave).
Harry’s is especially popular as a drive-through restaurant. Cars enter at a rate of 10
per hour during peak times, place their orders, and then pull forward to pick up their
orders. No more than five cars can be in the pickup queue at a time. One person is
dedicated to taking orders. If over seven cars are at the order station, arriving cars will
drive on.
The time to take orders is uniformly distributed between 0.5 minute and 1.2 minutes
in- cluding payment. Orders take an average of 8.2 minutes to fill with a standard
deviation of
1.2 minutes (normal distribution). These times are the same for both walk-in and drive-
through customers.
The objective of the simulation is to analyze performance during peak periods to see
how long customers spend waiting in line, how long lines become, how often customers
balk (pass by), and what the utilization of the table area is.

Problem
Summarize these data in table form and list any assumptions that need to be made in
order to conduct a meaningful simulation study based on the data given and objectives
specified.
 Chapter 6 Data Collection and Analysis 169

Reference
s
Banks, Jerry; John S. Carson II; Barry L. Nelson; and David M. Nicol. Discrete-Event
System Simulation. Englewood Cliffs, NJ: Prentice Hall, 2001.
Banks, Jerry, and Randall R. Gibson. “Selecting Simulation Software.” IIE Solutions, May
1997, pp. 29–32.
———. Stat::Fit. South Kent, CT: Geer Mountain Software Corporation, 1996.
Breiman, Leo. Statistics: With a View toward Applications. New York: Houghton Mifflin,
1973.
Brunk, H. D. An Introduction to Mathematical Statistics. 2nd ed. N.Y.: Blaisdell Publish-
ing Co. 1965.
Carson, John S. “Convincing Users of Model’s Validity Is Challenging Aspect of Mod-
eler’s Job.” Industrial Engineering, June 1986, p. 77.
Hoover, S. V., and R. F. Perry. Simulation: A Problem Solving Approach. Reading, MA,
Addison-Wesley, 1990.
Johnson, Norman L.; Samuel Kotz; and Adrienne W. Kemp. Univariate Discrete Distribu-
tions. New York: John Wiley & Sons, 1992, p. 425.
Knuth, Donald E. Seminumerical Algorithms. Reading, MA: Addison-Wesley, 1981.
Law, Averill M., and W. David Kelton. Simulation Modeling & Analysis. New York:
McGraw-Hill, 2000.
Stuart, Alan, and J. Keith Ord. Kendall’s Advanced Theory of Statistics. vol. 2. Cambridge:
Oxford University Press, 1991.
Harrell−Ghosh−Bo I. Study 7. Model © The
wden: Simulation Chapters Building McGraw−Hill
Using ProModel, Companies,
Second Edition

C H A P T E R

7 MODEL BUILDING

“Every theory [model] should be stated [built] as simply as possible, but

not simpler.”
—Albert Einstein

7.1 Introduction
In this chapter we look at how to translate a conceptual model of a system into a
simulation model. The focus is on elements common to both manufacturing and
service systems such as entity flow and resource allocation. Modeling issues
more specific to either manufacturing or service systems will be covered in later
chapters.
Modeling is more than knowing how to use a simulation software tool.
Learning to use modern, easy-to-use software is one of the least difficult aspects
of modeling. Indeed, current simulation software makes poor and inaccurate
mod- els easier to create than ever before. Unfortunately, software cannot make
deci- sions about how the elements of a particular system operate and how they
should interact with each other. This is the role of the modeler.
Modeling is considered an art or craft as much as a science. Knowing the
theory behind simulation and understanding the statistical issues are the science
part. But knowing how to effectively and efficiently represent a system using a
simulation tool is the artistic part of simulation. It takes a special knack to be
able to look at a system in the abstract and then creatively construct a
representative logical model using a simulation tool. If three different people
were to model the same system, chances are three different modeling
approaches would be taken. Modelers tend to use the techniques with which
they are most familiar. So the best way to develop good modeling skills is to
look at lots of good examples and, most of all, practice, practice, practice!
Skilled simulation analysts are able to quickly translate a process into a
simulation model and begin conducting experiments.

171
172 Part I Study Chapters

Consider the following statement by Robert Shannon (1998):

If you want to become proficient in an art you must take up the tools (palette,
canvas, paint, and brushes) and begin to paint. As you do so, you will begin to see
what works and what doesn’t. The same thing is true in simulation. You learn the art
of simulation by simulating. Having a mentor to help show you the way can
shorten the time and effort.

The purpose of this chapter is to provide a little mentoring by showing how

typical modeling issues are handled during simulation. Some of the questions
an- swered in this chapter include
• How do I convert a conceptual model to a simulation model?
• What is the relationship between model simplicity and model
usefulness?
• How do I determine which system elements to include in a model?
• How do I determine the best way to represent system elements in
a model?
• How are common situations modeled using simulation?
Because a simulation model relies on a simulation language for its expres-
sion, (and since this textbook is titled Simulation Using ProModel), ProModel
will be used to illustrate how system elements are modeled.
For the most part, the discussion of modeling issues in this chapter is kept at
a conceptual level. Specific modeling examples in ProModel can be found in
Lab 7 of Part II.

7.2 Converting a Conceptual Model to a Simulation Model

The conceptual model is the result of the data-gathering effort and is a formula-
tion in one’s mind (supplemented with notes and diagrams) of how a particular
system operates. Building a simulation model requires that this conceptual
model be converted to a simulation model. Making this translation requires two
impor- tant transitions in one’s thinking. First, the modeler must be able to
think of the system in terms of the modeling paradigm supported by the
particular modeling software that is being used. Second, the different possible
ways to model the sys- tem should be evaluated to determine the most efficient
yet effective way to rep- resent the system.

7.2.1 Modeling Paradigms

A simulation model is a computer representation of how elements in a
particular system behave and interact. The internal representation of a system
may not be radically different between simulation products. However, the way
that model in- formation is defined using a particular product may be quite
different. How a user
Chapter 7 Model Building 173

defines a model using a particular simulation product is based on the modeling

paradigm of the product. A modeling paradigm consists of the constructs and
associated language that dictate how the modeler should think about the system
being modeled. In this regard, a modeling paradigm determines the particular
“world view” that one should have when modeling a system. Learning a simula-
tion product requires that one first learn the particular modeling paradigm used
by the product.
Modeling paradigms differ among simulation products—although many dif-
ferences are minor. Historically, simulation products required models to be de-
fined line by line, specifying a list of instructions like a script for processing
enti- ties. Most modern products have a process orientation and support object-
based modeling. Some products view a process as an activity sequence, while
others view it from the standpoint of an entity routing.
Conceptually, object-based modeling is quite simple. An object represents a
real-world object such as a machine, an operator, a process part, or a customer.
An object is defined in terms of attributes and behaviors. Attributes are
essentially variables that are associated with an object such as its size, condition,
time in the system, and so on. Attributes are used to carry information about the
object, either for decision making or for output reporting. Attributes may be
modified during the simulation to reflect changing values. Behaviors define the
operational logic as- sociated with the object. This logic gets executed either
whenever certain events occur or when explicitly called in the model.
Examples of behavioral logic in- clude operations, machine setup, routing
decisions, and material movement. Examples of events or conditions that may
trigger a behavior might be the com- pletion of an operation, the elapse of a
specified period of time, or the drop of a tank or inventory to a specified level.
Objects are organized into classes according to similarity of attributes and
be- havior. In this way, all objects of the same class inherit the attributes and
behav- iors defined for the class. This simplifies object definitions and allows
changes to be quickly made to a set of similar objects. It also allows objects that
are defined once to be reused in other models. In ProModel, predefined object
classes include entities, resources, locations, and paths.
While object-based modeling is consistent with modern object-oriented pro-
gramming (OOP) practices, OOP itself is quite complicated and requires a
signif- icant amount of training to become proficient. The easiest simulation
languages are object-based, but they are not pure OOP languages. Otherwise,
a modeler might as well pick up an OOP language like Java and begin
programming his or her models.
ProModel is object-based but also provides an intuitive entity-flow
modeling paradigm. The natural way to think about most systems being modeled
is to think of them from the perspective of the entity as it flows through each
workstation, storage area, or some other location. In fact, it actually helps
when building the model to put yourself in the place of the entity flowing
through the system and de- scribe what you do and what resources you require
as you move from place to place in the system. For modeling purposes, it is
useful to think of a system in
174 Part I Study Chapters

terms of the same structural and operational elements that were described in
Chapter 6. This is essentially how models are defined using ProModel.

7.2.2 Model Definition

A model is a simplified representation of reality, with emphasis on the word
sim- plified. This means that the exact way in which an operation is performed is
not so important as the way in which the operation impacts the rest of the
system. An ac- tivity should always be viewed in terms of its effect on other
system elements rather than in terms of the detailed way in which it is
performed. Such detailed mechanics are inconsequential to the overall flow of
entities and utilization of resources.
Most models, especially those built by beginners, tend to err on the side of
being overly detailed rather than being too general. The tendency is to reproduce
the precise way that the system operates (sometimes referred to as emulation).
Not only is it difficult to create extremely detailed models, but it is also
difficult to debug and maintain them. Furthermore, all of the detail may
obscure the key is- sues being analyzed so that it actually weakens the model.
The power of a model is more a function of its simplicity rather than its
complexity. A point can be made more effectively when it is reduced to its
simplest form rather than disguised in a morass of detail. Lou Keller of
PROMODEL Corporation has suggested that the Laffer curve, borrowed from
economics, effectively illustrates the relationship be- tween model complexity
and model utility (see Figure 7.1). Notice that a certain degree of complexity is
essential to capture the key cause-and-effect relationships in the system.
However, a system has many more cause-and-effect relationships than should
be included in a model. There is an optimum amount of complexity for any
given model beyond which additional utility begins to diminish.
The remaining sections in this chapter give recommendations on how to ef-
fectively yet minimally represent system elements in a simulation model using a
simulation language like ProModel.

FIGURE 7.1
Relationship between
model complexity and
model utility (also
Complexity

known as the Laffer

curve).

Optimum level of
model complexity

Utility
 Chapter 7 Model Building 175

7.3 Structural Elements

For the most part, model objects represent the structural elements in a system
such as machines, people, work items, and work areas. For purposes of our
discussion, we will be using the simple object classification employed by
ProModel:
• Entities—the items processed in the system.
• Locations—places where entities are processed or held.
• Resources—agents used in the processing of entities.
• Paths—the course of travel for entities and resources in the system.
Not all simulation products provide the same set or classification of
modeling elements. Even these elements could be further subdivided to provide
greater dif- ferentiation. Locations, for example, could be subdivided into
workstations, buffers, queues, and storage areas. From a system dynamics
perspective, however, these are all still simply places to which entities are
routed and where operations or activities may be performed. For this reason, it is
easier just to think of them all in the generic sense as locations. The object
classification used by ProModel is simple yet broad enough to encompass
virtually any object encountered in most manufacturing and service systems.
These model elements or objects have behavior associated with them
(discussed in Section 7.4, “Operational Elements”) and attributes. Most common
behaviors and attributes are selectable from menus, which reduces the time re-
quired to build models. The user may also predefine behaviors and attributes
that are imported into a model.

7.3.1 Entities
Entities are the objects processed in the model that represent the inputs and out-
puts of the system. Entities in a system may have special characteristics such as
speed, size, condition, and so on. Entities follow one or more different routings
in a system and have processes performed on them. They may arrive from
outside the system or be created within the system. Usually, entities exit the
system after visiting a defined sequence of locations.
Simulation models often make extensive use of entity attributes. For exam-
ple, an entity may have an attribute called Condition that may have a value of 1
for defective or 0 for nondefective. The value of this attribute may determine
where the entity gets routed in the system. Attributes are also frequently used
to gather information during the course of the simulation. For example, a
modeler may define an attribute called ValueAddedTime to track the amount
of value- added time an entity spends in the system.
The statistics of interest that are generally collected for entities include time
in the system (flow time), quantity processed (output), value-added time, time
spent waiting to be serviced, and the average number of entities in the system.
176 Part I Study Chapters

Entities to Include
When deciding what entities to include in a model, it is best to look at every
kind of entity that has a bearing on the problem being addressed. For
example, if a component part is assembled to a base item at an assembly station,
and the station is always stocked with the component part, it is probably
unnecessary to model the component part. In this case, what is essential to
simulate is just the time delay to perform the assembly. If, however, the
component part may not always be available due to delays, then it might be
necessary to simulate the flow of compo- nent parts as well as the base items.
The rule is that if you can adequately capture the dynamics of the system
without including the entity, don’t include it.

Entity Aggregating
It is not uncommon for some manufacturing systems to have hundreds of part
types or for a service system to have hundreds of different customer types. Mod-
eling each one of these entity types individually would be a painstaking task that
would yield little, if any, benefit. A better approach is to treat entity types in the
aggregate whenever possible (see Figure 7.2). This works especially well when
all entities have the same processing sequence. Even if a slight difference in
process- ing exists, it often can be handled through use of attributes or by using
probabili- ties. If statistics by entity type are not required and differences in
treatment can be defined using attributes or probabilities, it makes sense to
aggregate entity types into a single generic entity and perhaps call it part or
customer.

Entity Resolution
Each individual item or person in the system need not always be represented by
a corresponding model entity. Sometimes a group of items or people can be
repre- sented by a single entity (see Figure 7.3). For example, a single entity
might be used to represent a batch of parts processed as a single unit or a party
of people eating together in a restaurant. If a group of entities is processed as a
group and moved as a group, there is no need to model them individually.
Activity times or statistics that are a function of the size of the group can be
handled using an attribute that keeps track of the items represented by the single
entity.

Type A

Type B
Type X

Type C 9 entities 1 entity

FIGURE 7.3
FIGURE 7.2

Treating different entity types as a Treating multiple entities as

single type. a single entity.
 Chapter 7 Model Building 177

High-Rate Entity Processing

In some systems, especially in the food and beverage industries, it is not uncom-
mon to process entities at a rate of hundreds per minute. In such situations,
modeling each individual entity can significantly slow down the simulation. For
high-rate processing in which individual entity tracking isn’t critical, it may be
preferable to merely track entity production at various stages of a process using
variables or attributes instead of individual entities. Simulation languages having
a tank or accumulator construct can make this easier. Having thousands of
entities in the system at one time (especially those with multiple attributes) can
consume lots of computer memory and may slow the simulation significantly.
An alternative approach to modeling high-rate entity processing is to adjust
the resolution of the entity, as discussed earlier. Using this approach, you might
model every carton of 48 bottles or containers in a beverage-processing facility
as a single entity. This approach also works for continuously flowing
substances such as liquids or granules, which can often be converted, for
simulation, into dis- crete units of measure such as gallons, pounds, or barrels.

7.3.2 Locations
Locations are places in the system that entities visit for processing, waiting, or
de- cision making. A location might be a treatment room, workstation, check-in
point, queue, or storage area. Locations have a holding capacity and may have
certain times that they are available. They may also have special input and
output such as input based on highest priority or output based on first-in, first out
(FIFO).
In simulation, we are often interested in the average contents of a location
such as the average number of customers in a queue or the average number of
parts in a storage rack. We might also be interested in how much time entities
spend at a particular location for processing. There are also location state
statistics that are of interest such as utilization, downtime, or idle time.

Locations to Include
Deciding what to model as a route location depends largely on what happens at
the location. If an entity merely passes through a location en route to another
with- out spending any time, it probably isn’t necessary to include the location.
For ex- ample, a water spray station through which parts pass without pausing
probably doesn’t need to be included in a model. In considering what to define
as a location, any point in the flow of an entity where one or more of the
following actions take place may be a candidate:
• Place where an entity is detained for a specified period of time while
undergoing an activity (such as fabrication, inspection, or cleaning).
• Place where an entity waits until some condition is satisfied (like the
availability of a resource or the accumulation of multiple entities).
• Place or point where some action takes place or logic gets executed, even
though no time is required (splitting or destroying an entity, sending a
signal, incrementing an attribute or variable).
178 Part I Study Chapters

• Place or point where a decision is made about further routing (a branch in

a conveyor or path, an area in a store where customers decide to which
checkout counter they will go).

Location Resolution
Depending on the level of resolution needed for the model, a location may be an
entire factory or service facility at one extreme, or individual positions on a desk
or workbench at the other. The combination of locations into a single location is
done differently depending on whether the locations are parallel or serial
locations.
When combining parallel locations having identical processing times, the
resulting location should have a capacity equal to the combined capacities of the
individual locations; however, the activity time should equal that of only one of
the locations (see Figure 7.4). A situation where multiple locations might be
com- bined in this way is a parallel workstation. An example of a parallel
workstation is a work area where three machines perform the same operation.
All three ma- chines could be modeled as a single location with a capacity equal
to three. Com- bining locations can significantly reduce model size, especially
when the number of parallel units gets very large, such as a 20-station checkout
area in a large shop- ping center or a 100-seat dining area in a restaurant.
When combining serial locations, the resultant location should have a
capac- ity equal to the sum of the individual capacities and an activity time
equal to the sum of the activity times. An example of a combined serial
sequence of locations

FIGURE 7.4
Example of
Capacity = 1
combining three
parallel stations into
a single station.
Capacity = 1 Capacity = 1
Capacity = 1

Operation 10 Operation 30
Capacity =
1

Operation 20
1 min. each

Capacity = 1 Capacity = 3 Capacity = 1

Operation 10 Operation 20 Operation 30

1 min.
 Chapter 7 Model Building 179

FIGURE 7.5
Example of combining three serial stations into a single station.

Capacity = Capacity
Capacity==
11
Capacity = 1 Capacity = 1
1

Station 1 Station Station Station Station 5

2 3 4
1 min. 1 min. 1 min.

Capacity = 1 Capacity = 3 Capacity = 1

Station 1 Stations 2–4 Station 5

1 min. 3 min. 1 min.

might be a synchronous transfer line that has multiple serial stations. All of
them could be represented as a single location with a capacity equal to the
number of stations (see Figure 7.5). Parts enter the location, spend an amount of
time equal to the sum of all the station times, and then exit the location. The
behavior may not be exactly the same as having individual stations, such as
when the location becomes blocked and up to three parts may be finished and
waiting to move to station 5. The modeler must decide if the representation is a
good enough approx- imation for the intended purpose of the simulation.

7.3.3 Resources
Resources are the agents used to process entities in the system. Resources may
be either static or dynamic depending on whether they are stationary (like a copy
ma- chine) or move about in the system (like an operator). Dynamic resources
behave much like entities in that they both move about in the system. Like
entities, re- sources may be either animate (living beings) or inanimate (a tool or
machine). The primary difference between entities and resources is that entities
enter the system, have a defined processing sequence, and, in most cases, finally
leave the system. Resources, however, usually don’t have a defined flow
sequence and remain in the system (except for off-duty times). Resources often
respond to requests for their use, whereas entities are usually the objects
requiring the use of resources.
In simulation, we are interested in how resources are utilized, how many re-
sources are needed, and how entity processing is affected by resource
availability. The response time for acquiring a resource may also be of interest.
180 Part I Study Chapters

Resources to Include
The decision as to whether a resource should be included in a model depends
largely on what impact it has on the behavior of the system. If the resource is
dedicated to a particular workstation, for example, there may be little benefit in
in- cluding it in the model since entities never have to wait for the resource to
become available before using it. You simply assign the processing time to the
workstation. If, on the other hand, the resource may not always be available
(it experiences downtime) or is a shared resource (multiple activities
compete for the same resource), it should probably be included. Once again,
the consideration is how much the resource is likely to affect system behavior.

Resource Travel Time

One consideration when modeling the use of resources is the travel time associ-
ated with mobile resources. A modeler must ask whether a resource is
immediately accessible when available, or if there is some travel time involved.
For example, a special piece of test equipment may be transported around to
several locations in a facility as needed. If the test equipment is available when
needed at some loca- tion, but it takes 10 minutes to get the test equipment to
the requesting location, that time should be accounted for in the model. The time
for the resource to move to a location may also be a function of the distance it
must travel.

Consumable Resources
Depending on the purpose of the simulation and degree of influence on system
behavior, it may be desirable to model consumable resources. Consumable
resources are used up during the simulation and may include
• Services such as electricity or compressed air.
• Supplies such as staples or tooling.
Consumable resources are usually modeled either as a function of time or as
a step function associated with some event such as the completion of an
operation. This can be done by defining a variable or attribute that changes
value with time or by event. A variable representing the consumption of
packaging materials, for example, might be based on the number of entities
processed at a packaging station.

Transport Resources
Transport resources are resources used to move entities within the system.
Examples of transport resources are lift trucks, elevators, cranes, buses, and air-
planes. These resources are dynamic and often are capable of carrying multiple
entities. Sometimes there are multiple pickup and drop-off points to deal with.
The transporter may even have a prescribed route it follows, similar to an
entity routing. A common example of this is a bus route.
In advanced manufacturing systems, the most complex element to model is
often the transport or material handling system. This is because of the complex
operation that is associated with these computer-controlled systems such as
 Chapter 7 Model Building 181

conveyor systems and automated guided vehicle systems (AGVS).

Modeling advanced material handling systems can be simplified if the
modeling language provides special constructs for defining them; otherwise the
logic describing their behavior must be defined by the modeler. ProModel
provides facilities for model- ing material handling systems that are described in
Chapter 13.

7.3.4 Paths
Paths define the course of travel for entities and resources. Paths may be
isolated, or they may be connected to other paths to create a path network. In
ProModel simple paths are automatically created when a routing path is
defined. A routing path connecting two locations becomes the default path of
travel if no explicitly defined path or path network connects the locations.
Paths linked together to form path networks are common in manufacturing
and service systems. In manufacturing, aisles are connected to create travel
ways for lift trucks and other material handlers. An AGVS sometimes has
complex path networks that allow controlled traffic flow of the vehicles in the
system. In service systems, office complexes have hallways connecting other
hallways that connect to offices. Transportation systems use roadways, tracks,
and so on that are often interconnected.
When using path networks, there can sometimes be hundreds of routes to
take to get from one location to another. ProModel is able to automatically
navigate en- tities and resources along the shortest path sequence between two
locations. Op- tionally, you can explicitly define the path sequence to take to get
from one point to any other point in the network.

7.4 Operational Elements

Operational elements define the behavior of the different physical elements in
the system and how they interact. These include routings, operations, arrivals,
entity and resource movement, task selection rules, resource schedules, and
downtimes and repairs.
Most of the operational elements of a model can be defined using constructs
that are specifically provided for modeling such elements. The operational rules
for each can usually be selected from menus. There may be situations, however,
that require the modeler to use special logic such as “if–then” statements to
achieve the special operating behavior that is desired.

7.4.1 Routings
Routings define the sequence of flow for entities from location to location. When
entities complete their activity at a location, the routing defines where the entity
goes next and specifies the criterion for selecting from among multiple possible
locations.
182 Part I Study Chapters

Frequently entities may be routed to more than one possible location. When
choosing from among multiple alternative locations, a rule or criterion must be
defined for making the selection. A few typical rules that might be used for
selecting the next location in a routing decision include
• Probabilistic—entities are routed to one of several locations according to
a frequency distribution.
• First available—entities go to the first available location in the order they
are listed.
• By turn—the selection rotates through the locations in the list.
• Most available capacity—entities select the location that has the most
available capacity.
• Until full—entities continue to go to a single location until it is full and
then switch to another location, where they continue to go until it is full,
and so on.
• Random—entities choose randomly from among a list of locations.
• User condition—entities choose from among a list of locations based on a
condition defined by the user.

Recirculation
Sometimes entities revisit or pass through the same location multiple times. The
best approach to modeling this situation is to use an entity attribute to keep track
of the number of passes through the location and determine the operation or
rout- ing accordingly. When using an entity attribute, the attribute is incremented
either on entry to or on exit from a location and tested before making the
particular op- eration or routing decision to see which pass the entity is
currently on. Based on the value of the attribute, a different operation or routing
may be executed.

Unordered Routings
Certain systems may not require a specific sequence for visiting a set of
locations but allow activities to be performed in any order as long as they all
eventually get performed. An example is a document requiring signatures from
several depart- ments. The sequence in which the signatures are obtained may be
unimportant as long as all signatures are obtained.
In unordered routing situations, it is important to keep track of which
locations have or haven’t been visited. Entity attributes are usually the most
prac- tical way of tracking this information. An attribute may be defined for
each possi- ble location and then set to 1 whenever that location is visited. The
routing is then based on which of the defined attributes are still set to zero.

7.4.2 Entity Operations

An entity operation defines what happens to an entity when it enters a location.
For modeling purposes, the exact nature of the operation (machining, patient
check-in, or whatever) is unimportant. What is essential is to know what
happens
 Chapter 7 Model Building 183

in terms of the time required, the resources used, and any other logic that
impacts system performance. For operations requiring more than a time and
resource des- ignation, detailed logic may need to be defined using if–then
statements, variable assignment statements, or some other type of statement
(see Section 7.4.8, “Use of Programming Logic”).
An entity operation is one of several different types of activities that take
place in a system. As with any other activity in the system, the decision to
include an entity operation in a model should be based on whether the operation
impacts entity flow in some way. For example, if a labeling activity is performed
on enti- ties in motion on a conveyor, the activity need not be modeled unless
there are sit- uations where the labeler experiences frequent interruptions.

Consolidation of Entities
Entities often undergo operations where they are consolidated or become either
physically or logically connected with other entities. Examples of entity
consoli- dation include batching and stacking. In such situations, entities are
allowed to simply accumulate until a specified quantity has been gathered, and
then they are grouped together into a single unit. Entity consolidation may be
temporary, al- lowing them to later be separated, or permanent, in which case
the consolidated entities no longer retain their individual identities. Figure 7.6
illustrates these two types of consolidation.
Examples of consolidating multiple entities to a single entity include
• Accumulating multiple items to fill a container.
• Gathering people together into groups of five for a ride at an amusement
park.
• Grouping items to load them into an oven for heating.
In ProModel, entities are consolidated permanently using the COMBINE com-
mand. Entities may be consolidated temporarily using the GROUP command.

Attachment of Entities
In addition to consolidating accumulated entities at a location, entities can also
be attached to a specific entity at a location. Examples of attaching entities might
be

FIGURE 7.6 destroyed. In (b) temporary consolidation, batched entities are preserved for later
Consolidation of unbatching.
entities into a single
entity. In (a)
permanent before after
consolidation, (a)
batched entities get

before
(b) after
184 Part I Study Chapters

FIGURE 7.7
Attachment of one or
more entities to
another entity. In (a)
permanent after
attachment, the
attached entities get befor
destroyed. In (b) e (a)
temporary attachment,
the attached entities
are preserved for later
detachment.

after

before (b)

attaching a shipping document to an order ready for delivery, assembling wheels

to a chassis, or placing items into a container. The difference between attaching
entities and consolidating entities is that entities become attached to an
existing base or main entity that must be present at the location. It is the
presence of the main entity at the location that triggers the routing of the entities
to be attached. In consolidation, entities are combined in whichever order they
happen to enter the location. Like consolidation, attachment may be temporary,
where the attached entities are later detached, or permanent, where the attached
entities are destroyed and only the initial entity to which they were attached
continues. Figure 7.7 illus- trates these two types of attachment.
Examples of attaching entities to another entity include
• Attaching component parts to a base assembly.
• Delivering a completed order to a waiting customer.
• Loading material into a container.
In ProModel, entities are attached to another entity using the LOAD
command for temporary attachments or the JOIN command for permanent
attachments. Cor- responding LOAD and JOIN routings must also be defined
for the entities to be loaded or joined.

Dividing Entities
In some entity processes, a single entity is converted into two or more new enti-
ties. An example of entity splitting might be an item that is cut into smaller
pieces or a purchase order that has carbon copies removed for filing or
sending to accounting. Entities are divided in one of two ways: either the
entity is split up into two or more new entities and the original entity no longer
exists; or additional entities are merely created (cloned) from the original
entity, which continues to exist. These two methods are shown in Figure 7.8.
 Chapter 7 Model Building 185

FIGURE 7.8
Multiple entities
created from a
single entity. Either before after
(a) the entity splits (a)
into multiple entities
(the original entity
is destroyed) or (b)
the entity creates
one or more entities
(the original entity before
continues). after
(b)

Examples of entities being split or creating new entities from a single entity
include
• A container or pallet load being broken down into the individual
items comprising the load.
• Driving in and leaving a car at an automotive service center.
• Separating a form from a multiform document.
• A customer placing an order that is processed while the customer waits.
• A length of bar stock being cut into smaller pieces.
In ProModel, entities are split using a SPLIT statement. New entities are
created from an existing entity using a CREATE statement. Alternatively, entities
can be con- veniently split or created using the routing options provided in
ProModel.

7.4.3 Entity Arrivals

Entity arrivals define the time, quantity, frequency, and location of entities enter-
ing the system. Examples of arrivals are customers arriving at a post office or
cars arriving at an intersection. Entities may arrive to a manufacturing or
service sys- tem in one of several different ways:
• Periodic—they arrive at a periodic interval.
• Scheduled—they arrive at specified times.
• Fluctuating—the rate of arrival fluctuates with time.
• Event triggered—they arrive when triggered by some event.
In any case, entities can arrive individually or in batches.

Periodic Arrivals
Periodic arrivals occur more or less at the same interval each time. They may
occur in varying quantities, and the interval is often defined as a random
variable. Periodic arrivals are often used to model the output of an upstream
process that feeds into the system being simulated. For example, computer
monitors might arrive from an assembly line to be packaged at an interval
that is normally
186 Part I Study Chapters

distributed with a mean of 1.6 minutes and a standard deviation of 0.2 minute.
Ex- amples of periodic arrivals include
• Parts arriving from an upstream operation that is not included in the model.
• Customers arriving to use a copy machine.
• Phone calls for customer service during a particular part of the day.
Periodic arrivals are defined in ProModel by using the arrivals table.

Scheduled Arrivals
Scheduled arrivals occur when entities arrive at specified times with possibly
some defined variation (that is, a percentage will arrive early or late). Scheduled
arrivals may occur in quantities greater than one such as a shuttle bus
transporting guests at a scheduled time. It is often desirable to be able to read in
a schedule from an ex- ternal file, especially when the number of scheduled
arrivals is large and the sched- ule may change from run to run. Examples of
scheduled arrivals include
• Customer appointments to receive a professional service such as counseling.
• Patients scheduled for lab work.
• Production release times created through an MRP (material requirements
planning) system.
Scheduled arrivals sometime occur at intervals, such as appointments that occur
at 15-minute intervals with some variation. This may sound like a periodic
arrival; however, periodic arrivals are autocorrelated in that the absolute time of
each ar- rival is dependent on the time of the previous arrival. In scheduled
arrival inter- vals, each arrival occurs independently of the previous arrival. If
one appointment arrives early or late, it will not affect when the next
appointment arrives.
ProModel provides a straightforward way for defining scheduled arrivals
using the arrivals table. A variation may be assigned to a scheduled arrival to
sim- ulate early or late arrivals for appointments.

Fluctuating Arrivals
Sometimes entities arrive at a rate that fluctuates with time. For example, the
rate at which customers arrive at a bank usually varies throughout the day with
peak and lull times. This pattern may be repeated each day (see Figure 7.9).
Examples of fluctuating arrivals include
• Customers arriving at a restaurant.
• Arriving flights at an international airport.
• Arriving phone calls for customer service.
In ProModel, fluctuating arrivals are specified by defining an arrival cycle
pattern for a time period that may be repeated as often as desired.

Event-Triggered Arrivals
In many situations, entities are introduced to the system by some internal trigger
such as the completion of an operation or the lowering of an inventory level to a
 Chapter 7 Model Building 187

FIGURE 7.9
A daily cycle 120
pattern of arrivals.

Arrival quantity
100

80

60

40

20

9A.M. 10A.M. 11A.M.12 NOON 1P.M. 2P.M. 3P.M. 4P.M. 5P.M. 6P.M.
Hour of day

reorder point. Triggered arrivals might occur when

• A kanban or delivery signal is received.
• Inventory drops to the reorder-point level.
• Conditions have been met to start processing a new entity.
Sometimes the signal to initiate an arrival or to begin production of an item
is triggered by some other arrival. An example of this is the arrival of a customer
order for a product. In such instances, it isn’t the order that flows through the
system but the product the order triggers. To model this situation, you define the
characteristic of the order arrival (frequency, type, or the like) and then have the
arriving order trigger production of the product.
In ProModel, entity arrivals can be triggered using an ORDER statement.
This statement can be used anywhere in the model so that any situation can
cause a new entity to be ordered into the model.

7.4.4 Entity and Resource Movement

Entities and resources seldom remain stationary in a system. Entities move
through the system from location to location for processing. Resources also
move to differ- ent locations where they are requested for use. Additionally,
resources frequently move or escort entities in the system.
Movement can be handled in three basic ways in a simulation:
1. Ignore the movement.
2. Model the move using a simple move time (which may also be defined
by speed and distance).
3. Model the move using a path network that requires the moving entity or
resource to contend with traffic.
188 Part I Study Chapters

A path network essentially imitates the network of aisles or hallways found

on plant floors and in office facilities. A path network reduces the number of
paths that need to be defined if there are a lot of different routings yet all
movement shares common path segments.
The decision as to which method to use depends once again on the level of
detail needed for a valid model. In making this determination, the following
rules may be useful:
• If the move time is negligible compared to activity times, or if it makes
sense to simply include it as part of the operation time, it may be ignored.
• If move times are significant but traffic congestion is light, a simple move
time (or speed and distance) should be defined.
• If move times are significant and traffic congestion is heavy, a path
network should be defined.

7.4.5 Accessing Locations and Resources

Much of the activity in a simulation is governed by how entities are able to
access locations and resources for processing. Entities may be given
priorities when contending with other entities for a particular location or
resource. The location or resource might also be given decision-making
capability for selecting from among multiple items awaiting input.

Use of Priorities
Locations and resources may be requested with a particular priority in
ProModel. Priorities range from 0 to 999, with higher values having higher
priority. If no pri- ority is specified, it is assumed to be 0. For simple prioritizing,
you should use pri- orities from 0 to 99. Priorities greater than 99 are for
preempting entities and downtimes currently in control of a location or
resource. The command Get Operator, 10 will attempt to get the resource
called Operator with a priority of
10. If the Operator is available when requested, the priority has no significance.
If, however, the Operator is currently busy, this request having a priority of 10
will get the Operator before any other waiting request with a lower priority.

Preemption
Sometimes it is desirable to have a resource or location respond immediately to
a task, interrupting the current activity it is doing. This ability to bump
another activity or entity that is using a location or resource is referred to as
preemption. For example, an emergency patient requesting a particular doctor
may preempt a patient receiving routine treatment by the doctor. Manufacturing
and service or- ganizations frequently have “hot” jobs that take priority over
any routine job being done. Preemption is achieved by specifying a
preemptive priority (100 to 999) for entering the location or acquiring the
resource.
Priority values in ProModel are divided into 10 levels (0 to 99, 100 to
199, . . . , 900 to 999). Levels higher than 99 are used to preempt entities or
downtimes of a lower level. Multiple preemptive levels make it possible to
preempt entities or downtimes that are themselves preemptive.
 Chapter 7 Model Building 189

The level of preemption to specify is determined by whether an entity or a

downtime is being preempted. To preempt an entity that is currently using a
loca- tion or resource, the preempting entity or downtime must have a priority
that is at least one level higher than the current entity. For example, a priority of
100 would preempt any entity that had acquired a location or resource with a
priority of 0 to 99. To preempt a downtime currently in effect at a location or
resource, the preempting entity or downtime must have a priority that is at
least two levels higher than the downtime (the exception to this is a setup
downtime, which is pre- empted using the same rules as those for preempting an
entity).
The primary issue associated with preemption is what to do with the
pre- empted entity. The common way of handling a preempted entity is to
simply put it on hold until the resource or location becomes available again for
use. Then any remaining time is completed. This is the default way that
ProModel handles pre- emption. Alternatively, it may be desirable to get a
different resource instead of waiting for the one being used by the preempting
entity. Sometimes it may be nec- essary to delay the preemption or possibly
even ignore it, depending on certain circumstances in the model. For example,
it may be unallowable to interrupt a ma- chining cycle or a surgical operation. In
such instances, a preemptive attempt may just have to wait. ProModel allows
you to write special preemption logic for achieving these kinds of effects.

Task Selection Rules

Locations and resources are often discriminating with respect to which waiting
entity or activity they next select to service. While priorities determine the order
in which entities line up to use a location or resource, task selection rules deter-
mine which entity waiting for a location or resource is actually granted
permission to use the location or resource when it becomes available. For
example, parts waiting to be processed at a machine may also be competing
with parts waiting to be reworked on the same machine. In such a situation, it
may be desirable to first select the part requiring rework.
Task selection plays a crucial role in simulation-based scheduling
(Thompson 1994). Rules range from simple priority rules such as shortest
processing time, critical ratio, or earliest due date to combinatorial rules and
user-defined decision logic. User-defined decision logic provides the most
flexible means for defining task selection. It allows the user to define the logic
for selecting the next task by examining the nature of all of the tasks waiting to
be performed, looking upstream or looking ahead to see what entities or tasks
will be coming along, and looking downstream to see what tasks will best
serve the needs of subsequent waiting resources. By default locations and
resources in ProModel respond to the highest- priority request that has been
waiting the longest. Other criteria may be defined, however, to force a different
response.

7.4.6 Resource Scheduling

Resources, as well as locations, frequently have scheduled times during which
they are unavailable. These include off-shift periods, breaks, and preventive
190 Part I Study Chapters

maintenance. If it is necessary to model periods of availability and unavailability

to have a valid model, some of the issues that need to be addressed when model-
ing scheduled availability include
• Deciding what to do with a task that is only half completed when the end
of a shift occurs.
• Making sure that resource statistics are based only on the scheduled
available time and not on the entire simulation time.
• Deciding what to do with arrivals that occur at a location that is off shift.

Going off Schedule in the Middle of a Task

It is not uncommon when running a simulation with work schedules to have a
re- source go off schedule in the middle of a task (the current task is preempted).
For short tasks, this is generally not a problem; you simply allow the resource to
com- plete the task and then allow the schedule to take control. For longer
tasks that may take hours, it usually isn’t desirable to keep the resource until the
task is com- pleted. There are at least three options to take:
1. Don’t start the task in the first place.
2. Interrupt the task and go off schedule.
3. If the task is nearly complete, go ahead and finish the task.
To determine whether to start the task in the first place, the modeler needs to
test for the time before the next schedule change and compare it with the
anticipated time to complete the task at hand. Interrupting a task usually requires
only that a pre- emptive priority be given to the schedule. To determine whether
the task is almost complete, a variable should be assigned to the completion
time, which can be checked at the time of the schedule change. A related
situation is when several tasks are waiting that must be processed before going
off schedule (for example, a check- out stand in a grocery store closes but must
service current customers in line). This situation is facilitated if some logic can
be executed at the time a schedule is about to be executed. This logic needs to be
able to delay the schedule execution. ProModel allows these types of delays to
be defined.

Basing Resource Statistics on Scheduled Time

When including work schedules in a model, it is generally desirable to gather
sta- tistics on the resource, such as utilization statistics, based on the scheduled
time available—not on total simulation time. ProModel automatically
excludes off- scheduled time when calculating statistics. This way, statistics are
reported for re- sources and locations only for the time during which they were
scheduled to be available.

Handling Arrivals during Off-Shift Times

It is usually desirable to prevent arrivals (especially human entities) from occur-
ring during off-schedule times because you don’t want them to have to wait until
a location or resource is back on schedule. To turn off arrivals during off-shift
 Chapter 7 Model Building 191

times, one solution is to try to synchronize the arrivals with the work schedule.
This usually complicates the way arrivals are defined. Another solution, and
usu- ally an easier one, is to have the arrivals enter a preliminary location where
they test whether the facility is closed and, if so, exit the system. In
ProModel, if a location where entities are scheduled to arrive is unavailable
at the time of an arrival, the arriving entities are simply discarded.

7.4.7 Downtimes and Repairs

It is not uncommon for resources and even locations to unexpectedly go down or
become unavailable for one reason or another, such as a mechanical failure or a
personal interruption. Downtimes usually occur periodically as a function of
total elapsed time, time in use, or number of times used.

Downtimes Based on Total Elapsed Time

An example of a periodic downtime based on elapsed clock time might be a
worker who takes a break every two hours. Scheduled maintenance is also a type
of downtime performed at periodic intervals based on elapsed clock time.
Figure 7.10 illustrates how a downtime based on elapsed time would be simu-
lated. Notice that the calculation of the interval between downtimes takes into
ac- count not only busy time, but also idle time and downtime. In other words, it
is the total elapsed time from the start of one downtime to the start of the next.
Down- times based on total elapsed time are often scheduled downtimes
during which operational statistics on the location or resource are suspended.
ProModel allows you to designate whether a particular downtime is to be
counted as scheduled downtime or unscheduled downtime.
Sometimes it may be desirable to use elapsed time to define random equip-
ment failures. This is especially true if this is how historical data were gathered
on the downtime. When using historical data, it is important to determine if the
time between failure was based on (1) the total elapsed time from one failure
to the next, (2) the time between the repair of one failure to the time of the next
failure (operational time between failures), or (3) the time that the machine was
actually in operation (operating time between failures). ProModel accepts
downtime defi- nitions based on cases 1 and 3, but requires that case 2 be
converted to case 1. This is done by adding the time until the next failure to the
repair time of the last failure. For example, if the operational time between
failures is exponentially distributed with a mean of 10 minutes and the repair
time is exponentially distributed with a

FIGURE 7.10 Start Interrupt Interrupt

Resource downtime
6 10 4 6 14
occurring every 20
minutes based on
total elapsed time. Idle Busy Idle Down Busy
Time (minutes)
192 Part I Study Chapters

FIGURE 7.11 Start Interrupt

Resource 12 8
downtime
occurring every 20 Idle Busy Idle Busy
minutes, based on
Time (minutes)
operating time.

mean of 2 minutes, the time between failures should be defined as xlast + E (10)
where xlast is the last repair time generated using E (2) minutes.

Downtimes Based on Time in Use

Most equipment and machine failures occur only when the resource is in use. A
mechanical or tool failure, for example, generally happens only when a
machine is running, not while a machine is idle. In this situation, the interval
between downtimes would be defined relative to actual machine operation time.
A machine that goes down every 20 minutes of operating time for a three-
minute repair is illustrated in Figure 7.11. Note that any idle times and
downtimes are not included in determining when the next downtime occurs.
The only time counted is the ac- tual operating time.
Because downtimes usually occur randomly, the time to failure is most
accu- rately defined as a probability distribution. Studies have shown, for
example, that the operating time to failure is often exponentially distributed.

Downtimes Based on the Number of Times Used

The last type of downtime occurs based on the number of times a location was
used. For example, a tool on a machine may need to be replaced every 50 cycles
due to tool wear, or a copy machine may need paper added after a mean of 200
copies with a standard deviation of 25 copies. ProModel permits downtimes to
be defined in this manner by selecting ENTRY as the type of downtime and then
spec- ifying the number of entity entries between downtimes.

Downtime Resolution
Unfortunately, data are rarely available on equipment downtime. When they are
available, they are often recorded as overall downtime and seldom broken down
into number of times down and time between failures. Depending on the nature
of the downtime information and degree of resolution required for the
simulation, downtimes can be treated in the following ways:
• Ignore the downtime.
• Simply increase processing times to adjust for downtime.
• Use average values for mean time between failures (MTBF) and
mean time to repair (MTTR).
• Use statistical distributions for time between failures and time to repair.

Ignoring Downtime. There are several situations where it might make sense to
ignore downtimes in building a simulation model. Obviously, one situation is
where absolutely no data are unavailable on downtimes. If there is no knowledge
Chapter 7 Model Building 193

of resource downtimes, it is appropriate to model the resource with no

downtimes and document it as such in the final write-up. When there are
downtimes, but they are extremely infrequent and not likely to affect model
performance for the period of the study, it is safe to ignore them. For example, if
a machine fails only two or three times a year and you are trying to predict
processing capacity for the next workweek, it doesn’t make sense to include the
downtime. It is also safe to ignore occasional downtimes that are very small
compared to activity times. If, for ex- ample, a downtime takes only seconds to
correct (like clearing a part in a machine or an occasional paper jam in a copy
machine), it could be ignored.

Increasing Processing Times. A common way of treating downtime, due in

part to the lack of good downtime data, is to simply reduce the production
capacity of the machine by the downtime percentage. In other words, if a
machine has an ef- fective capacity of 100 parts per hour and experiences a 10
percent downtime, the effective capacity is reduced to 90 parts per hour. This
spreads the downtime across each machine cycle so that both the mean time
between failures and the mean time to repair are very small and both are
constant. Thus no consideration is given for the variability in both time between
failures and time to repair that typ- ifies most production systems. Law (1986)
has shown that this deterministic ad- justment for downtime can produce
results that differ greatly from the results based on actual machine downtimes.

MTBF/MTTR. Two parts to any downtime should be defined when modeling

downtime. One, time between failures, defines the interval between failures. The
other, time to repair, defines the time required to bring a resource back online
whenever it goes down. Often downtimes are defined in terms of mean time
between failures (MTBF) and mean time to repair (MTTR). Using average times
for these intervals presents the same problems as using average times for any ac-
tivity in a simulation: it fails to account for variability, which can have a signifi-
cant impact on system performance.

Using Statistical Distributions. Whenever possible, time between failures and

time to repair should be represented by statistical distributions that reflect the
variation that is characteristic of these elements. Studies have shown that the
time until failure, particularly due to items (like bearings or tooling) that wear,
tends to follow a Weibull distribution. Repair times often follow a lognormal
distribution.

Elapsed Time or Usage Time?

When determining the distribution for time to failure, a distinction should be
made between downtime events that can occur anytime whether the resource is
operating or idle and downtime events that occur only when a resource is in use.
As explained earlier, downtimes that can occur anytime should be defined as a
function of clock time. If the resource goes down only while in operation, it
should be defined as a function of time in use.
Erroneously basing downtime on elapsed time when it should be based on
operating time artificially inflates time between failures by the inclusion of idle
194 Part I Study Chapters

time. It also implies that during periods of high equipment utilization, the same
amount of downtime occurs as during low utilization periods. Equipment
failures should generally be based on operating time and not on elapsed time
because elapsed time includes operating time, idle time, and downtime. It should
be left to the simulation to determine how idle time and downtime affect the
overall elapsed time between failures.
To illustrate the difference this can make, let’s assume that the following
times were logged for a given operation:

Status Time (Hours)

In use 20
Down 5
Idle 15

Total time 40

If it is assumed that downtime is a function of total time, then the percentage of

downtime would be calculated to be 5 hours/40 hours, or 12.5 percent. If, how-
ever, it is assumed that the downtime is a function of usage time, then the down-
time percentage would be 5 hours/20 hours, or 25 percent. Now let’s suppose
that the system is modeled with increased input to the operation so that it is
never starved (the idle time = 0). If downtime is assumed to be 12.5 percent,
the total
time down will be .125 × 40 = 5 hours. If, on the other hand, we use the assump-
tion that it is 25 percent, then the time down will end up being .25 × 40 hours =
10 hours. This is a difference of five hours, which means that if downtime is
falsely assumed to be a function of total time, the simulation would realize five
extra hours of production in a 40-hour period that shouldn’t have happened.

Handling Interrupted Entities

When a resource goes down, there might be entities that were in the middle of
being processed that are now left dangling (that is, they have been preempted).
For example, a machine might break down while running the seventh part of a
batch of 20 parts. The modeler must decide what to do with these entities.
Several alternatives may be chosen, and the modeler must select which
alternative is the most appropriate:
• Resume processing the entity after the downtime is over.
• Find another available resource to continue the process.
• Scrap the entity.
• Delay start of the downtime until the entity is processed.
The last option is the easiest way to handle downtimes and, in fact, may be
adequate in situations where either the processing times or the downtimes are
rel- atively short. In such circumstances, the delay in entity flow is still
going to closely approximate what would happen in the actual system.
If the entity resumes processing later using either the same or another re-
source, a decision must be made as to whether only the remaining process time is
 Chapter 7 Model Building 195

used or if additional time must be added. By default, ProModel suspends

process- ing until the location or resource returns to operation. Alternatively,
other logic may be defined.

7.4.8 Use of Programming Logic

Sometimes the desired model behavior can’t be achieved using a “canned” con-
struct provided by the software. In these instances, it is necessary to use
program- ming logic that tests probabilities, variables, and attributes to make
behavioral decisions. A brief explanation of how these elements can be used in
developing a simulation model is given here.

Using Probabilities to Model Probabilistic Behavior

Sometimes operational elements (routings, operations, or others) exhibit random
behavior. To model a routing that occurs randomly, it is easy just to select a
proba- bilistic routing rule and specify the probability value. The routing is then
randomly chosen according to the probability specified. For operations that
occur randomly at a particular location, however, a probability function must be
used in connection with if–then logic. At an inspection and rework station, for
example, suppose that
a product is defective 10 percent of the time and requires 3 ± 1 minutes
(uniformly distributed) to correct the defect. Assuming rand() is a function
that returns a
random value between 0 and 1, the code for defining this behavior might be as
follows:
if rand() <= .10
then wait U(3,1) min

A similar situation occurs in activity times that have more than one distribu-
tion. For example, when a machine goes down, 30 percent of the time it takes
Triangular(0.2, 1.5, 3) minutes to repair and 70 percent of the time it takes Trian-
gular(3, 7.5, 15) minutes to repair. The logic for the downtime definition might
be
if rand() <= .30
then wait T(.2, 1.5, 3) min
else wait T(3, 7.5, 15) min

Another example of multidistribution activity is a call center that handles

three different types of calls that we will designate as A, B, and C. The time to
handle calls is exponentially distributed, but the mean time is different
depending on the type of call (see Table 7.1). To model this situation, the
following code

TABLE 7.1 Table of Service Times for Different Call Types

Call Type Probability of Occurrence Service Time (Minutes)

A .20 E(5)
B .50 E(8)
C .30 E(12)
196 Part I Study Chapters

might be entered (“//” are used at the beginning of a comment line):

// set a real variable (rValue) to a random number
real rValue = rand()
// test for call type A
if rValue <=.20
then wait E(5) min
else if rValue <=.70
then wait E(8) min
else wait E(12) min

Using Attributes to Model Special Decision Logic

Sometimes an item that has passed through the same location a second time
requires less time to be reworked than it took for the initial operation. In this
situ- ation, an attribute of the entity should be the basis of the decision because
we need to test how many times that particular entity has visited the location.
An attribute we will call Pass will need to be defined in the attribute module. If a
normal oper- ation takes five minutes but a rework operation takes only two
minutes, the fol- lowing code would be entered in the operation logic for the
location:
// increment the value of Pass by one
INC Pass
if Pass = 1
then wait 5 min
else wait 2 min

Using Global Variables to Gather Statistics

Global variables are placeholders for values that may change during the simula-
tion. What makes them global is that they are accessible from any place in the
model by any object in the model, and they exist during the entire simulation.
Global variables are defined by the user for user-defined purposes. For
exam- ple, a variable may be defined to keep track of the total number of
entities in a certain area of the system (work in process). Each time an entity
enters the area, it increments the variable. Also, each time an entity leaves the
area, it decrements the variable. Because the user has the option of collecting
statistics on global vari- ables, either the simple or time-weighted average
value of the variable can be reported at the end of the simulation. A time
series report showing all of the changes in the variable over time can also be
reported.

Using Local Variables for Looping

Local variables are variables that are declared within the logic itself, either right
before the point of use or at the beginning of the logic block. A local variable
exists only for the current object executing the block of logic. When the object
finishes executing the logic block in which the local variable was defined, the
variable disappears. A local variable may be thought of as a temporary attribute
of the object executing the logic because multiple objects executing the same
logic at the same time would each have their own local variables assigned to
them while executing the block of logic. Local variables are useful primarily for
executing a logic loop. Suppose, for example, that you wanted to assign the
value of 4 to the first 10 elements of an array called NumOfBins that was
defined in the Array
 Chapter 7 Model Building 197

module. To do this within operation logic (or in any other logic), you would enter
something like the following, where Count is defined as a local variable:
int Count = 1
while Count < 11 do
{
NumOfBins[Count] = 4
Inc Count
}

The braces “{” and “}” are the ProModel notation (also used in C++ and
Java) for starting and ending a block of logic. In this case it is the block of
statements to be executed repeatedly by an object as long as the local variable
Count is less than 11.

7.5 Miscellaneous Modeling Issues

This section addresses special issues that may be encountered in simulation.
They don’t fit well under previous headings, so they are put in a collection
here even though they are not necessarily related.

7.5.1 Modeling Rare Occurrences

Often there exist situations in the real world that occur only rarely. For example, a
machine may break down once every two months, or only one in a thousand parts
is rejected at an inspection station. In simulation analysis, we are generally
interested in the normal behavior of the system, not extremely rare behavior. It is
advisable to ignore rare situations and exclude them from the simulation model.
This approach not only reduces modeling time but also simplifies the model and
helps maintain the focus of everyone involved in the model on key input
variables.
But some rare situations have a significant impact on the operation of the
sys- tem. For example, a plant shutdown may bring the entire operation to a
stop. If the focus of interest is to evaluate the effects of the rare occurrence, such
as how long it takes for inventories to be depleted if a shutdown occurs, then it
makes sense to include the rare occurrence in the model. The easiest way to
model a rare event is not to let the model run for six months or a year before the
event occurs, but to go ahead and force the event to happen. The point of
modeling the rare event is to see what impact it has on system behavior, not to
predict when it actually might occur. So it really doesn’t matter when it happens
as long as the state of the model is typ- ical of what the system might be when it
does occur.

7.5.2 Large-Scale Modeling

Occasionally it may be desirable to model a large system such as an entire
factory or the entire activity in an international airport. The tendency
(especially for novice simulators) is to painstakingly piece together a huge,
complex model only to find that it runs nowhere near the way that was expected
and may not even run at all. The disappointment of not getting the model to run
correctly the first time is soon overshadowed by the utter despair in trying to
debug such an enormous
198 Part I Study Chapters

model. When faced with building a supermodel, it is always a good idea to parti-
tion the model into several submodels and tackle the problem on a smaller scale
first. Once each of the submodels has been built and validated, they can be
merged into a larger composite model. This composite model can be structured
either as a single monolithic model or as a hierarchical model in which the
details of each submodel are hidden unless explicitly opened for viewing.
Several ways have been described for merging individual submodels into a
composite model (Jayaraman and Agarwal 1996). Three of the most common
ways that might be considered for integrating submodels are
• Option 1: Integrate all of the submodels just as they have been built. This
approach preserves all of the detail and therefore accuracy of the
individual submodels. However, the resulting composite model may be
enormous and cause lengthy execution times. The composite model may
be structured as a flat model or, to reduce complexity, as a hierarchical
model.
• Option 2: Use only the recorded output from one or more of the
submodels. By simulating and recording the time at which each entity
exits the model for a single submodel, these exit times can be used in
place of the submodel for determining the arrival times for the larger
model. This eliminates the need to include the overhead of the individual
submodel in the composite model. This technique, while drastically
reducing the complexity of the composite model, may not be possible if
the interaction with the submodel is two-way. For submodels representing
subsystems that simply feed into a larger system (in which case the
subsystem operates fairly independently of downstream activities), this
technique is valid. An example is an assembly facility in which fabricated
components or even subassemblies feed into a final assembly line.
Basically, each feeder line is viewed as a “black box” whose output is
read from a file.
• Option 3: Represent the output of one or more of the submodels as
statistical distributions. This approach is the same as option 2, but
instead of using the recorded output times from the submodel in the
composite model, a statistical distribution is fit to the output times and
used to generate the input to the composite model. This technique
eliminates the need for using data files that, depending on the submodel,
may be quite large. Theoretically, it should also be more accurate because
the true underlying distribution is used instead of just a sample unless
there are discontinuities in the output. Multiple sample streams can also
be generated for running multiple replications.

7.5.3 Cost Modeling

Often it is desirable to include cost in a model to determine the most cost-
effective solution to a design problem. If, for example, two operators on an
assembly line re- sult in the same performance as using three robots, the
decision may end up being based on cost rather than performance. There are two
approaches to modeling cost.
 Chapter 7 Model Building 199

One is to include cost factors in the model itself and dynamically update cost
col- lection variables during the simulation. ProModel includes a cost module
for as- signing costs to different factors in the simulation such as entity cost,
waiting cost, and operation cost. The alternative approach is to run a cost
analysis after the sim- ulation, applying cost factors to collected cost drivers
such as resource utilization or time spent in storage. The first method is best
when it is difficult to summarize cost drivers. For example, the cost per unit of
production may be based on the types of resources used and the time for using
each type. This may be a lot of in- formation for each entity to carry using
attributes. It is much easier to simply up- date the entity’s cost attribute
dynamically whenever a particular resource has been used. Dynamic cost
tracking suffers, however, from requiring cost factors to be considered during
the modeling stage rather than the analysis stage. For some models, it may be
difficult to dynamically track costs during a simulation, espe- cially when
relationships become very complex.
The preferred way to analyze costs, whenever possible, is to do a
postsimula- tion analysis and to treat cost modeling as a follow-on activity to
system model- ing rather than as a concurrent activity (see Lenz and Neitzel
1995). There are several advantages to separating the logic model from the
cost model. First, the model is not encumbered with tracking information that
does not directly affect how the model operates. Second, and perhaps more
importantly, post analysis of costs gives more flexibility for doing “what-if”
scenarios with the cost model. For example, different cost scenarios can be run
based on varying labor rates in a matter of seconds when applied to
simulation output data that are immediately available. If modeled during the
simulation, a separate simulation would have to be run applying each labor rate.

7.6 Summary

Model building is a process that takes a conceptual model and converts it to a

sim- ulation model. This requires a knowledge of the modeling paradigm of the
partic- ular simulation software being used and a familiarity with the different
modeling constructs that are provided in the software. Building a model
involves knowing what elements to include in the model and how to best
express those elements in the model. The principle of parsimony should always
be followed, which results in the most minimal model possible that achieves
the simulation objectives. Finally, the keys to successful modeling are seeing
lots of examples and practice, practice, practice!

7.7 Review Questions

1. How is modeling an art as well as a science?
2. What is a modeling paradigm?
3. Describe the modeling paradigm used in a specific simulation product.
200 Part I Study Chapters

4. Suppose you were modeling an inspection station as an object.

Identify two attributes and one behavior you might want to define for
it.
5. Identify five different things an entity might represent in a
manufacturing or service simulation.
6. For a manufacturing operation that produces 300 different part types,
how would you represent the different part types?
7. A stand and power cord are assembled to a monitor at an
assembly station. Stands are produced in-house and are not
always available when needed. Power cords are purchased
finished and are always available at the station. What entity types
(monitor, cord, or stand) would you include in the model and,
conceptually, how would you model this assembly operation?
8. Every hour, a stack of purchase orders is delivered to the purchasing
department for processing. The stack is routed sequentially to three
different people who review, approve, and send out the orders. The
orders move together as a stack, although they are processed
individually at each station. The processing time at each activity is a
function of the number of orders in the stack. The number of orders in a
stack can be determined by a probability distribution. Conceptually,
how would you model this process and still capture the essence of what
is happening?
9. What criteria would you use to identify the route stops or locations in a
flow sequence to include in a model?
10.Suppose you are modeling a system with bins in which parts are
transported. Would you model the bins as resources or entities? Justify
your answer.
11.How would you model a consumable resource such as energy
consumption that occurs based on the length of time a particular
machine is in operation?
12.What is the danger of using simple time values to model material
movement if the material handling system often encounters traffic
delays?
13.How would you use an entity attribute to model multiple routing passes
through the same location in which a different operation time is
required depending on the pass?
14.An operator must inspect every fifth part at a manual workstation.
Conceptually, how would you model this activity if the operation takes
five minutes and inspection takes two minutes?
15.When attaching entities to another entity, under what circumstances
would you want to preserve the identities of the entities being
attached?
16.Define four types of arrivals and give an example of each.
17.A factory operates with two eight-hour shifts (changeover occurs
without interruption) five days a week. If you wanted to simulate the
system for four weeks, how would you set the run length in hours?
 Chapter 7 Model Building 201

18. What is the problem with modeling downtimes in terms of mean time
between failures (MTBF) and mean time to repair (MTTR)?
19. Why should unplanned downtimes or failures be defined as a function
of usage time rather than total elapsed time on the clock?
20. In modeling repair times, how should the time spent waiting for a
repairperson be modeled?
21. What is preemption? What activities or events might preempt
other activities in a simulation?
22. A boring machine experiences downtimes every five hours
(exponentially distributed). It also requires routine preventive
maintenance (PM) after every eight hours (fixed) of operation. If a
downtime occurs within two hours of the next scheduled PM, the PM is
performed as part of the repair time (no added time is needed) and, after
completing the repair coupled with the PM, the next PM is set for eight
hours away. Conceptually, how would you model this situation?
23. A real estate agent schedules six customers (potential buyers) each day,
one every 1.5 hours, starting at 8 A.M. Customers are expected to arrive for
their appointments at the scheduled times. However, past experience shows
that customer arrival times are normally distributed with a mean equal to
the scheduled time and a standard deviation of five minutes. The time the
agent spends with each customer is normally distributed with a mean of 1.4
hours and a standard deviation of .2 hours. Develop a simulation model to
calculate the expected waiting time for customers.

Reference
s Jayaraman, Arun, and Arun Agarwal. “Simulating an Engine Plant.” Manufacturing
Engi- neering, November 1996, pp. 60–68.
Law, A. M. “Introduction to Simulation: A Powerful Tool for Analyzing Complex Manu-
facturing Systems.” Industrial Engineering, 1986, 18(5):57–58.
Lenz, John, and Ray Neitzel. “Cost Modeling: An Effective Means to Compare Alterna-
tives.” Industrial Engineering, January 1995, pp. 18–20.
Shannon, Robert E. “Introduction to the Art and Science of Simulation.” In Proceedings
of the 1998 Winter Simulation Conference, ed. D. J. Medeiros, E. F. Watson, J. S.
Carson, and M. S. Manivannan. Piscataway, NJ: Institute of Electrical and
Electronics Engineers, 1998.
Thompson, Michael B. “Expanding Simulation beyond Planning and Design.”
Industrial Engineering, October 1994, pp. 64–66.
Harrell−Ghosh−Bo I. Study 8. Model © The
wden: Simulation Chapters Verification and McGraw−Hill
Using ProModel, Validation Companies,
Second Edition

C H A P T E R

8 MODEL
VERIFICATION AND
VALIDATION

“Truth comes out of error more easily than out of confusion.”

—Francis Bacon

8.1 Introduction
Building a simulation model is much like developing an architectural plan for a
house. A good architect will review the plan and specifications with the client
or owner of the house to ensure that the design meets the client’s expectations.
The architect will also carefully check all dimensions and other specifications
shown on the plan for accuracy. Once the architect is reasonably satisfied that
the right information has been accurately represented, a contractor can be given
the plan to begin building the house. In a similar way the simulation analyst
should examine the validity and correctness of the model before using it to
make implementation decisions.
In this chapter we cover the importance and challenges associated with
model verification and validation. We also present techniques for verifying and
validat- ing models. Balci (1997) provides a taxonomy of more than 77
techniques for model verification and validation. In this chapter we give only a
few of the more common and practical methods used. The greatest problem
with verification and validation is not one of failing to use the right techniques
but failing to use any technique. Questions addressed in this chapter include the
following:
• What are model verification and validation?
• What are obstacles to model verification and validation?
• What techniques are used to verify and validate a model?
• How are model verification and validation maintained?
Two case studies are presented at the end of the chapter showing how verifi-
cation and validation techniques have been used in actual simulation projects.

203
204 Part I Study Chapters

8.2 Importance of Model Verification and Validation

Model building is, by nature, very error prone. The modeler must translate the
real-world system into a conceptual model that, in turn, must be translated into a
simulation model. This translation process is iterative as the modeler’s
conception of the real system changes and the modeling approach continues to
be refined (see Figure 8.1). In this translation process, there is plenty of room for
making errors. Verification and validation processes have been developed to
reduce and ideally eliminate these errors.
Model verification is the process of determining whether the simulation
model correctly reflects the conceptual model. Model validation is the process of
determining whether the conceptual model correctly reflects the real system.
Model verification and validation are critical to the success of a simulation
project. Important decisions may be based on the outcome of the simulation ex-
periment, and, therefore, demonstrable evidence should exist for the validity of
the model. For simulations that are used on an ongoing basis for operational
deci- sions such as production scheduling, model validation is even more
important. The Department of Defense (DoD) has recognized the
importance of model validation and has established a defined set of criteria
for determining model accreditation. Accreditation, as defined by DoD
(http://www.dmso.mil/docslib/ mspolicy/glossary/9801glss.doc), is “The
official certification that a model or simulation is acceptable for use for a
specific purpose.”

8.2.1 Reasons for Neglect

Despite their importance, seldom is adequate attention given to verification
and validation when doing simulation. The primary reasons for neglecting this

FIGURE 8.1 System

Two-step
translation process
to convert a real-
world system to a
simulation model.

Concept

Model
 Chapter 8 Model Verification and Validation 205

important activity are

• Time and budget pressures.
• Laziness.
• Overconfidence.
• Ignorance.
Time and budget pressures can be overcome through better planning and in-
creased proficiency in the validation process. Because validation doesn’t have to
be performed to complete a simulation study, it is the activity that is most likely
to get shortchanged when pressure is being felt to complete the project on time
or within budget. Not only does the modeler become pressed for time and
resources, but often others on whom the modeler relies for feedback on model
validity also become too busy to get involved the way they should.
Laziness is a bit more difficult to deal with because it is characteristic of
human nature and is not easily overcome. Discipline and patience must be
devel- oped before one is willing to painstakingly go back over a model once it
has been built and is running. Model building is a creative activity that can
actually be quite fun. Model verification and validation, on the other hand, are
a laborious effort that is too often dreaded.
The problem of overconfidence can be dealt with only by developing a more
critical and even skeptical attitude toward one’s own work. Too often it is
assumed that if the simulation runs, it must be okay. A surprising number of
deci- sions are based on invalid simulations simply because the model runs
and pro- duces results. Computer output can give an aura of validity to results
that may be completely in error. This false sense of security in computer output
is a bit like saying, “It must be true, it came out of the computer.” Having such
a naive men- tality can be dangerously misleading.
The final problem is simply a lack of knowledge of verification and valida-
tion procedures. This is a common problem particularly among newcomers to
simulation. This seems to be one of the last areas in which formal training is re-
ceived because it is presumed to be nonessential to model building and output
analysis. Another misconception of validation is that it is just another phase in
a simulation project rather than a continuous activity that should be
performed throughout the entire project. The intent of this chapter is to dispel
common mis- conceptions, help shake attitudes of indifference, and provide
insight into this im- portant activity.

8.2.2 Practices That Facilitate Verification and Validation

A major problem in verifying and validating models occurs because of poor
mod- eling practices. Beginners often build models with little or no thought
about being able to verify or validate the model. Often these models contain
spaghetti code that is difficult for anyone, including the modeler, to follow.
This problem be- comes even more acute as models grow in complexity. When
the original model builder moves on and others inherit these models, the
desperate efforts to unravel
206 Part I Study Chapters

the tangled mess and figure out what the model creator had in mind become
almost futile. It is especially discouraging when attempting to use a poorly con-
structed model for future experimentation. Trying to figure out what changes
need to be made to model new scenarios becomes difficult if not impossible.
The solution to creating models that ease the difficulty of verification and
val- idation is to first reduce the amount of complexity of the model.
Frequently the most complex models are built by amateurs who do not have
sense enough to know how to abstract system information. They code way too
much detail into the model. Once a model has been simplified as much as
possible, it needs to be coded so it is easily readable and understandable. Using
object-oriented techniques such as encapsulation can help organize model data.
The right simulation software can also help keep model data organized and
readable by providing table entries and intelligent, parameterized constructs
rather than requiring lots of low-level pro- gramming. Finally, model data and
logic code should be thoroughly and clearly documented. This means that
every subroutine used should have an explanation of what it does, where it is
invoked, what the parameters represent, and how to change the subroutine for
modifications that may be anticipated.

8.3 Model Verification

Verification is the process of determining whether the model operates as
intended. It doesn’t necessarily mean that the model is valid, only that it runs
correctly. According to Banks, et al. (2001), “Verification is concerned with
building the model right. It is utilized in the comparison of the conceptual
model to the com- puter representation that implements that conception.”
Model verification in- volves the modeler more than the customer. During the
verification process, the modeler tries to detect unintended errors in the model
data and logic and remove them. In essence, verification is the process of
debugging the model. A verified model is a bug-free model.
Errors or bugs in a simulation model are of two types: syntax errors and se-
mantic errors. Syntax errors are like grammatical errors and include the uninten-
tional addition, omission, or misplacement of notation that either prevents the
model from running or causes it to run incorrectly. The omission or
misplacement of a decimal point in a number or parentheses in an expression
can dramatically impact the outcome of a simulation. Most simulation software
has built-in error detection that can identify inconsistencies and omissions.
This feature is much like spelling and grammar checking in a word processor.
As with a word proces- sor, however, it still remains the responsibility of the
user to ensure that the in- tended meaning has been conveyed.
Semantic errors are associated with the meaning or intention of the modeler
and are therefore difficult to detect. Often they are logical errors that cause
behav- ior that is different than what was intended. For example, an if–then test
on a vari- able may branch to the wrong logic simply because the condition was
incorrectly specified or the branching was not set up correctly. Or numerical
values may
Chapter 8 Model Verification and Validation 207

be misentered and therefore result in the wrong intended behavior. Verification

techniques discussed here, such as event tracing and code debugging, can help
identify and correct semantic errors.

8.3.1 Preventive Measures

Obviously, the preferred method of dealing with model bugs is to avoid building
models with bugs in the first place. In practice, this isn’t always possible as bugs
are often sneaky and difficult to prevent. However, a few basic practices can
min- imize the number of bugs that find their way into models. The most
important practice is to simply be careful. This means focusing on what you are
doing and eliminating distractions that may cause you to make silly typing
mistakes. You should check and double-check the data and your entry of
those data into the model to make sure there are no transcription errors.
Another practice that has been used successfully for years in software
development for ensuring good code is called structured programming. Hoover
and Perry (1990) describe five basic principles of structured programming:
1. Top-down design. The simulation model and the code begin at a high
level, and then lower-level areas are added that are congruent with, yet
subordinate to, the top level. It is a hierarchical approach to modeling.
A routing to a six-machine cell may initially be defined to the cell as
a whole and then later decomposed to route to each individual
workstation.
2. Modularity. The model is built in modules or logical divisions to
simplify model development and debugging and to facilitate reuse.
Where possible, data modules should be separate from the logic
modules so that data can be easily accessed.
3. Compact modules. Modules should be kept as short and simple as
possible. Subroutines consisting of over 25 statements, for example,
should probably be broken into multiple subroutines.
4. Stepwise refinement. The model is built with complexity being
progressively added. In stepwise refinement, one goes from general to
specific so that generalities and assumptions are refined into precise
and accurate details. The idea is to create the model in multiple
passes, filling in additional details with each pass. At each pass, a test
for reasonableness can be made. It is easier to verify a model when the
model is built incrementally than when it is built all at once.
5. Structured control. GOTO statements or other unstructured
branching of control should be avoided wherever possible as they
may lead to
unexpected results. Logic control should be based on structured control
statements such as
IF-THEN-ELSE
WHILE...DO
DO...WHILE
(etc.)
208 Part I Study Chapters

8.3.2 Establishing a Standard for Comparison

Verifying a model presupposes that some standard exists for comparison, pro-
viding a sense of whether the model is running correctly. Obviously, if you knew
exactly how the simulation should run and what results should be expected, you
wouldn’t need to be doing the simulation in the first place. Several reasonable
standards can be used for model comparison. One simple standard is common
sense (although someone has said that common sense isn’t all that common). If
your simulation is giving totally bizarre results, you know you have a problem
somewhere in your model. Say, for example, that you define a machine
downtime to occur every two hours for two minutes and yet the simulation
results show that the machine was down 80 percent of the time. Common sense
tells you that the re- sults don’t make sense and indicates that you should check
how you defined the downtime behavior.
Another way to establish a sense of correctness is to construct an analytic
model of the problem if at all possible. Because of the simplified assumptions
made in most analytic techniques, it may be necessary to scale back the model to
verify only its basic operation. It may be necessary, for example, to run the simu-
lation without downtimes because failures may complicate an analytic formula-
tion. As additional examples, we may operate a queuing system without
balking, or we may use instantaneous replenishment rather than random lead
times in an inventory model. In these cases, the simplified model may be one
that can be an- alyzed without simulation, and the mathematical results can then
be compared to those from the simulation. In this way we can get an
indication of whether the simulation model, or at least a simplified version of it,
is correct.

8.3.3 Verification Techniques

Once everything has been done at the outset to ensure that the model has been
built correctly and a standard for comparison has been established, several
techniques can be used to verify the model. Some of the more common ways
include
• Conduct model code reviews.
• Check the output for reasonableness.
• Watch the animation for correct behavior.
• Use the trace and debug facilities provided with the software.

Reviewing Model Code

A model code review can be conducted by either the modeler or someone else
familiar with both modeling and the system being modeled. The purpose of the
model code review is to check for errors and inconsistencies. The simulation
model can be tested in either a bottom-up or top-down fashion. In the bottom-up
testing method, also called unit testing, the lowest modules are tested and
verified first. Next, interfaces between two or more modules are tested. This is
continued until the model can be tested as a single system.
Chapter 8 Model Verification and Validation 209

In the top-down approach, the verification testing begins with the main
mod- ule and moves down gradually to lower modules. At the top level, you
are more interested that the outputs of modules are as expected given the inputs.
If discrep- ancies arise, lower-level code analysis is conducted.
In both approaches sample test data are used to test the program code. The
bottom-up approach typically requires a smaller set of data to begin with. After
exercising the model using test data, the model is stress tested using extreme
input values. With careful selection, the results of the simulation under extreme
condi- tions can be predicted fairly well and compared with the test results.

Checking for Reasonable Output

In any simulation model, there are operational relationships and quantitative val-
ues that are predictable during the simulation. An example of an operational
rela- tionship is a routing that occurs whenever a particular operation is
completed. A predictable quantitative value might be the number of boxes on a
conveyor always being between zero and the conveyor capacity. Often the
software itself will flag values that are out of an acceptable range, such as an
attempt to free more re- sources than were captured.
For simple models, one way to help determine reasonableness of the output
is to replace random times and probabilistic outcomes with constant times and
de- terministic outcomes in the model. This allows you to predict precisely what
the results will be because the analytically determined results should match
the re- sults of the simulation.

Watching the Animation

Animation can be used to visually verify whether the simulation operates the
way you think it should. Errors are detected visually that can otherwise go
unnoticed. The animation can be made to run slowly enough for the analyst to
follow along visually. However, the amount of time required to observe an
entire simulation run can be extremely long. If the animation is sped up, the
runtime will be smaller, but inconsistent behavior will be more difficult to
detect.
To provide the most meaningful information, it helps to have interactive
simulation capability, which allows the modeler to examine data associated with
simulation objects during runtime. For example, during the simulation, the user
can view the current status of a workstation or resource to see if state variables
are being set correctly.
Animation is usually more helpful in identifying a problem than in
discover- ing the cause of a problem. The following are some common
symptoms apparent from the animation that reveal underlying problems in the
model:
• The simulation runs fine for hours and even days and then suddenly freezes.
• A terminating simulation that should have emptied the system at the
end of the simulation leaves some entities stranded at one or more
locations.
• A resource sits idle when there is plenty of work waiting to be done.
• A particular routing never gets executed.
210 Part I Study Chapters

Using Trace and Debugging Facilities

Trace and debugging information provides detailed textual feedback of what is
happening during a simulation. This allows the modeler to look under the hood
and see exactly what is going on inside the simulation. Most simulation software
comes with some sort of trace and debugging facility. At a minimum, manual
trace or debugging information can be coded into the simulation model that is ei-
ther deleted or disabled once the model is debugged. The following logic, for
ex- ample, might be inserted somewhere in the model logic to test whether a
resource is available at a specific time.
If OperatorState = busy
Then display "Operator is busy"
Else display "Operator is NOT busy"

Trace messages describe chronologically what happens during the simula-

tion, event by event. A typical trace message might be the time that an entity
enters a particular location or the time that a specific resource is freed. Trace
mes- saging can be turned on or off, and trace messages can usually be either
displayed directly on the screen or written to a file for later analysis. In
ProModel, tracing can also be turned on and off programmatically by entering a
Trace command at appropriate places within the model logic. A segment of an
example of a trace message listing is shown in Figure 8.2. Notice that the
simulation time is shown in the left column followed by a description of what is
happening at that time in the right column.
Another way in which behavior can be tracked during a simulation run
is through the use of a debugger. Anyone who has used a modern commercial
com- piler to do programming is familiar with debuggers. A simulation
debugger is a utility that displays and steps through the actual logic entered by
the user to define the model. As logic gets executed, windows can be opened to
display variable and

FIGURE 8.2
Fragment of a trace
listing.
 Chapter 8 Model Verification and Validation 211

FIGURE 8.3
ProModel debugger
window.

state values as they dynamically change. Like trace messaging, debugging can
be turned on either interactively or programmatically. An example of a
debugger window is shown in Figure 8.3.
Experienced modelers make extensive use of trace and debugging capabili-
ties. Animation and output reports are good for detecting problems in a simula-
tion, but trace and debug messages help uncover why problems occur.
Using trace and debugging features, event occurrences and state variables
can be examined and compared with hand calculations to see if the program is
op- erating as it should. For example, a trace list might show when a particular
oper- ation began and ended. This can be compared against the input operation
time to see if they match.
One type of error that a trace or debugger is useful in diagnosing is gridlock.
This situation is caused when there is a circular dependency where one action
de- pends on another action, which, in turn, is dependent on the first action. You
may have experienced this situation at a busy traffic intersection or when
trying to leave a crowded parking lot after a football game. It leaves you with
a sense of utter helplessness and frustration. An example of gridlock in
simulation some- times occurs when a resource attempts to move a part from
one station to another, but the second station is unavailable because an entity
there is waiting for the same resource. The usual symptom of this situation is
that the model appears to freeze up and no more activity takes place. Meanwhile
the simulation clock races rapidly forward. A trace of events can help detect
why the entity at the second sta- tion is stuck waiting for the resource.
212 Part I Study Chapters

8.4 Model Validation

Validation is the process of determining whether the model is a meaningful and
accurate representation of the real system (Hoover and Perry 1990). Where veri-
fication is concerned with building the model right, validation is concerned with
building the right model. For this reason, stakeholders and customers should
become heavily involved in the validation process.
Because the process of validation can be very time-consuming and
ultimately somewhat elusive, we are not interested in achieving absolute
validity but only functional validity. As Neelamkavil (1987) explains, “True
validation is a philo- sophical impossibility and all we can do is either
invalidate or ‘fail to invalidate.’ ” From a functional standpoint, model
validation is viewed as the process of estab- lishing “that the model’s output
behavior has sufficient accuracy for the model’s intended purpose over the
domain of the model’s intended applicability” (Sargent 1998). Through
validation we convey to the user or the customer that the simula- tion results can
be trusted and used to make real-world decisions. A model can be valid even
when many simplifications may have been made and details omitted while
building the model. What we are seeking is not certainty but rather a com- fort
level in the results.
For existing systems or when building an “as-is” model, the model behavior
should correspond to that of the actual system. In the case of a new system that
is being designed, and therefore has no demonstrated performance, the input
data should accurately reflect the design specification of the system and the
model should be carefully verified.
A model may run correctly (it has been verified) but still not be an accurate
representation of the system (it is invalid). Validation can be thought of as a real-
ity check (not to be confused with a sanity check, which people who do simula-
tion may frequently need). If a model is based on accurate information, and the
model has been verified to work as intended, then the model can be said to be a
valid model. A model that has bugs cannot be a valid model (unless purely by
ac- cident), thus the importance of verification in the validation process.
Validation actually begins with the data-gathering stage of a simulation pro-
ject before a model is even built. It is the garbage-in, garbage-out syndrome that
should be avoided. If you use erroneous data in the model, the model may work
perfectly fine (it has been verified) yet still give misleading results. Data valida-
tion issues were addressed in Chapter 6, “Data Collection and Analysis.” By
way of review, data validation is a matter of verifying that the sources of
information are reliable and that source data have been correctly interpreted. For
example, the process used to fit distributions to sample data may be checked.
Any assumptions should also be reviewed and approved by those in a position
to give an informed opinion about the validity of the assumptions. Having
valid information on the system being modeled means that the conceptual
model of the system is valid. At this point, creating a valid simulation model
essentially consists of creating a model that is verified or, in other words,
that corresponds with the conceptual model.
Chapter 8 Model Verification and Validation 213

8.4.1 Determining Model Validity

There is no simple test to determine the validity of a model. Validation is an in-
ductive process in which the modeler draws conclusions about the accuracy of
the model based on the evidence available. Several techniques are given here
that are described by Sargent (1998). Some of them tend to be rather subjective,
while others lend themselves to statistical tests such as hypothesis tests and
confidence intervals. Many of the techniques are the same as those used to
verify a model, only now the customer and others who are knowledgeable about
the system need to be involved. As with model verification, it is common to use
a combination of techniques when validating a model.
• Watching the animation. The visual animation of the operational behavior
of the model is compared with one’s knowledge about how the actual
system behaves. This can include dynamic plots and counters that
provide dynamic visual feedback.
• Comparing with the actual system. Both the model and the system are
run under the same conditions and using the same inputs to see if the
results match.
• Comparing with other models. If other valid models have been built of
the process such as analytic models, spreadsheet models, and even other
valid simulation models, the output of the simulation can be compared to
these known results. For example, a simple simulation model might be
compared to a validated queuing model.
• Conducting degeneracy and extreme condition tests. There are known
situations for which model behavior degenerates, causing a particular
response variable to grow infinitely large. An example is the number of
items in a queue prior to a server where the service rate is less than the
arrival rate. These situations can be forced in the model (by increasing
the number of arrivals) to see if the model degenerates as expected. The
model can also be run under extreme conditions to see if it behaves as
would be expected. For example, if arrivals are cut off, the model should
eventually run dry of entities.
• Checking for face validity. Face validity is checked by asking people who
are knowledgeable about the system whether the model and its behavior
appear reasonable. This technique can be used in determining if the logic
in the conceptual model is correct and if a model’s input–output
relationships are reasonable.
• Testing against historical data. If historical information exists for both
operating and performance data, the model can be tested using the same
operating data and comparing the results with the historical performance
data. This is sort of an “as-once-was” model.
• Performing sensitivity analysis. This technique consists of changing
model input values to determine the effect on the model’s behavior and its
output. The same relationships should occur in the model as in the real
214 Part I Study Chapters

system. The modeler should have at least an intuitive idea of how the
model will react to a given change. It should be obvious, for example, that
doubling the number of resources for a bottleneck operation should
increase, though not necessarily double, throughput.
• Running traces. An entity or sequence of events can be traced through
the model processing logic to see if it follows the behavior that would
occur in the actual system.
• Conducting Turing tests. People who are knowledgeable about the
operations of a system are asked if they can discriminate between
system and model outputs. If they are unable to detect which outputs are
the model outputs and which are the actual system outputs, this is
another piece of evidence to use in favor of the model being valid.
A common method of validating a model of an existing system is to
compare the model performance with that of the actual system. This approach
requires that an as-is simulation be built that corresponds to the current
system. This helps “calibrate” the model so that it can be used for simulating
variations of the same model. After running the as-is simulation, the
performance data are compared to those of the real-world system. If sufficient
data are available on a performance measure of the real system, a statistical
test can be applied called the Student’s t test to determine whether the
sampled data sets from both the model and the actual system come from the
same distribution. An F test can be performed to test the equality of variances of
the real system and the simulation model. Some of the problems associated with
statistical comparisons include these:
• Simulation model performance is based on very long periods of time. On
the other hand, real system performances are often based on much
shorter periods and therefore may not be representative of the long-term
statistical average.
• The initial conditions of the real system are usually unknown and are
therefore difficult to replicate in the model.
• The performance of the real system is affected by many factors that may
be excluded from the simulation model, such as abnormal downtimes or
defective materials.
The problem of validation becomes more challenging when the real system
doesn’t exist yet. In this case, the simulation analyst works with one or more
experts who have a good understanding of how the real system should operate.
They team up to see whether the simulation model behaves reasonably in a vari-
ety of situations. Animation is frequently used to watch the behavior of the
simu- lation and spot any nonsensical or unrealistic behavior.
The purpose of validation is to mitigate the risk associated with making de-
cisions based on the model. As in any testing effort, there is an optimum amount
of validation beyond which the return may be less valuable than the investment
(see Figure 8.4). The optimum effort to expend on validation should be based on
minimizing the total cost of the validation effort plus the risk cost associated
 Chapter 8 Model Verification and Validation 215

FIGURE 8.4
Optimum level of Optimum effort
validation looks at
the trade-off between
Total cost Validation cost
validation cost and Cost
risk cost.

Risk cost

Validation effort

with making a decision based on an invalid model. As mentioned previously, the

problem is seldom one of devoting too much time to validation, but in devoting
too little.

8.4.2 Maintaining Validation

Once a model is validated for a given system specification, it is sometimes
neces- sary to maintain validation as system specifications tend to evolve right
up to, and often even after, system implementation. When simulation is used
for system design, rarely is the system implemented the way it was
originally simulated, especially when traditional, over-the-wall handoff
procedures are used. These continuous changes make it nearly impossible to
validate the simulation against the final implemented system. Unfortunately,
results of the implemented system sometimes get compared with the early
simulation model, and the simulation is unfairly branded as being invalid. This
is another good reason for continuing to update the model to continually reflect
current system design specifications.
One method that works effectively for maintaining validation of a model
designed for ongoing use is to deny users access to the model data so that
modifi- cations to the model are controlled. ProModel, for example, allows a
modeler to protect the model data using the packaging option under the File
menu. This pre- vents anyone from changing the actual model data directly.
Modifications to the model can be made only through a custom interface that
controls precisely what parameters of the model can be changed as well as the
extent to which they can be changed.

8.4.3 Validation Examples

To illustrate how the validation process might be performed for a typical sim-
ulation, we look at two simulation case studies. The first one was conducted
at St. John Hospital and Medical Center for an obstetrical renovation project
(O’Conner 1994). The second project was conducted at HP for a surface mount
assembly line (Baxter and Johnson 1993). The St. John case study uses a more
216 Part I Study Chapters

informal and intuitive approach to validation, while the HP case study relies on
more formal validation techniques.

St. John Hospital and Medical Center Obstetrical Unit

At St. John Hospital and Medical Center, a simulation study was conducted by
the Management Engineering Department to plan a renovation of the obstetrical
unit to accommodate modern family demands to provide a more private,
homelike atmosphere with a family-oriented approach to patient care during
a mother’s hospital stay. The current layout did not support this approach and
had encoun- tered inefficiencies when trying to accommodate such an approach
(running new- borns back and forth and the like).
The renovation project included provision for labor, delivery, recovery, and
postpartum (LDRP) rooms with babies remaining with their mothers during the
postpartum stay. The new LDRPs would be used for both low- and high-risk
mothers. The hospital administration wanted to ensure that there would be
enough room for future growth while still maintaining high utilization of every
bed.
The purpose of the simulation was to determine the appropriate number of
beds needed in the new LDRPs as well as in other related areas of the hospital.
A secondary objective was to determine what rules should be used to process
pa- tients through the new system to make the best utilization of resources.
Because this was a radically new configuration, an as-is model was not built.
This, of course, made model validation more challenging. Data were gathered
based on actual operating records, and several assumptions were made such as
the length of stay for different patient classifications and the treatment sequence
of patients.
The validation process was actually a responsibility given to a team that was
assembled to work with the simulation group. The team consisted of the nursing
managers responsible for each OB area and the Women’s Health program direc-
tor. The first phase of the review phase was to receive team approval for the
assumptions document and flowcharts of the processes. This review was com-
pleted prior to developing the model. This assumptions document was
continually revised and reviewed throughout the duration of the project.
The next phase of the review came after all data had been collected and ana-
lyzed. These reviews not only helped ensure the data were valid but established
trust and cooperation between the modeling group and the review team. This
began instilling confidence in the simulation even before the results were
obtained.
Model verification was performed during model building and again at
model completion. To help verify the model, patients, modeled as entities, were
traced through the system to ensure that they followed the same processing
sequence shown on the flowcharts with the correct percentages of patients
following each probabilistic branch. In addition, time displays were placed in
the model to verify the length of stay at each step in the process.
Model validation was performed with both the nursing staff and physician
representatives. This included comparing actual data collected with model
results where comparisons made sense (remember, this was a new
configuration being
Chapter 8 Model Verification and Validation 217

modeled). The animation that showed the actual movement of patients and use
of resources was a valuable tool to use during the validation process and
increased the credibility of the model.
The use of a team approach throughout the data-gathering and model
development stages proved invaluable. It both gave the modeler immediate feed-
back regarding incorrect assumptions and boosted the confidence of the team
members in the simulation results. The frequent reviews also allowed the group
to bounce ideas off one another. As the result of conducting a sound and
convincing simulation study, the hospital’s administration was persuaded by
the simulation results and implemented the recommendations in the new
construction.

HP Surface Mount Assembly Line

At HP a simulation study was undertaken to evaluate alternative production lay-
outs and batching methods for a surface mount printed circuit assembly line
based on a projected growth in product volume/mix. As is typical in a
simulation pro- ject, only about 20 percent of the time was spent building the
model. The bulk of the time was spent gathering data and validating the model.
It was recognized that the level of confidence placed in the simulation results
was dependent on the degree to which model validity could be established.
Surface mount printed circuit board assembly involves placing electronic
components onto raw printed circuit boards. The process begins with solder
paste being stenciled onto the raw circuit board panel. Then the panel is
transported to sequential pick-and-place machines, where the components are
placed on the panel. The component feeders on the pick-and-place machines
must be changed depending on the components required for a particular board.
This adds setup time to the process. A third of the boards require manual
placement of certain compo- nents. Once all components are placed on the
board and solder pasted, the board proceeds into an oven where the solder paste
is cured, bonding the components to the panel. Finally, the panel is cleaned and
sent to testing. Inspection steps occur at several places in the line.
The HP surface mount line was designed for a high-mix, low-volume
produc- tion. More than 100 different board types are produced on the line with
about 10 different types produced per day. The batch size for a product is
typically less than five panels, with the typical panel containing five boards.
A simulation expert built the model working closely with the process
owners—that is, the managers, engineers, and production workers. Like many
simulations, the model was first built as an as-is model to facilitate model
valida- tion. The model was then expanded to reflect projected requirements
and pro- posed configurations.
The validation process began early in the data-gathering phase with
meetings being held with the process owners to agree on objectives, review
the assump- tions, and determine data requirements. Early involvement of the
process owners gave them motivation to see that the project was successful. The
first step was to clarify the objectives of the simulation that would guide the
data-gathering and modeling efforts. Next a rough model framework was
developed, and the initial
218 Part I Study Chapters

assumptions were defined based on process information gathered from the

process owners. As the model development progressed, further assumptions
were made, and decisions were made and agreed upon regarding the level of
detail re- quired to capture the essence of the process.
The flow logic and move times were built into the model, but processing
and setup times, since they were so varied and numerous, were put into a
common lookup table so they could be verified and modified easily. The
particular board sequence and batch size were also defined for the model.
The next step was to verify the model to ensure that it operated as intended.
The simulation output was reviewed for reasonableness and a trace was used to
check the model logic where it was complex. In reality, much of this verification
was performed as the model was built because it was necessary for getting the
model just to run. Note that the modeler was the one primarily responsible for
ver- ifying or debugging the model. This makes sense inasmuch as the modeler
had a clear specification and was the one responsible for fashioning the model to
fit the specification.
After the modeler was satisfied that the model was running correctly, all of
the assumptions were reviewed again by the production operators, supervisors,
and engineers. These assumptions were more meaningful as they were able
to watch their impact on the simulation performance. Animation was used to
com- municate model behavior and demonstrate the scope of the model.
Those who were familiar with the operation of the real line were able to confirm
whether the model appeared to be working reasonably correctly. When
explaining how the model was built, it was important to describe the
modeling constructs using familiar terminology because the process owners
were not versed in modeling terminology.
At this point it would be easy to conclude that the model was valid and
ready for use in conducting experiments. The challenging question with the
model be- came “Is it the right model?” A simulation model is viewed much
more critically once it is running and it is realized that important decisions will
soon be based on the results of the simulation experiments. With the model
running correctly and providing output that was consistent with the assumptions
that were made, it was felt that the assumptions should be challenged more
critically. Because the initial data that were gathered—that is, processing times
and setup times—were based on average times with no reflection of variability,
decisions had to be made about how much more data should be gathered or
what modifications in assumptions needed to be made before there was
sufficient confidence in the model. Compo- nent placement times were studied
using classical time-study techniques to achieve more realistic time estimates.
Next the average placement times were used to calculate the average run time
for a particular panel, and these were com- pared to the recorded run times.
Historical data and further time studies were used to validate the output.
A particular sequence of panels was studied as it was processed, recording the
batch size, the start time, the finish time, and some intermediate times. The
model was then run using this exact same scenario, and the output was
compared with the
 Chapter 8 Model Verification and Validation 219

output of the real process. The initial model predicted 25 shifts to complete a
spe- cific sequence of panels, while the process actually took 35 shifts. This
led to further process investigations of interruptions or other processing
delays that weren’t being accounted for in the model. It was discovered that
feeder replace- ment times were underestimated in the model. A discrepancy
between the model and the actual system was also discovered in the utilization
of the pick-and-place machines. After tracking down the causes of these
discrepancies and making appropriate adjustments to the model, the simulation
results were closer to the real process. The challenge at this stage was not to
yield to the temptation of making arbitrary changes to the model just to get the
desired results. Then the model would lose its integrity and become nothing
more than a sham for the real system.
The final step was to conduct sensitivity analysis to determine how model
performance was affected in response to changes in model assumptions. By
changing the input in such a way that the impact was somewhat predictable, the
change in simulation results could be compared with intuitive guesses. Any
bizarre results such as a decrease in work in process when increasing the arrival
rate would raise an immediate flag. Input parameters were systematically
changed based on a knowledge of both the process behavior and the model
operation. Knowing just how to stress the model in the right places to test its
robustness was an art in itself. After everyone was satisfied that the model
accurately reflected the actual operation and that it seemed to respond as would
be expected to specific changes in input, the model was ready for experimental
use.

8.5 Summary

For a simulation model to be of greatest value, it must be an accurate representa-

tion of the system being modeled. Verification and validation are two activities
that should be performed with simulation models to establish their credibility.
Model verification is basically the process of debugging the model to ensure
that it accurately represents the conceptual model and that the simulation runs
cor- rectly. Verification involves mainly the modeler without the need for much
input from the customer. Verification is not an exact science, although several
proven techniques can be used.
Validating a model begins at the data-gathering stage and may not end until
the system is finally implemented and the actual system can be compared to the
model. Validation involves the customer and other stakeholders who are in a
position to provide informed feedback on whether the model accurately reflects
the real system. Absolute validation is philosophically impossible, although a
high degree of face or functional validity can be established.
While formal methods may not always be used to validate a model, at least
some time devoted to careful review should be given. The secret to validation is
not so much the technique as it is the attitude. One should be as skeptical as can
be tolerated—challenging every input and questioning every output. In the end,
the decision maker should be confident in the simulation results, not because he
or
220 Part I Study Chapters

she trusts the software or the modeler, but because he or she trusts the input data
and knows how the model was built.

8.6 Review Questions

1. What is the difference between model verification and model validation?
2. Why are verification and validation so important in a simulation study?
3. Why are these steps often ignored or given only little attention?
4. How can one prevent syntax and semantic errors from creeping into
a simulation model?
5. How does one establish a standard for verifying a model?
6. What techniques are used to verify a model?
7. Why is it philosophically impossible to prove model validity?
8. What is functional validity?
9. What techniques are used to validate a model?
10. Why is it useful to build an as-is model if a change to an
existing system is being evaluated?
11.What specific things were done in the St. John Hospital simulation
study to validate the model?
12. What specific steps were taken in the HP simulation study to
validate the model?

References
Balci, Osman. “Verification, Validation and Accreditation of Simulation Models.” In Pro-
ceedings of the 1997 Winter Simulation Conference, ed. S. Andradottir, K. J. Healy,
D. H. Withers, and B. L. Nelson, 1997, pp. 135–41.
Banks, Jerry. “Simulation Evolution.” IIE Solutions, November 1998, pp. 26–29.
Banks, Jerry, John Carson, Barry Nelson, and David Nicol. Discrete-Event Simulation,
3rd ed. Englewood Cliffs, NJ: Prentice-Hall, 1995.
Baxter, Lori K., and Johnson, Eric. “Don’t Implement before You Validate.” Industrial
Engineering, February 1993, pp. 60–62.
Hoover, Stewart, and Ronald Perry. Simulation: A Problem Solving Approach. Reading,
MA: Addison-Wesley, 1990.
Neelamkavil, F. Computer Simulation and Modeling. New York: John Wiley & Sons,
1987. O’Conner, Kathleen. “The Use of a Computer Simulation Model to Plan an
Obstetrical Renovation Project.” The Fifth Annual PROMODEL Users Conference,
Park City,
UT, 1994.
Sargent, Robert G. “Verifying and Validating Simulation Models.” In Proceedings of the
1998 Winter Simulation Conference, ed. D. J. Medeiros, E. F. Watson, J. S. Carson,
and M. S. Manivannan, 1998, pp. 121–30.
Harrell−Ghosh−Bo I. Study 9. Simulation © The
wden: Simulation Chapters Output McGraw−Hill
Using ProModel, Analysis Companies,
Second Edition

C H A P T E R

9 SIMULATION
OUTPUT ANALYSIS

“Nothing is more terrible than activity without insight.”

—Thomas Carlyle

9.1 Introduction
In analyzing the output from a simulation model, there is room for both rough
analysis using judgmental procedures as well as statistically based procedures
for more detailed analysis. The appropriateness of using judgmental
procedures or statistically based procedures to analyze a simulation’s output
depends largely on the nature of the problem, the importance of the decision,
and the validity of the input data. If you are doing a go/no-go type of analysis in
which you are trying to find out whether a system is capable of meeting a
minimum performance level, then a simple judgmental approach may be
adequate. Finding out whether a sin- gle machine or a single service agent is
adequate to handle a given workload may be easily determined by a few runs
unless it looks like a close call. Even if it is a close call, if the decision is not
that important (perhaps there is a backup worker who can easily fill in during
peak periods), then more detailed analysis may not be needed. In cases where
the model relies heavily on assumptions, it is of little value to be extremely
precise in estimating model performance. It does little good to get six decimal
places of precision for an output response if the input data warrant only
precision to the nearest tens. Suppose, for example, that the arrival rate of
customers to a bank is roughly estimated to be 30 plus or minus 10 per hour. In
this situation, it is probably meaningless to try to obtain a precise estimate of
teller utilization in the facility. The precision of the input data simply doesn’t
warrant any more than a rough estimate for the output.
These examples of rough estimates are in no way intended to minimize the
importance of conducting statistically responsible experiments, but rather to em-
phasize the fact that the average analyst or manager can gainfully use simulation

221
222 Part I Study Chapters

without having to be a professional statistician. Anyone who understands the

cause-and-effect relationships of a system will be able to draw meaningful
conclusions about it that will help in design and management decisions. Where
precision is important and warranted, however, a statistical background or at
least consulting with a statistical advisor will help avoid drawing invalid
inferences from simulation.
In this chapter, we present basic statistical issues related to the analysis and
interpretation of simulation output. The intent is not to make you an “expert”
sta- tistician, but to give you sound guidelines to follow when dealing with the
output generated by simulation models. For more comprehensive coverage of
statistical methods, see Hines and Montgomery (1990).

9.2 Statistical Analysis of Simulation Output

Because random input variables (such as activity times) are used to drive the
model, the output measures of the simulation (throughput rate, average waiting
times) are also going to be random. This means that performance metrics based
on a model’s output are only estimates and not precise measures. Suppose,
for example, we are interested in determining the throughput for a model of a
manu- facturing system (like the number of widgets produced per hour).
Suppose further that the model has a number of random input variables such as
machining times, time between machine failures, and repair times. Running
the simulation once provides a single random sample of the model’s fluctuating
throughput that may or may not be representative of the expected or average
model throughput. This would be like rolling a die, getting a 1, and concluding
that the expected average value of the die is 1 instead of the true average of 3.5.
Statistical analysis of simulation output is based on inferential or descriptive
statistics. In descriptive statistics, we deal with a population, samples from the
population, and a sample size. The population is the entire set of items or out-
comes (such as all possible values that can be obtained when rolling a die). A
sam- ple would be one unbiased observation or instance of the population (a
single roll of a die). The sample size is the number of samples we are working
with (a par- ticular number of rolls of a die). The collected samples are
independent (each roll of the die is unaffected by previous rolls of the die). The
idea behind inferential statistics is to gather a large enough sample size to
draw valid inferences about the population (such as the average value of the
die) while keeping the sample- gathering time and cost at a minimum. In some
instances, collecting samples can be very time-consuming and costly.
The same statistical concepts apply to conducting an experiment with a
simu- lation model of a system that apply to sampling from a population such as
rolls of a die or a group of people:
• Samples are generated by running the experiment.
• The population size is often very large or infinite (there are an infinite
number of possible outcomes from the experiment).
Chapter 9 Simulation Output Analysis 223

• A random variable is used to express each possible outcome of

an experiment as a continuous or discrete number.
• Experimental samples, called replications, are independent.
Multiple independent runs or replications of a simulation provide multiple
obser- vations that can be used to estimate the expected value of the model’s
output re- sponse (like rolling the die multiple times before estimating an
expected or mean value). With random simulation output results, we can’t
determine for certain what the true expected output will be from the model
unless in some cases we run an infinite number of replications, which is not
possible or even desirable.

9.2.1 Simulation Replications

In conducting a simulation experiment, one run of the simulation constitutes one
replication of the experiment. The outcome of a replication represents a single
sample. To obtain a sample size n, we need to run n independent replications of
the experiment. A representative sample size will be a good indicator of what
can be expected to happen for any subsequent replication. Not every replication
will produce exactly the same behavior due to random variability. To understand
how independent replications are produced in simulation, it is essential to
understand the concepts of random number generation and initial seed values.
These subjects were elaborated on in Chapter 3 but will be reviewed here.

Random Number Generation

At the heart of a stochastic simulation is the random number generator. The
random number generator produces a cycling sequence of pseudo-random
numbers that are used to generate observations from various distributions
(normal, exponential, or others) that drive the stochastic processes represented in
the simulation model such as activity times, machine failure times, and travel
times. As pseudo-random num- bers, the random number sequence, or stream,
can be repeated if desired. After the random number generator sequences
through all random numbers in its cycle, the cycle starts over again through the
same sequence (see Figure 9.1). The length of the cycle before it repeats is
called the cycle period, which is usually extremely long (the cycle length for
the random number generator used in ProModel is over
2.1 billion).

Initial Seed Values

The random number generator requires an initial seed value before it can
begin producing random numbers. Each random number produced by the
generator is fed back to the generator to produce the next random number,
and so on. Where the sequence begins in the cycle depends on the initial
seed value given to the generator. In Figure 9.1, the seed value of Z 0 = 17
marks the beginning of this sequence of numbers.
You might wonder how replications are produced if the exact same
sequence of random numbers drives the simulation. Obviously, identical
random number sequences produce identical results. This may prove useful for
repeating an exact
224 Part I Study Chapters

FIGURE 9.1
.52
Example of a cycling
pseudo-random .80 .
number stream 31
produced by a
random number
generator with a very
short cycle length. .07 Random number .95 Seed Z0 = 17
generator

.25 .
60

.66

experiment but does not give us an independent replication. On the other hand,
if a different seed value is appropriately selected to initialize the random number
gen- erator, the simulation will produce different results because it will be
driven by a different segment of numbers from the random number stream. This
is how the sim- ulation experiment is replicated to collect statistically
independent observations of the simulation model’s output response. Recall that
the random number generator in ProModel can produce over 2.1 billion different
values before it cycles.
To replicate a simulation experiment, then, the simulation model is
initialized to its starting conditions, all statistical variables for the output
measures are reset, and a new seed value is appropriately selected to start the
random number gener- ator. Each time an appropriate seed value is used to start
the random number gen- erator, the simulation produces a unique output
response. Repeating the process with several appropriate seed values produces
a set of statistically independent observations of a model’s output response.
With most simulation software, users need only specify how many times they
wish to replicate the experiment; the soft- ware handles the details of initializing
variables and ensuring that each simulation run is driven by nonoverlapping
segments of the random number cycle.

9.2.2 Performance Estimation

Assuming we have an adequate collection of independent observations, we can
apply statistical methods to estimate the expected or mean value of the model’s
output response. There are two types of estimates: (1) point estimates (mean and
standard deviation, for example) and (2) interval estimates (also called
confidence intervals). This is not to say that mean and standard deviation are
the only para- meter estimates in which we may be interested. For example,
we may compute point estimates for parameters such as the proportion of time
a queue had more than 10 entities waiting in it or the maximum number of
entities to simultaneously wait in a queue location. Most simulation software
automatically calculates these and other estimates for you; however, it is useful
to know the basic procedures used to better understand their meaning.
Chapter 9 Simulation Output Analysis 225

Point Estimates
A point estimate is a single value estimate of a parameter of interest. Point
esti- mates are calculated for the mean and standard deviation of the
population. To estimate the mean of the population (denoted as µ), we simply
calculate the aver- age of the sample values (denoted as x¯ ):
n i
i =1x
n x¯ =
where n is the sample size (number of observations) and xi is the value of ith
observation. The sample mean x¯ estimates the population mean µ.
The standard deviation for the population (denoted as σ), which is a
measure of the spread of data values in the population, is similarly estimated by
calculat- ing a standard deviation of the sample of values (denoted as s):

s= in =1 [x − x¯ ]2
i
n−1
The sample variance s2, used to estimate the variance of the population σ2, is ob-
tained by squaring the sample standard deviation.
Let’s suppose, for example, that we are interested in determining the mean or
average number of customers getting a haircut at Buddy’s Style Shop on
Saturday morning. Buddy opens his barbershop at 8:00 A.M. and closes at noon
on Saturday. In order to determine the exact value for the true average number of
customers getting a haircut on Saturday morning (µ), we would have to
compute the average based on the number of haircuts given on all Saturday
mornings that Buddy’s Style Shop has been and will be open (that is, the
complete population of observations). Not want- ing to work that hard, we
decide to get an estimate of the true mean µ by spending the next 12 Saturday
mornings watching TV at Buddy’s and recording the number of customers that
get a haircut between 8:00 A.M. and 12:00 noon (Table 9.1).

TABLE 9.1 Number of Haircuts Given on 12 Saturdays

Replication (i) Number of Haircuts (xi)

1 21
2 16
3 8
4 11
5 17
6 16
7 6
8 14
9 15
10 16
11 14
12 10
Sample mean x¯ 13.67
Sample standard deviation s 4.21
226 Part I Study Chapters

We have replicated the experiment 12 times and have 12 sample obser-

vations of the number of customers getting haircuts on Saturday morning
(x1, x2 , . . . , x12). Note that there are many different values for the random
variable (number of haircuts) in the sample of 12 observations. So if only
one replication had been conducted and the single observation was used to
estimate the true but unknown mean number of haircuts given, the estimate
could potentially be way off. Using the observations in Table 9.1, we calculate
the sample mean as follows:
x¯ = 12
i =1 x 21 + 16 + 8 + · · · + 10
=
12 i = 13.67 haircuts
12
The sample mean of 13.67 haircuts estimates the unknown true mean value
µ for the number of haircuts given on Saturday at the barbershop. Taking
additional samples generally gives a more accurate estimate of the unknown µ.
However, the experiment would need to be replicated on each Saturday that
Buddy’s has been and will be open to determine the true mean or expected
number of haircuts given. In addition to estimating the population mean, we
can also calculate an estimate for the population standard deviation based on
the sample size of 12 observations and a sample mean of 13.67 haircuts. This is
done by calculating the
standard deviation s of the observations in Table 9.1 as follows:
12 [x −
s= i =1 4.21 haircuts
i 13.67]2
=
12 − 1
The sample standard deviation s provides only an estimate of the true but
unknown population standard deviation σ. x¯ and s are single values; thus they
are referred to as point estimators of the population parameters µ and σ. Also,
note that x¯ and s are random variables. As such, they will have different values if
based on another set of 12 independent observations from the barbershop.

Interval Estimates
A point estimate, by itself, gives little information about how accurately it
esti- mates the true value of the unknown parameter. Interval estimates constructed
using x¯ and s, on the other hand, provide information about how far off the
point estimate x¯ might be from the true mean µ. The method used to determine
this is referred to as confidence interval estimation.
A confidence interval is a range within which we can have a certain level
of confidence that the true mean falls. The interval is symmetric about x¯ , and
the distance that each endpoint is from x¯ is called the half-width (hw). A
confidence interval, then, is expressed as the probability P that the unknown true
mean µ lies within the interval x¯ ± hw. The probability P is called the
confidence level.
If the sample observations used to compute x¯ and s are independent and
nor- mally distributed, the following equation can be used to calculate the half-
width of a confidence interval for a given level of confidence:
(tn−1,α/2 )s
hw = √
n
Chapter 9 Simulation Output Analysis 227

where tn−1,α/2 is a factor that can be obtained from the Student’s t table in Appen-
dix B. The values are identified in the Student’s t table according to the value
of α/2 and the degrees of freedom (n − 1). The term α is the complement of P.
That is, α = 1 − P and is referred to as the significance level. The significance
level may be thought of as the “risk level” or probability that µ will fall outside
the confidence interval. Therefore, the probability that µ will fall within the
confidence interval is 1 − α. Thus confidence intervals are often stated as
P(x¯ − hw ≤ µ ≤ x¯ + hw) = 1 − α and are read as the probability that the
true but unknown mean µ falls between the interval (x¯ − hw) to (x¯ + hw) is
equal to 1 − α. The confidence interval is traditionally referred to as a 100(1 −
α) percent confidence interval.
Assuming the data from the barbershop example are independent and nor-
mally distributed (this assumption is discussed in Section 9.3), a 95 percent
con- fidence interval is constructed as follows:
Given: P = confidence level = 0.95
α = significance level = 1 − P = 1 − 0.95 = 0.05
n = sample size = 12
x¯ = 13.67 haircuts
s = 4.21 haircuts
From the Student’s t table in Appendix B, we find tn−1,α/2 = t11,0.025 = 2.201.
The half-width is computed as follows:

hw = (t11,0.025)s (2.201)4.21
√ = √ = 2.67 haircuts
n 12
The lower and upper limits of the 95 percent confidence interval are calculated as
follows:
Lower limit = x¯ − hw = 13.67 − 2.67 = 11.00 haircuts
Upper limit = x¯ + hw = 13.67 + 2.67 = 16.34 haircuts
It can now be asserted with 95 percent confidence that the true but unknown
mean falls between 11.00 haircuts and 16.34 haircuts (11.00 ≤ µhaircuts ≤
16.34). A risk level of 0.05 (α = 0.05) means that if we went through this
process for estimating the number of haircuts given on a Saturday morning
100 times and computed 100 confidence intervals, we would expect 5 of the
confidence intervals (5 percent of 100) to exclude the true but unknown mean
number of haircuts given on a Saturday morning.
The width of the interval indicates the accuracy the point estimate. It is
desirable to have a small interval with high confidence (usually 90 percent or
greater). The width of the confidence interval is affected by the variability in the
output of the system and the number of observations collected (sample size). It
can be seen from the half-width equation that, for a given confidence level, the
half-width will shrink if (1) the sample size n is increased or (2) the variability in
the output of the system (standard deviation s) is reduced. Given that we have
lit- tle control over the variability of the system, we resign ourselves to
increasing the sample size (run more replications) to increase the accuracy of
our estimates.
228 Part I Study Chapters

Actually, when dealing with the output from a simulation model, techniques
can sometimes reduce the variability of the output from the model without
chang- ing the expected value of the output. These are called variance
reduction tech- niques and are covered in Chapter 10.

9.2.3 Number of Replications (Sample Size)

Often we are interested in knowing the sample size or number of replications
needed to establish a particular confidence interval for a specified amount of ab-
solute error (denoted by e) between the point estimate of the mean x¯ and the
un- known true mean µ. In our barbershop example, suppose we want to estimate
the number of replications nt needed to be able to assert with 95 percent (1 − α =
.95) confidence that the sample mean x¯ we compute is off by at most 2.00
haircuts (e = 2.00) from the true but unknown mean µ. In other words, we
would like to reduce the half-width of 2.67 haircuts for the confidence interval
we previously computed to 2.00 haircuts.
Note that α represents the probability that the difference between x¯ and µ
will exceed a specified error amount e. In fact, e is equal to the hw of a confidence
interval (x¯ ± e). Setting e = hw and solving for n would give an equation that
could be used to estimate the number of replications necessary to meet a specified
absolute error amount e and significance level α:
hw = e
(tn−1,α/2 )s
√ = le l2
n (tn 1,α/2 )s
−
n=
e
However, this cannot be completed because n appears on each side of the
equation. So, to estimate the number of replications needed, we replace tn−1,α/2
with Zα/2, which depends only on α. The Zα/2 is from the standard normal
distribution, and its value can be found in the last row of the Student’s t table in
Appendix B. Note that Zα/2 = t∞,α/2, where ∞ denotes infinity. The revised
equation is
l l2
( Z α/2 )s
nt =
e
where n t is a rough approximation for the number of replications that will
provide an adequate sample size for meeting the desired absolute error amount e
and sig- nificance level α.
Before this equation can be used, an initial sample of observations must be
col- lected to compute the sample standard deviation s of the output from the
system. Actually, when using the Zα/2 value, an assumption is made that the true
standard deviation for the complete population of observations σ is known. Of
course, σ is not known. However, it is reasonable to approximate σ with the
sample standard de- viation s to get a rough approximation for the required
number of replications.
Chapter 9 Simulation Output Analysis 229

Going back to the barbershop example, we want to estimate the number of

replications nt needed to be able to assert with 95 percent (1 − α = .95) confi-
dence that the sample mean we compute is off by at most 2.00 haircuts
x¯
(e = 2.00) from the true but unknown mean µ. Based on the initial sample of
12 observations, we know that s = 4.21 haircuts. We compute nt as follows:
Given: P = confidence level = 0.95
α = significance level = 1 − P = 1 − 0.95 = 0.05
e = 2.00
s = 4.21 haircuts
From the last row of the Student’s t table in Appendix B, we find Zα/2 =
Z0.025 = t∞,0.025 = 1.96. Using the previous equation for nt we obtain
l
nt = l ( Z 0.025 (1.96)4.21 = 17.02 observations
l2
l2
)s =
e 2.00

A fractional number of replications cannot be conducted, so the result is

typically rounded up. Thus n t ≈ 18 observations. Given that we already have 12
observations, the experiment needs to be replicated an additional 6 (nt − n =
18 − 12 = 6) times to collect the necessary observations. After the additional
6 replications are conducted, the 6 observations are combined with the original
12 observations (Table 9.2), and a new x¯ , s, and confidence interval are
computed using all 18 observations.

TABLE 9.2 Number of Haircuts Given on 18 Saturdays

Replication (i) Number of Haircuts xi

1 21
2 16
3 8
4 11
5 17
6 16
7 6
8 14
9 15
10 16
11 14
12 10
13 7
14 9
15 18
16 13
17 16
18 8
Sample mean x¯ 13.06
Sample standard deviation s 4.28
230 Part I Study Chapters

Given: P = confidence level = 0.95

α = significance level = 1 − P = 1 − 0.95 = 0.05
n = sample size = 18
x¯ = 13.06 haircuts
s = 4.28 haircuts
From the Student’s t table in Appendix B, we find tn−1,α/2 = t17,0.025 = 2.11.
The half-width is computed as follows:

hw = (t17,0.025)s (2.11)4.28
√ = √ = 2.13 haircuts
n 18
The lower and upper limits for the new 95 percent confidence interval are calcu-
lated as follows:
Lower limit = x¯ − hw = 13.06 − 2.13 = 10.93
haircuts Upper limit = x¯ − hw = 13.06 + 2.13 =
15.19 haircuts
It can now be asserted with 95 percent confidence that the true but unknown
mean falls between 10.93 haircuts and 15.19 haircuts (10.93 ≤ µhaircuts ≤
15.19).
Note that with the additional observations, the half-width of the confidence
interval has indeed decreased. However, the half-width is larger than the absolute
error value planned for (e = 2.0). This is just luck, or bad luck, because the new
half-width could just as easily have been smaller. Why? First, 18 replications was
only a rough estimate of the number of observations needed. Second, the number
of haircuts given on a Saturday morning at the barbershop is a random
variable. Each collection of observations of the random variable will likely differ
from pre- vious collections. Therefore, the values computed for x¯ , s, and hw
will also differ. This is the nature of statistics and why we deal only in estimates.
We have been expressing our target amount of error e in our point estimate
x¯ as an absolute value (hw = e). In the barbershop example, we selected an
absolute value of e = 2.00 haircuts as our target value. However, it is sometimes
more con- venient to work in terms of a relative error (re) value (hw = re|µ|).
This allows us to talk about the percentage error in our point estimate in place
of the absolute error. Percentage error is the relative error multiplied by 100
(that is, 100re per- cent). To approximate the number of replications needed to
obtain a point estimate x¯ with a certain percentage error, we need only change
the denominator of the n t equation used earlier. The relative error version of the
equation becomes I l
(z )s 2
( α/2 )
nt = re
(1+re)
x¯

where re denotes the relative error. The re/(1 + re) part of the denominator is an
adjustment needed to realize the desired re value because we use x¯ to estimate
µ (see Chapter 9 of Law and Kelton 2000 for details). The appeal of this
approach is that we can select a desired percentage error without prior
knowledge of the magnitude of the value of µ.
 Chapter 9 Simulation Output Analysis 231

As an example, say that after recording the number of haircuts given at

the barbershop on 12 Saturdays (n = 12 replications of the experiment), we
wish to determine the approximate number of replications needed to
estimate the mean number of haircuts given per day with an error percentage
of 17.14 percent and a confidence level of 95 percent. We apply our equation
using the sample mean and sample standard deviation from Table 9.1.
Given: P = confidence level = 0.95
α = significance level = 1 − P = 1 − 0.95 = 0.05
Zα/2 = Z0.025 = 1.96 from Appendix B
re = 0.1714
x¯ = 13.67
s = 4.21 I l
I l2 ( 1 . 96 ) 4 . 21 2
(z0.025 )s
n t = ( re ) = ( 0.1714 ) = 17.02 observations
(1+re) (1+0.1714
)
x¯ 13.67

Thus n t ≈ 18 observations. This is the same result computed earlier on page 229
for an absolute error of e = 2.00 haircuts. This occurred because we purposely
selected re = 0.1714 to produce a value of 2.00 for the equation’s denominator in
order to demonstrate the equivalency of the different methods for approximating
the number of replications needed to achieve a desired level of precision in the
point estimate x¯ . The SimRunner software uses the relative error methodology
to provide estimates for the number of replications needed to satisfy the
specified level of precision for a given significance level α.
In general, the accuracy of the estimates improves as the number of replica-
tions increases. However, after a point, only modest improvements in accuracy
(reductions in the half-width of the confidence interval) are made through con-
ducting additional replications of the experiment. Therefore, it is sometimes nec-
essary to compromise on a desired level of accuracy because of the time
required to run a large number of replications of the model.
The ProModel simulation software automatically computes confidence
inter- vals. Therefore, there is really no need to estimate the sample size
required for a desired half-width using the method given in this section. Instead,
the experiment could be replicated, say, 10 times, and the half-width of the
resulting confidence interval checked. If the desired half-width is not achieved,
additional replications of the experiment are made until it is. The only real
advantage of estimating the number of replications in advance is that it may
save time over the trial-and-error approach of repeatedly checking the half-
width and running additional replica- tions until the desired confidence interval
is achieved.

9.2.4 Real-World Experiments versus

Simulation Experiments
You may have noticed that we have been working with the observations as
though they came from the real barbershop and not from a simulation model of
the shop.
232 Part I Study Chapters

Actually, the observations were generated from a simulation of the shop by

making independent runs (replications) of the model using the method described
in Section 9.2.1. Note, however, that had the observations been collected from
the real barbershop, we would have processed them in the same manner.
Experimen- tal results are generally handled in the same manner, regardless of
their origin, if the observations are unbiased, independent, and normally
distributed.
Note that very different results could be obtained from the real barbershop if
the simulation model does not accurately mimic the behavior of the real shop.
Sta- tistical statements, no matter how precise, derived from the output of a
simulation model provide estimates for the true but unknown population
parameters of the model and not of the real system. Whether or not the model
behavior actually cor- responds to real-world behavior is a matter of model
validity, which was dis- cussed in Chapter 8.

9.3 Statistical Issues with Simulation Output

A single simulation run (replication) represents only a single sample of
possible outcomes (values of a random variable) from the simulation. Averaging
the obser- vations from a large number of runs comes closer to the true expected
performance of the model, but it is still only a statistical estimate. Constructing a
confidence in- terval is a good idea because it provides a measure of how far off
the estimate is from the model’s true expected performance. However, the
following three statisti- cal assumptions must be met regarding the sample of
observations used to construct the confidence interval:
• Observations are independent so that no correlation exists
between consecutive observations.
• Observations are identically distributed throughout the entire duration
of the process (that is, they are time invariant).
• Observations are normally distributed.
Table 9.3 presents a framework for thinking about the output produced from
a series of simulation runs (independent replications) that will aid in the discus-
sion of these three important statistical assumptions. Suppose a system has been

TABLE 9.3 Simulation Output from a Series of Replications

Replication (i) Within Run Observations y ij Average xi

1 y11, y12, y13, y 14 ,..., y1m x1

2 y21, y22, y23, y 24 ,..., y2m x2
3 y31, y32, y33, y 34 ,..., y3m x3
4 y41, y42, y43, y 44 ,..., y4m x4
. . .
. . .
.n yn1, yn2, yn3,. y n 4 ,. .. , ynm x.n
Chapter 9 Simulation Output Analysis 233

simulated to estimate the mean time that entities wait in queues in that system.
The experiment is replicated several times to collect n independent sample
obser- vations, as was done in the barbershop example. As an entity exits the
system, the time that the entity spent waiting in queues is recorded. The
waiting time is de- noted by yij in Table 9.3, where the subscript i denotes the
replication from which the observation came and the subscript j denotes the
value of the counter used to count entities as they exit the system. For example,
y32 is the waiting time for the second entity that was processed through the
system in the third replication. These values are recorded during a particular
run (replication) of the model and are listed under the column labeled “Within
Run Observations” in Table 9.3.
Note that the within run observations for a particular replication, say the ith
replication, are not usually independent because of the correlation between
consecutive observations. For example, when the simulation starts and the first
entity begins processing, there is no waiting time in the queue. Obviously, the
more congested the system becomes at various times throughout the simulation,
the longer entities will wait in queues. If the waiting time observed for one entity
is long, it is highly likely that the waiting time for the next entity observed is
going to be long and vice versa. Observations exhibiting this correlation
between consecutive observations are said to be autocorrelated. Furthermore,
the within run observations for a particular replication are often nonstationary
in that they do not follow an identical distribution throughout the simulation
run. Therefore, they cannot be directly used as observations for statistical
methods that require in- dependent and identically distributed observations
such as those used in this chapter.
At this point, it seems that we are a long way from getting a usable set of
observations. However, let’s focus our attention on the last column in Table 9.3,
labeled “Average,” which contains the x1 through xn values. xi denotes the
average waiting time of the entities processed during the ith simulation run
(replication) and is computed as follows:
yij
xi = m j =1
m
where m is the number of entities processed through the system and yij is the
time that the jth entity processed through the system waited in queues during
the ith replication. Although not as formally stated, you used this equation in
the last row of the ATM spreadsheet simulation of Chapter 3 to compute the
average waiting time of the m = 25 customers (Table 3.2). An xi value for a
particular replication represents only one possible value for the mean time
an entity waits in queues, and it would be risky to make a statement about
the true waiting time from a single observation. However, Table 9.3 contains
an xi value for each of the n independent replications of the simulation.
These xi values are statistically independent if different seed values are used
to initialize the random number gen- erator for each replication (as discussed
in Section 9.2.1). The xi values are often identically distributed as well.
Therefore, the sample of xi values can be used for statistical methods requiring
independent and identically distributed observations. Thus we can use the xi
values to estimate the true but unknown average time
234 Part I Study Chapters

entities wait in queues by computing the sample mean as follows:

n i
i =1x
x¯ = n
You used this equation in Table 3.3 to average the results from the two replica-
tions of the ATM spreadsheet simulation of Chapter 3.
The standard deviation of the average time entities wait in queues is esti-
mated by the sample standard deviation and is computed by

[xi − x¯ ]2
in =1
s=
n−1
The third assumption for many standard statistical methods is that the
sample observations (x1 through xn) are normally distributed. For example, the
normality assumption is implied at the point for which a tn−1,α/2 value from the
Student’s t distribution is used in computing a confidence interval’s half-width.
The central limit theorem of statistics provides a basis for making this
assumption. If a vari- able is defined as the sum of several independent and
identically distributed random values, the central limit theorem states that the
variable representing the sum tends to be normally distributed. This is helpful
because in computing xi for a particular replication, the (y ij ) waiting times for
the m entities processed in the ith replication are summed together. However,
the yij observations are autocor- related and, therefore, not independent. But
there are also central limit theorems for certain types of correlated data that
suggest that xi will be approximately nor- mally distributed if the sample size
used to compute it (the number of entities processed through the system, m
from Table 9.3) is not too small (Law and Kelton 2000). Therefore, we can
compute a confidence interval using
(tn−1,α/2 )s
x¯ ± √
n
where tn−1,α/2 is a value from the Student’s t table in Appendix B for an α level of
significance.
ProModel automatically computes point estimates and confidence intervals
using this method. Figure 9.2 presents the output produced from running the
ProModel version of the ATM simulation of Lab Chapter 3 for five replications.
The column under the Locations section of the output report labeled “Average
Minutes per Entry” displays the average amount of time that customers waited
in the queue during each of the five replications. These values correspond to the
xi values in Table 9.3. Note that in addition to the sample mean and standard
devia- tion, ProModel also provides a 95 percent confidence interval.
Sometimes the output measure being evaluated is not based on the mean, or
sum, of a collection of random values. For example, the output measure may
be the maximum number of entities that simultaneously wait in a queue. (See
the “Maximum Contents” column in Figure 9.2.) In such cases, the output
measure may not be normally distributed, and because it is not a sum, the
central limit
 Chapter 9 Simulation Output Analysis 235

FIGURE 9.2
Replication technique used on ATM simulation of Lab Chapter 3.
-------------------------------------------------------------------
General Report
Output from C:\Bowden\2nd Edition\ATM System Ch9.MOD [ATM System]
Date: Nov/26/2002 Time: 04:24:27 PM
-------------------------------------------------------------------
Scenario : Normal Run
Replication : All
Period : Final Report (1000 hr to 1500 hr Elapsed: 500 hr)
Warmup Time : 1000
Simulation Time : 1500 hr
-------------------------------------------------------------------

LOCATIONS
Average
Location Scheduled Total Minutes Average Maximum Current
Name Hours Capacity Entries Per Entry Contents Contents Contents % Util
--------- ----- -------- ------- --------- -------- -------- -------- ------
ATM Queue 500 999999 9903 9.457 3.122 26 18 0.0 (Rep 1)
ATM Queue 500 999999 9866 8.912 2.930 24 0 0.0 (Rep 2)
ATM Queue 500 999999 9977 11.195 3.723 39 4 0.0 (Rep 3)
ATM Queue 500 999999 10006 8.697 2.900 26 3 0.0 (Rep 4)
ATM Queue 500 999999 10187 10.841 3.681 32 0 0.0 (Rep 5)
ATM Queue 500 999999 9987.8 9.820 3.271 29.4 5 0.0 (Average)
ATM Queue 0 0 124.654 1.134 0.402 6.148 7.483 0.0 (Std. Dev.)
ATM Queue 500 999999 9833.05 8.412 2.772 21.767 -4.290 0.0 (95% C.I. Low)
ATM Queue 500 999999 10142.6 11.229 3.771 37.032 14.290 0.0 (95% C.I. High)

theorem cannot be used to imply that it is normally distributed. Some refuge

may be taken in knowing that the method given in the chapter for constructing a
confidence interval does not completely break down when the normality as-
sumption is violated. So if the normality assumption is questionable, use the
confidence interval with the knowledge that it is only approximate. However,
you must not violate the independence assumption. This is not an obstacle
because it is easy to get a set of observations that are statistically independent by
replicating the simulation.

9.4 Terminating and Nonterminating Simulations

Determining experimental procedures, such as how many replications and how
to gather statistics, depends on whether we should conduct a terminating or
nonter- minating simulation. A terminating simulation is conducted when we
are inter- ested in the behavior of the system over a particular period—for
example, the movement of cars on a roadway system during rush hour. A
nonterminating sim- ulation is conducted when we are interested in the
steady-state behavior of a system—for example, the long-term average
behavior of a production system that steadily produces spark plugs for
automobile engines. The purpose of this section is to give guidelines for
deciding which is most appropriate for a given analysis, terminating simulations
or nonterminating simulations.
236 Part I Study Chapters

9.4.1 Terminating Simulations

A terminating simulation is one in which the simulation starts at a defined state
or time and ends when it reaches some other defined state or time. An initial
state might be the number of parts in the system at the beginning of a workday.
A termi- nating state or event might occur when a particular number of parts
have been com- pleted. Consider, for example, an aerospace manufacturer that
receives an order to manufacture 200 airplanes of a particular model. The
company might be interested in knowing how long it will take to produce the
200 airplanes. The simulation run starts with the system empty and is terminated
when the 200th plane is completed. A point in time that would bring a
terminating simulation to an end might be the closing of shop at the end of a
business day or the completion of a weekly or monthly production period. It
may be known, for example, that a production sched- ule for a particular item
changes weekly. At the end of each 40-hour cycle, the sys- tem is “emptied” and
a new production cycle begins. In this situation, a terminating simulation would
be run in which the simulation run length would be 40 hours.
A common type of terminating system is one that starts empty, runs for a
while, and then empties out again before shutting down. Examples of this type
of system are job shops, department stores, restaurants, banks, hair salons, and
post offices. All these systems open up for business in the morning with no
customers in the system and with all resources initially idle. At the end of the
day the system gradually closes down. Usually, at a predetermined time, the
customer arrival process is terminated. (The front door is locked to prevent new
arrivals.) Service for all existing customers is completed, and then the system
finally shuts down for the day. Most service systems tend to operate in this
fashion and are therefore modeled as terminating systems.
Terminating simulations are not intended to measure the steady-state behav-
ior of a system, although there may be periods during a terminating simulation
during which the system is in a steady state. In a terminating simulation, average
measures of performance based on the entire duration of the simulation are of
lit- tle meaning. Because a terminating simulation always contains transient
periods that are part of the analysis, utilization figures, for example, have the
most mean- ing if reported for successive time intervals during the simulation.

9.4.2 Nonterminating Simulations

A nonterminating or steady-state simulation is one in which the steady-state
(long-term average) behavior of the system is being analyzed. A nonterminating
simulation does not mean that the simulation never ends, nor does it mean that
the system being simulated has no eventual termination. It only means that the
simu- lation could theoretically go on indefinitely with no statistical change in
behavior. For such systems, a suitable length of time to run the model in order to
collect sta- tistics on the steady-state behavior of the system must be determined.
An example of a nonterminating simulation is a model of a manufacturing
operation in which automotive oil filters are produced continually. The operation
 Chapter 9 Simulation Output Analysis 237

runs two shifts with an hour break during each shift in which everything
momen- tarily stops. Break and third-shift times are excluded from the model
because work always continues exactly as it left off before the break or end of
shift. The length of the simulation is determined by how long it takes to get a
representative steady- state reading of the model behavior.
Nonterminating simulations can, and often do, change operating characteris-
tics after a period of time, but usually only after enough time has elapsed to es-
tablish a steady-state condition. Take, for example, a production system that runs
10,000 units per week for 5 weeks and then increases to 15,000 units per week
for the next 10 weeks. The system would have two different steady-state periods.
Oil and gas refineries and distribution centers are additional examples of
nontermi- nating systems.
Contrary to what one might think, a steady-state condition is not one in
which the observations are all the same, or even one for which the variation in
obser- vations is any less than during a transient condition. It means only that all
obser- vations throughout the steady-state period will have approximately
the same distribution. Once in a steady state, if the operating rules change or
the rate at which entities arrive changes, the system reverts again to a transient
state until the system has had time to start reflecting the long-term behavior of
the new operat- ing circumstances. Nonterminating systems begin with a warm-
up (or transient) state and gradually move to a steady state. Once the initial
transient phase has diminished to the point where the impact of the initial
condition on the system’s response is negligible, we consider it to have reached
steady state.

9.5 Experimenting with Terminating Simulations

Experiments involving terminating simulations are usually conducted by making
several simulation runs or replications of the period of interest using a different
seed value for each run. This procedure enables statistically independent and un-
biased observations to be made on the response variables of interest in the
system (such as the number of customers in the system or the utilization of
resources) over the period simulated. Statistics are also often gathered on
performance mea- sures for successive intervals during the period.
For terminating simulations, we are usually interested in final production
counts and changing patterns of behavior over time (store opening until closing,
for example) rather than the overall, or long-term, average behavior. It would be
absurd, for example, to conclude that because two waitresses are busy an
average of only 40 percent during the day that only one waitress is needed. This
average measure reveals little about the utilization of the waitresses during peak
periods. A more detailed report of how long customers wait for a waitress to
serve them during successive intervals during the workday may reveal that
three waitresses are needed to handle peak periods whereas only one waitress is
necessary during off-peak hours. Therefore, statistics are also often gathered on
performance mea- sures for successive intervals during the period.
238 Part I Study Chapters

For terminating simulations, there are three important questions to answer in

running the experiment:
1. What should be the initial state of the model?
2. What is the terminating event or time?
3. How many replications should be made?

9.5.1 Selecting the Initial Model State

The initial state of the model represents how the system looks (or is initialized)
at the beginning of the simulation. The barbershop example presented in
Section 9.2.2 is a terminating system. The barbershop opens at 8:00 A.M. and
closes around 12:00 noon. The initial state of the shop at 8:00 A.M. is that there
are no customers in the shop and all barbers are idle and reading the
newspaper. Therefore, the initial state of the model at the beginning of the
simulation is that no customers (entities) are in the barbershop (system) and all
barbers (resources) are idle. The system is empty and idle until entities begin to
arrive in the system as described by the logic in the model.
All terminating simulations do not necessarily begin with the system being
empty and idle. For example, to measure the time that it takes for everyone to
exit an arena after a sporting event, the simulation would be initialized with
fans in their seats just before the sporting event ends. Therefore, the initial
state of the model would reflect a large number of entities (fans) in the system.

9.5.2 Selecting a Terminating Event

A terminating event is an event that occurs during the simulation that causes the
simulation run to end. This terminating event might occur when a certain time of
day is reached (closing time of an airport’s newspaper stand) or when certain
conditions are met (the last passenger boards an aircraft). If the termination
event is based on the satisfaction of conditions other than time, then the time
that the simulation will end is not known in advance. Using the barbershop as
an exam- ple, the simulation terminates sometime after 12:00 noon when the
haircut for the last customer allowed in the shop is completed. Therefore, the
termination condi- tion would be when the simulation clock time is greater
than or equal to 12:00 noon and when the last entity (customer) exits the
system (barbershop).

9.5.3 Determining the Number of Replications

Given the initial or starting state of the simulation model and the terminating
condition(s) for the simulation run, the analyst is ready to begin conducting
experiments with the model. Experiments involving terminating simulations are
usually conducted by making several simulation runs or replications of the
period of interest using a different stream of random numbers for each run. This
procedure enables statistically independent and unbiased observations to be
made on response variables of interest in the system (the number of customers in
 Chapter 9 Simulation Output Analysis 239

the system, the utilization of resources) over the period simulated, as discussed
in Section 9.3.
The answer to the question of how many replications are necessary is
usually based on the analyst’s desired half-width of a confidence interval. As a
general guideline, begin by making 10 independent replications of the
simulation and add more replications until the desired confidence interval half-
width is reached. For the barbershop example, 18 independent replications of
the simulation were re- quired to achieve the desired confidence interval for the
expected number of hair- cuts given on Saturday mornings.

9.6 Experimenting with Nonterminating Simulations

The issues associated with generating meaningful output for terminating simula-
tions are somewhat different from those associated with nonterminating systems.
However, the same statistical methods are used to analyze the output from both
types of simulations, provided that the output observations are unbiased,
inde- pendent, and normally distributed.
Nonterminating simulations are conducted when we are interested in the
steady-state behavior of the simulation model. As such, the following topics
must be addressed:
1. Determining and eliminating the initial warm-up bias.
2. Obtaining sample observations.
3. Determining run length.

9.6.1 Determining the Warm-up Period

In a steady-state simulation, we are interested in the steady-state behavior of the
model. If a model starts out empty of entities, it usually takes some time before
it reaches steady state. In a steady-state condition, the response variables in the
sys- tem (like mean waiting time or throughput rate) exhibit statistical regularity
(the distribution of a response variable is approximately the same from one time
period to the next). Figure 9.3 illustrates the typical behavior of an output
response mea- sure as the simulation progresses through time. Note that the
distribution of the output response changes very little once steady state is
reached.
The time that it takes to reach steady state is a function of the activity times
and the amount of activity taking place. For some models, steady state might be
reached in a few hours of simulation time. For other models, it may take several
hundred hours to reach steady state. In modeling steady-state behavior, we have
the problem of determining when a model reaches steady state. This start-up pe-
riod is usually referred to as the warm-up period (transient period). We want to
wait until after the warm-up period before we start gathering any statistics. This
way we eliminate any bias due to observations taken during the transient state of
the model. For example, in Figure 9.3 any observations recorded before the
warm- up ends would be biased to the low side. Therefore, we delete these
observations
240 Part I Study Chapters

FIGURE 9.3
Behavior of model’s output response as it reaches steady state.

Warm-up ends
Transient state Steady state

Averaged
output
response
measure
(y )

Distribution of output response

1 2 3 4 5 6
Simulation time

from the beginning of the run and use the remaining observations to estimate the
true mean response of the model.
While several methods have been developed for estimating the warm-up
time, the easiest and most straightforward approach is to run a preliminary simu-
lation of the system, preferably with several (5 to 10) replications, average the
output values at each time step across replications, and observe at what time the
system reaches statistical stability. This usually occurs when the averaged output
response begins to flatten out or a repeating pattern emerges. Plotting each data
point (averaged output response) and connecting them with a line usually helps
to identify when the averaged output response begins to flatten out or begins a
re- peating pattern. Sometimes, however, the variation of the output response
is so large that it makes the plot erratic, and it becomes difficult to visually
identify the end of the warm-up period. Such a case is illustrated in Figure 9.4.
The raw data plot in Figure 9.4 was produced by recording a model’s output
response for a queue’s average contents during 50-hour time periods (time
slices) and averaging the output values from each time period across five
replications. In this case, the model was initialized with several entities in the
queue. Therefore, we need to eliminate this apparent upward bias before
recording observations of the queue’s average contents. Table 9.4 shows this
model’s output response for the 20 time periods (50 hours each) for each of the
five replications. The raw data plot in Fig- ure 9.4 was constructed using the 20
values under the y¯i column in Table 9.4.
When the model’s output response is erratic, as in Figure 9.4, it is useful
to “smooth” it with a moving average. A moving average is constructed by
calculating the arithmetic average of the w most recent data points (averaged
output responses) in the data set. You have to select the value of w, which is
called the moving-average window. As you increase the value of w, you
increase the “smoothness” of the moving average plot. An indicator for the end
of the warm-up
 Chapter 9 Simulation Output Analysis 241

FIGURE 9.4
SimRunner uses the Welch moving-average method to help identify the end of the warm-up period
that occurs around the third or fourth period (150 to 200 hours) for this model.

time is when the moving average plot appears to flatten out. Thus the routine is
to begin with a small value of w and increase it until the resulting moving
average plot begins to flatten out.
The moving-average plot in Figure 9.4 with a window of six (w = 6)
helps to identify the end of the warm-up period—when the moving average
plot appears to flatten out at around the third or fourth period (150 to 200
hours). Therefore, we ignore the observations up to the 200th hour and
record only those after the 200th hour when we run the simulation. The
moving-average plot in Figure 9.4 was constructed using the 14 values under
the yi (6) column in Table 9.4 that were computed using
 w
 s=−w y¯i +s
 2w + 1 if i = w 1, . . . , m − w
+
y¯i (w) =
 s=−(i
i 1
− −1) y¯ if 1,... ,w
 i i
+s
=
2i − 1
where m denotes the total number of periods and w denotes the window of the
moving average (m = 20 and w = 6 in this example).
242 Part I Study Chapters

TABLE 9.4 Welch Moving Average Based on Five Replications and 20 Periods

Total Average Welch

Contents Contents Moving
Observed Mean Queue Contents for Period, per Average,
(Replications) Period,
Totali
yi
¯ =
Period (i) Time 1 2 3 4 5 Totali 5 y¯i (6)

1 50 4.41 4.06 6.37 11.72 1.71 28.27 5.65 5.65

2 100 3.15 2.95 2.94 3.52 2.86 15.42 3.08 3.95
3 150 2.58 2.50 3.07 3.14 4.32 15.61 3.12 3.73
4 200 2.92 3.07 4.48 4.79 3.47 18.73 3.75 3.84
5 250 3.13 3.28 2.34 3.32 3.19 15.26 3.05 3.94
6 300 2.51 3.07 5.45 5.15 5.34 21.52 4.30 3.82
7 350 5.09 3.77 4.44 3.58 2.63 19.51 3.90 3.86
8 400 3.15 2.89 3.63 4.43 4.15 18.25 3.65 3.83
9 450 2.79 3.40 9.78 4.13 4.48 24.58 4.92 3.84
10 500 4.07 3.62 4.50 2.38 3.42 17.99 3.60 3.93
11 550 3.42 3.74 2.46 3.08 2.49 15.19 3.04 3.89
12 600 3.90 1.47 5.75 5.34 4.19 20.65 4.13 3.99
13 650 3.63 3.77 2.14 4.24 6.36 20.14 4.03 3.99
14 700 9.12 4.25 3.83 3.19 5.91 26.30 5.26 3.96
15 750 3.88 3.54 3.08 2.94 2.51 15.95 3.19
16 800 3.16 6.91 2.70 5.64 2.57 20.98 4.20
17 850 5.34 3.17 2.47 2.73 2.68 16.39 3.28
18 900 2.84 3.54 2.33 10.14 3.20 22.05 4.41
19 950 2.65 4.64 5.18 4.97 3.93 21.37 4.27
20 1000 3.27 4.68 3.39 2.95 3.46 17.75 3.55

This is a somewhat busy-looking equation that turns out not to be so bad

when you put some numbers into it, which we will now do to compute the Welch
moving average, y¯i (6), column in Table 9.4. We use the bottom part of the
equa- tion to compute the moving averages up to the wth moving average. Our
w = 6, so we will compute y¯1 (6), y¯2 (6), y¯3 (6), y¯4 (6), y¯5 (6), and
y¯6 (6) using the bottom part of the y¯i (w) equation as follows:
y¯1
y (6) 5.65
¯1 = 1 = = 5.65
1
y¯1 +y¯2 5.65 + 3.08 + = 3.95
y¯2(6) = 3.12
+ y¯ 3
3 =
3

y¯1 +y¯2 +y¯3 +y¯4 5.65 + 3.08 + 3.12 + 3.75 + = 3.73

y¯3(6) = 3.05
+y¯5
5 =
5
·
·
·
y¯1 +y¯2 +y¯3 +y¯4 +y¯5 +y¯6 +y¯7 +y¯8 +y¯9 +y¯10 +y¯11
y¯6 (6) = = 3.82
11
 Chapter 9 Simulation Output Analysis 243

Notice the pattern that as i increases, we average more data points together,
with the ith data point appearing in the middle of the sum in the numerator (an
equal number of data points are on each side of the center data point). This con-
tinues until we reach the (w + 1)th moving average, when we switch to the
top part of the y¯i (w) equation. For our example, the switch occurs at the 7th
moving average because w = 6. From this point forward, we average the 2w +
1 closest data points. For our example, we average the 2(6) + 1 = 13 closest
data points (the ith data point plus the w = 6 closest data points above it and the
w = 6 clos- est data point below it in Table 9.4 as follows:

y¯1 +y¯2 +y¯3 +y¯4 +y¯5 +y¯6 +y¯7 +y¯8 +y¯9 +y¯10 +y¯11 +y¯12 +y¯13
y¯7(6) = 13
y¯7 (6) = 3.86

y¯2 +y¯3 +y¯4 +y¯5 +y¯6 +y¯7 +y¯8 +y¯9 +y¯10 +y¯11 +y¯12 +y¯13 +y¯14
y¯8(6) = 13
y¯8 (6) = 3.83

y¯3 +y¯4 +y¯5 +y¯6 +y¯7 +y¯8 +y¯9 +y¯10 +y¯11 +y¯12 +y¯13 +y¯14 +y¯15
y¯9(6) = 13
y¯9 (6) = 3.84
·
·
·
y¯8 +y¯9 +y¯10 +y¯11 +y¯12 +y¯13 +y¯14 +y¯15 +y¯16 +y¯17 +y¯18 +y¯19 +y¯20
y¯14 =
(6) 13
y¯14 (6) = 3.96

Eventually we run out of data and have to stop. The stopping point occurs
when i = m − w. In our case with m = 20 periods and w = 6, we stopped
when i = 20 − 6 = 14.
The development of this graphical method for estimating the end of the
warm-up time is attributed to Welch (Law and Kelton 2000). This method is
sometimes referred to as the Welch moving-average method and is implemented
in SimRunner. Note that when applying the method that the length of each repli-
cation should be relatively long and the replications should allow even rarely
occurring events such as infrequent downtimes to occur many times. Law and
Kelton (2000) recommend that w not exceed a value greater than about m/4.
To determine a satisfactory warm-up time using Welch’s method, one or more
key output response variables, such as the average number of entities in a queue
or the average utilization of a resource, should be monitored for successive
periods. Once these variables begin to exhibit steady state, a good practice to
follow would be to extend the warm-up period by 20 to 30 percent. This
approach is simple, conservative, and usually satisfactory. The danger is in
underestimating the warm-up period, not overestimating it.
244 Part I Study Chapters

9.6.2 Obtaining Sample Observations

It seems that for nonterminating simulations, you could simply run the
simulation long enough for statistical output to stabilize and then analyze the
results. In other words, you might use the results from a single long run after
removing the bias created by the warm-up period. For computing confidence
intervals, however, independent sample observations must be created. In a
terminating simulation, simply running multiple replications creates
independent sample observations. For steady-state simulations, we have
several options for obtaining independent sample observations. Two approaches
that are widely used are running multiple replications and interval batching.

Independent Observations via Replications

Running multiple replications for nonterminating simulations is similar to the
way it is done for terminating simulations. The only differences are that (1) the
initial warm-up bias must be determined and eliminated and (2) an
appropriate run length must be determined. The warm-up issue was addressed
in Section 9.6.1, and the run length issue is addressed in Section 9.6.3. Once
the replications are made, confidence intervals can be computed as described
earlier in Section 9.3. This was done for the ATM simulation of Lab Chapter 3
to produce Figure 9.2. Note the warm-up time of 1,000 hours and total
simulation time of 1,500 hours at the top of the ProModel output report. For this
simulation, statistics were collected from time 1,000 hours to 1,500 hours.
One advantage of running independent replications is that it ensures that
samples are independent. On the negative side, running through the warm-up
phase for each replication extends the length of time to perform the replications.
Furthermore, there is a possibility that the length of the warm-up period is
under- estimated, causing biased results from each replication. However,
because the replication method ensures that samples are independent, we
strongly encourage its use when the warm-up period is properly detected and
removed.

Independent Observations via Batch Means

Interval batching (also referred to as the batch means technique) is a method in
which a single, long run is made and statistics are collected during separate peri-
ods. Although 5 to 10 replications are typically used to determine the warm-up
pe- riod in preliminary experiments (see Section 9.6.1), the simulation is run
only once to collect observations for statistical analysis purposes. Placing the
output values from the simulation run into groups or batches forms the set of
observa- tions. For example, Figure 9.5 illustrates the output response from a
simulation during a single run. Beyond the warm-up period, the run is divided
into nonover- lapping intervals. Note that the intervals are of an equal amount
of time (as in Figure 9.5) or an equal number of observations (every 1,000
entities observed). Next, the output responses that were generated during a
common time interval are “batched” together. If the output measure of interest
is a time-weighted statistic (such as the average number of entities in the
system), then the batch interval
 Chapter 9 Simulation Output Analysis 245

FIGURE 9.5
Individual statistics Warm-up ends
on the output measure
are computed for each
batch interval. Output
response
measure
(y )

Batch

Batch Batch Batch Batch

interval 1 interval 2 interval 3 interval 4 interval 5
Simulation time

TABLE 9.5 A Single Replication Divided into Batch Intervals

Batch Interval (i) Within Batch Interval Observations yij Average xi

1 y11, y12, y13, y 1 4 ,... , y1m x1

2 y21, y22, y23, y 2 4 ,... , y2m x2
3 y31, y32, y33, y 3 4 ,... , y3m x3
4 y41, y42, y43, y 4 4 ,... , y4m x4
5 y51, y52, y53, y 5 4 ,... , y5m x5
. . .
. . .
.n yn1, yn2, yn3,. y n 4 , .. . , ynm x.n

should be based on time. If the output measure is based on observations (like the
waiting time of entities in a queue), then the batch interval is typically based on
the number of observations.
Table 9.5 details how a single, long simulation run (one replication), like the
one shown in Figure 9.5, is partitioned into batch intervals for the purpose of ob-
taining (approximately) independent and identically distributed observations of a
simulation model’s output response. Note the similarity between Table 9.3 of
Section 9.3 and Table 9.5. As in Table 9.3, the observations represent the time an
entity waited in queues during the simulation. The waiting time for an entity is
denoted by yij , where the subscript i denotes the interval of time (batch
interval) from which the observation came and the subscript j denotes the
value of the counter used to count entities as they exit the system during a
particular batch in- terval. For example, y23 is the waiting time for the third
entity that was processed through the system during the second batch interval of
time.
Because these observations are all from a single run (replication), they are
not statistically independent. For example, the waiting time of the mth entity
exit- ing the system during the first batch interval, denoted y1m , is correlated
with the
246 Part I Study Chapters

waiting time of the first entity to exit the system during the second batch
interval, denoted y21. This is because if the waiting time observed for one entity
is long, it is likely that the waiting time for the next entity observed is going to
be long, and vice versa. Therefore, adjacent observations in Table 9.5 will
usually be auto- correlated. However, the value of y14 can be somewhat
uncorrelated with the value of y24 if they are spaced far enough apart such that
the conditions that re- sulted in the waiting time value of y14 occurred so long
ago that they have little or no influence on the waiting time value of y24.
Therefore, most of the observations within the interior of one batch interval can
become relatively uncorrelated with most of the observations in the interior of
other batch intervals, provided they are spaced sufficiently far apart. Thus the
goal is to extend the batch interval length until there is very little correlation
(you cannot totally eliminate it) between the observations appearing in different
batch intervals. When this occurs, it is reason- able to assume that observations
within one batch interval are independent of the observations within other batch
intervals.
With the independence assumption in hand, the observations within a batch
interval can be treated in the same manner as we treated observations within a
replication in Table 9.3. Therefore, the values in the Average column in Table
9.5, which represent the average amount of time the entities processed
during the ith batch interval waited in queues, are computed as follows:
j =1 y ij
m
xi =
m
where m is the number of entities processed through the system during the batch
in- terval of time and y ij is the time that the jth entity processed through the
system waited in queues during the ith batch interval. The xi values in the
Average column are approximately independent and identically distributed and
can be used to com- pute a sample mean for estimating the true average time an
entity waits in queues:
n i
i =1x
x¯ = n
The sample standard deviation is also computed as before:

in =1
s= [xi − x¯ ]2
n−1
And, if we assume that the observations (x1 through xn) are normally distributed
(or at least approximately normally distributed), a confidence interval is
computed by
(tn−1,α/2 )s
x¯ ± √
n
where tn−1,α/2 is a value from the Student’s t table in Appendix B for an α level of
significance.
ProModel automatically computes point estimates and confidence intervals
using the above method. Figure 9.6 is a ProModel output report from a single,
 Chapter 9 Simulation Output Analysis 247

FIGURE 9.6
Batch means technique used on ATM simulation in Lab Chapter 3. Warm-up period is from 0 to 1,000 hours. Each
batch interval is 500 hours in length.
-----------------------------------------------------------------
General Report
Output from C:\Bowden\2nd Edition\ATM System Ch9.MOD [ATM
System] Date: Nov/26/2002 Time: 04:44:24 PM
-----------------------------------------------------------------
Scenario : Normal Run
Replication : 1 of 1
Period : All
Warmup Time : 1000
hr Simulation Time :
3500 hr
-----------------------------------------------------------------

LOCATIONS
Average
Location Scheduled Total Minutes Average Maximum Current
Name Hours Capacity Entries Per Entry Contents Contents Contents % Util
--------- --------- -------- ------- --------- -------- -------- -------- ------
ATM Queue 500 999999 9903 9.457 3.122 26 18 0.0 (Batch 1)
ATM Queue 500 999999 10065 9.789 3.284 24 0 0.0 (Batch 2)
ATM Queue 500 999999 9815 8.630 2.823 23 16 0.0 (Batch 3)
ATM Queue 500 999999 9868 8.894 2.925 24 1 0.0 (Batch 4)
ATM Queue 500 999999 10090 12.615 4.242 34 0 0.0 (Batch 5)
ATM Queue 500 999999 9948.2 9.877 3.279 26.2 7 0.0 (Average)
ATM Queue 0 0 122.441 1.596 0.567 4.494 9.165 0.0 (Std. Dev.)
ATM Queue 500 999999 9796.19 7.895 2.575 20.620 -4.378 0.0 (95% C.I. Low)
ATM Queue 500 999999 10100.2 11.860 3.983 31.779 18.378 0.0 (95% C.I. High)

long run of the ATM simulation in Lab Chapter 3 with the output divided into
five batch intervals of 500 hours each after a warm-up time of 1,000 hours. The
col- umn under the Locations section of the output report labeled “Average
Minutes Per Entry” displays the average amount of time that customer entities
waited in the queue during each of the five batch intervals. These values
correspond to the xi values of Table 9.5. Note that the 95 percent confidence
interval automatically computed by ProModel in Figure 9.6 is comparable,
though not identical, to the 95 percent confidence interval in Figure 9.2 for the
same output statistic.
Establishing the batch interval length such that the observations x1,
x 2 , . . . , xn of Table 9.5 (assembled after the simulation reaches steady
state) are approxi- mately independent is difficult and time-consuming. There is
no foolproof method for doing this. However, if you can generate a large
number of observations, say n ≥ 100, you can gain some insight about the
independence of the observations by estimating the autocorrelation between
adjacent observations (lag-1 autocorre- lation). See Chapter 6 for an
introduction to tests for independence and autocor- relation plots. The
observations are treated as being independent if their lag-1 autocorrelation is
zero. Unfortunately, current methods available for estimating the lag-1
autocorrelation are not very accurate. Thus we may be persuaded that our ob-
servations are almost independent if the estimated lag-1 autocorrelation
computed from a large number of observations falls between −0.20 to +0.20.
The word almost is emphasized because there is really no such thing as almost
independent
248 Part I Study Chapters

(the observations are independent or they are not). What we are indicating here
is that we are leaning toward calling the observations independent when the
estimate of the lag-1 autocorrelation is between −0.20 and +0.20. Recall that
autocorrela- tion values fall between ±1. Before we elaborate on this idea for
determining if an acceptable batch interval length has been used to derive the
observations, let’s talk about positive autocorrelation versus negative
autocorrelation.
Positive autocorrelation is a bigger enemy to us than negative
autocorrelation because our sample standard deviation s will be biased low if
the observations from which it is computed are positively correlated. This would
result in a falsely narrow confidence interval (smaller half-width), leading us to
believe that we have a better estimate of the mean µ than we actually have.
Negatively correlated ob- servations have the opposite effect, producing a
falsely wide confidence interval (larger half-width), leading us to believe that
we have a worse estimate of the mean
µ than we actually have. A negative autocorrelation may lead us to waste time
col- lecting additional observations to get a more precise (narrow) confidence
interval but will not result in a hasty decision. Therefore, an emphasis is placed
on guard- ing against positive autocorrelation. We present the following
procedure adapted from Banks et al. (2001) for estimating an acceptable batch
interval length.
For the observations x1, x2 , . . . , xn derived from n batches of data
assembled after the simulation has researched steady state as outlined in
Table 9.5, compute an estimate of the lag-1 autocorrelation ρˆ1 using
n−1
ρˆ1 = (xi − x¯) +1 − x¯ )
(xii
=1
s2(n − 1)

where s 2 is the sample variance (sample standard deviation squared) and x¯ is

the sample mean of the n observations. Recall the recommendation that n
should be at least 100 observations. If the estimated lag-1 autocorrelation is
not between
−0.20 and +0.20, then extend the original batch interval length by 50 to 100 per-
cent, rerun the simulation to collect a new set of n observations, and check the
lag-1 autocorrelation between the new x1 to xn observations. This would be re-
peated until the estimated lag-1 autocorrelation falls between −0.20 and +0.20
(or you give up trying to get within the range). Note that falling below −0.20 is
less worrisome than exceeding +0.20.
Achieving −0.20 ≤ ρˆ1 ≤ 0.20: Upon achieving an estimated lag-1
autocorrelation within the desired range, “rebatch” the data by combining
adjacent batch intervals of data into a larger batch. This produces a smaller
number of observations that are based on a larger batch interval length. The
lag-1 autocorrelation for this new set of observations will likely be closer to
zero than the lag-1 autocorrelation of the previous set of observations
because the new set of observations is based on a larger batch interval
length. Note that at this point, you are not rerunning the simulation with the
new, longer batch interval but are “rebatching” the output data from the last
run. For example, if a batch interval length of 125 hours produced 100
observations (x1 to x100 ) with an estimated lag-1 autocorrelation ρˆ1 =
0.15,
Chapter 9 Simulation Output Analysis 249

you might combine four contiguous batches of data into one batch with a
length of 500 hours (125 hours × 4 = 500 hours). “Rebatching” the data
with the 500-hour batch interval length would leave you 25 observations
(x1 to x25) from which to construct the confidence interval. We
recommend that you “rebatch” the data into 10 to 30 batch intervals.
Not Achieving −0.20 ≤ ρˆ1 ≤ 0.20: If obtaining an estimated lag-1
autocorrelation within the desired range becomes impossible because you
cannot continue extending the length of the simulation run, then rebatch the
data from your last run into no more than about 10 batch intervals and
construct the confidence interval. Interpret the confidence interval with the
apprehension that the observations may be significantly correlated.
Lab Chapter 9 provides an opportunity for you to gain experience applying
these criteria to a ProModel simulation experiment. However, remember that
there is no universally accepted method for determining an appropriate batch in-
terval length. See Banks et al. (2001) for additional details and variations on this
approach, such as a concluding hypothesis test for independence on the final set
of observations. The danger is in setting the batch interval length too short, not
too long. This is the reason for extending the length of the batch interval in the
last step. A starting point for setting the initial batch interval length from
which to begin the process of evaluating the lag-1 autocorrelation estimates is
provided in Section 9.6.3.
In summary, the statistical methods in this chapter are applied to the data
compiled from batch intervals in the same manner they were applied to the data
compiled from replications. And, as before, the accuracy of point and interval
es- timates generally improves as the sample size (number of batch intervals)
in- creases. In this case we increase the number of batch intervals by extending
the length of the simulation run. As a general guideline, the simulation should be
run long enough to create around 10 batch intervals and possibly more,
depending on the desired confidence interval half-width. If a trade-off must be
made between the number of batch intervals and the batch interval length, then
err on the side of increasing the batch interval length. It is better to have a few
independent obser- vations than to have several autocorrelated observations
when using the statistical methods presented in this text.

9.6.3 Determining Run Length

Determining run length for terminating simulations is quite simple because a
nat- ural event or time point defines it. Determining the run length for a steady-
state simulation is more difficult because the simulation could be run
indefinitely. Ob- viously, running extremely long simulations can be very time-
consuming, so the objective is to determine an appropriate run length to ensure
a representative sam- ple of the steady-state response of the system.
The recommended length of the simulation run for a steady-state simulation
depends on the interval between the least frequently occurring event and the
type
250 Part I Study Chapters

FIGURE 9.7 Replication 3

Batch
intervals
Replication 2
compared with
replications.

Replication 1

Batch

Batch
Batch Batch
interval 1 interval 2 interval 3

Simulation time

of sampling method (replication or interval batching) used. If running indepen-

dent replications, it is usually a good idea to run the simulation long enough past
the warm-up point to let every type of event (including rare ones) happen many
times and, if practical, several hundred times. Remember, the longer the model is
run, the more confident you can become that the results represent the steady-
state behavior. A guideline for determining the initial run length for the interval
batch- ing method is much the same as for the replication method. Essentially,
the start- ing point for selecting the length of each batch interval is the length of
time cho- sen to run the simulation past the warm-up period when using the
replication method. The total run length is the sum of the time for each batch
interval plus the initial warm-up time. This guideline is illustrated in Figure 9.7.
The choice between running independent replications or batch intervals can
be made based on how long it takes the simulation to reach steady state. If the
warm-up period is short (that is, it doesn’t take long to simulate through the
warm- up period), then running replications is preferred over batch intervals
because run- ning replications guarantees that the observations are
independent. However, if the warm-up period is long, then the batch interval
method is preferred because the time required to get through the warm-up
period is incurred only once, which reduces the amount of time to collect the
necessary number of observations for a desired confidence interval. Also,
because a single, long run is made, chances are that a better estimate of the
model’s true steady-state behavior is obtained.

9.7 Summary
Simulation experiments can range from a few replications (runs) to a large num-
ber of replications. While “ballpark” decisions require little analysis, more
precise decision making requires more careful analysis and extensive
experimentation.
 Chapter 9 Simulation Output Analysis 251

Correctly configuring the model to produce valid output is essential to making

sound decisions.
This chapter has identified the issues involved in producing and analyzing
sim- ulation output. Key issues include determining run length, number of
replications, number of batch intervals, batch interval length, and warm-up
times. When run- ning multiple replications, the modeler needs to understand
the concepts of random number streams and random number seeds. Several
guidelines were presented throughout the chapter to help guide the analyst in
interpreting simulation output data using point and interval estimates.
Remember that the guidelines are not rigid rules that must be followed but
rather are common practices that have worked well in the past.

9.8 Review Questions

1. Define population, sample, and sample size.
2. If you run the same simulation model twice, would you expect to see
any difference in the results? Explain.
3. How are multiple simulation replications produced?
4. What do x¯ and s define, and why are they called point estimators?
5. What does a confidence interval express?
6. What does the confidence interval on simulation output reveal about the
validity of the model?
7. In order to apply statistical measures, such as standard deviation and
confidence interval estimation, what assumptions must be made
regarding simulation output?
8. What is the central limit theorem and how is it applied to simulation
output?
9. Give an example of a system in a transient state; in a steady state.
10. How do you determine the length of a terminating simulation run?
11.How many replications should be made for terminating simulations?
12.Verify that the 95 percent confidence interval has been correctly
computed by ProModel for the Average Minutes Per Entry statistic
shown in Figure 9.2. The ProModel half-width of 1.408 minutes
represents an approximate 14.3 percent error in the point estimate
x¯ = 9.820 minutes. Determine the approximate number of additional
replications needed to estimate the average time that customer entities
wait in the ATM queue with a percentage error of 5 percent and a
confidence level of 95 percent.
13. Describe two methods for obtaining sample
observations for a nonterminating simulation.
14. When determining the batch interval length, what is the
danger in making the interval too small?
252 Part I Study Chapters

15. Given the five batch means for the Average Minutes Per Entry
of customer entities at the ATM queue location in Figure 9.6,
estimate the lag-1 autocorrelation ρˆ1 . Note that five observations
are woefully inadequate for obtaining an accurate estimate of the
lag-1 autocorrelation. Normally you will want to base the estimate
on at least 100 observations. The question is designed to give you
some experience using the ρˆ1 equation so that you will understand
what the Stat::Fit software is doing when you use it in Lab Chapter
9 to crunch through an example with 100 observations.
16. Construct a Welch moving average with a window of 2
(w = 2) using the data in Table 9.4 and compare it to the Welch
moving average with a window of 6 (w = 6) presented in
Table 9.4.

References
Banks, Jerry; John S. Carson, II; Barry L. Nelson; and David M. Nicol. Discrete-Event
System Simulation. New Jersey: Prentice-Hall, 2001.
Bateman, Robert E.; Royce O. Bowden; Thomas J. Gogg; Charles R. Harrell; and Jack
R. A. Mott. System Improvement Using Simulation. Orem, UT: PROMODEL Corp.,
1997.
Hines, William W., and Douglas C. Montgomery. Probability and Statistics in Engineering
and Management Science. New York: John Wiley and Sons, 1990.
Law, Averill M., and David W. Kelton. Simulation Modeling and Analysis. New York:
McGraw-Hill, 2000.
Montgomery, Douglas C. Design and Analysis of Experiments. New York: John Wiley &
Sons, 1991.
Petersen, Roger G. Design and Analysis of Experiments. New York: Marcel Dekker, 1985.
Harrell−Ghosh−Bo I. Study 10. Comparing © The
wden: Simulation Chapters Systems McGraw−Hill
Using ProModel, Companies,
Second Edition

C H A P T E R

10 COMPARING SYSTEMS

“The method that proceeds without analysis is like the groping of a blind man.”
—Socrates

10.1 Introduction
In many cases, simulations are conducted to compare two or more alternative
de- signs of a system with the goal of identifying the superior system relative to
some performance measure. Comparing alternative system designs requires
careful analysis to ensure that differences being observed are attributable to
actual differ- ences in performance and not to statistical variation. This is where
running either multiple replications or batches is required. Suppose, for
example, that method A for deploying resources yields a throughput of 100
entities for a given time period while method B results in 110 entities for the
same period. Is it valid to conclude that method B is better than method A, or
might additional replications actually lead to the opposite conclusion?
You can evaluate alternative configurations or operating policies by
perform- ing several replications of each alternative and comparing the
average results from the replications. Statistical methods for making these types
of comparisons are called hypotheses tests. For these tests, a hypothesis is first
formulated (for example, that methods A and B both result in the same
throughput) and then a test is made to see whether the results of the simulation
lead us to reject the hypothe- sis. The outcome of the simulation runs may cause
us to reject the hypothesis that methods A and B both result in equal throughput
capabilities and conclude that the throughput does indeed depend on which
method is used.
This chapter extends the material presented in Chapter 9 by providing statis-
tical methods that can be used to compare the output of different simulation
mod- els that represent competing designs of a system. The concepts behind
hypothesis testing are introduced in Section 10.2. Section 10.3 addresses the
case when two

253
254 Part I Study Chapters

alternative system designs are to be compared, and Section 10.4 considers the
case when more than two alternative system designs are to be compared. Addi-
tionally, a technique called common random numbers is described in Section
10.5 that can sometimes improve the accuracy of the comparisons.

10.2 Hypothesis Testing

An inventory allocation example will be used to further explore the use of hy-
pothesis testing for comparing the output of different simulation models.
Suppose a production system consists of four machines and three buffer
storage areas. Parts entering the system require processing by each of the four
machines in a se- rial fashion (Figure 10.1). A part is always available for
processing at the first machine. After a part is processed, it moves from the
machine to the buffer stor- age area for the next machine, where it waits to be
processed. However, if the buffer is full, the part cannot move forward and
remains on the machine until a space becomes available in the buffer.
Furthermore, the machine is blocked and no other parts can move to the
machine for processing. The part exits the system after being processed by the
fourth machine.
The question for this system is how best to allocate buffer storage between
the machines to maximize the throughput of the system (number of parts
completed per hour). The production control staff has identified two candidate
strategies for allocating buffer capacity (number of parts that can be stored)
between machines, and simulation models have been built to evaluate the
proposed strategies.

FIGURE 10.1
Production system
with four
workstations and
three buffer storage
areas.

.72 4.56
Chapter 10 Comparing Systems 255

Suppose that Strategy 1 and Strategy 2 are the two buffer allocation
strategies proposed by the production control staff. We wish to identify the
strategy that maximizes the throughput of the production system (number of
parts completed per hour). Of course, the possibility exists that there is no
significant difference in the performance of the two candidate strategies. That is
to say, the mean through- put of the two proposed strategies is equal. A starting
point for our problem is to formulate our hypotheses concerning the mean
throughput for the production system under the two buffer allocation strategies.
Next we work out the details of setting up our experiments with the simulation
models built to evaluate each strat- egy. For example, we may decide to estimate
the true mean performance of each strategy (µ1 and µ2) by simulating each
strategy for 16 days (24 hours per day) past the warm-up period and
replicating the simulation 10 times. After we run experiments, we would use
the simulation output to evaluate the hypotheses concerning the mean
throughput for the production system under the two buffer allocation strategies.
In general, a null hypothesis, denoted H0, is drafted to state that the value of
µ1 is not significantly different than the value of µ2 at the α level of
significance. An alternate hypothesis, denoted H1, is drafted to oppose the null
hypothesis H0. For example, H1 could state that µ1 and µ2 are different at the α
level of significance. Stated more formally:
H0: µ1 = µ2 or equivalently H0: µ1 − µ2 =
0 H1: µ1 /= µ2 or equivalently H1: µ1 − µ2
/= 0
In the context of the example problem, the null hypothesis H0 states that the
mean throughputs of the system due to Strategy 1 and Strategy 2 do not differ.
The alternate hypothesis H1 states that the mean throughputs of the system
due to Strategy 1 and Strategy 2 do differ. Hypothesis testing methods are
designed such that the burden of proof is on us to demonstrate that H0 is not
true. Therefore, if our analysis of the data from our experiments leads us to
reject H0, we can be con- fident that there is a significant difference between the
two population means. In our example problem, the output from the simulation
model for Strategy 1 repre- sents possible throughput observations from one
population, and the output from the simulation model for Strategy 2 represents
possible throughput observations from another population.
The α level of significance in these hypotheses refers to the probability of
making a Type I error. A Type I error occurs when we reject H0 in favor of H1
when in fact H0 is true. Typically α is set at a value of 0.05 or 0.01. However,
the choice is yours, and it depends on how small you want the probability of
making a Type I error to be. A Type II error occurs when we fail to reject H0 in
favor of H1 when in fact H1 is true. The probability of making a Type II error is
denoted as β. Hypothesis testing methods are designed such that the probability
of making a Type II error, β, is as small as possible for a given value of α. The
relationship between α and β is that β increases as α decreases. Therefore,
we should be careful not to make α too small.
We will test these hypotheses using a confidence interval approach to
determine if we should reject or fail to reject the null hypothesis in favor of the
256 Part I Study Chapters

alternative hypothesis. The reason for using the confidence interval method
is that it is equivalent to conducting a two-tailed test of hypothesis with the
added bene- fit of indicating the magnitude of the difference between µ1 and
µ2 if they are in fact significantly different. The first step of this procedure is
to construct a confi- dence interval to estimate the difference between the
two means (µ1 − µ2). This can be done in different ways depending on how
the simulation experiments are conducted (we will discuss this later). For
now, let’s express the confidence inter- val on the difference between the two
means as
P[(x¯ 1 − x¯ 2 ) − hw ≤ µ1 − µ2 ≤ (x¯ 1 − x¯2 ) + hw] = 1 − α
where hw denotes the half-width of the confidence interval. Notice the similari-
ties between this confidence interval expression and the one given on page 227 in
Chapter 9. Here we have replaced x¯ with x¯1 − x¯2 and µ with µ1 − µ2 .
If the two population means are the same, then µ1 − µ2 = 0, which is our
null hypothesis H0. If H0 is true, our confidence interval should include zero
with a probability of 1 − α. This leads to the following rule for deciding
whether to re- ject or fail to reject H0. If the confidence interval includes
zero, we fail to reject H0 and conclude that the value of µ1 is not
significantly different than the value of µ2 at the α level of significance (the
mean throughput of Strategy 1 is not signifi- cantly different than the mean
throughput of Strategy 2). However, if the confi- dence interval does not
include zero, we reject H0 and conclude that the value of
µ1 is significantly different than the value of µ2 at the α level of significance
(throughput values for Strategy 1 and Strategy 2 are significantly different).
Figure 10.2(a) illustrates the case when the confidence interval contains
zero, leading us to fail to reject the null hypothesis H0 and conclude that there is
no sig- nificant difference between µ1 and µ2. The failure to obtain sufficient
evidence to pick one alternative over another may be due to the fact that there
really is no dif- ference, or it may be a result of the variance in the observed
outcomes being too high to be conclusive. At this point, either additional
replications may be run or one of several variance reduction techniques might
be employed (see Section 10.5). Figure 10.2(b) illustrates the case when the
confidence interval is completely to the

FIGURE 10.2 (a Fail to

Three possible
) [------|------] reject H0
positions of a
confidence
interval relative to Reject H0
zero. (b [------|------]
)

Reject H0
[------|------]
(c)
µ,1 - µ,2 = 0

[------|------] denotes confidence interval (x1 - x2) ± hw

 Chapter 10 Comparing Systems 257

left of zero, leading us to reject H0. This case suggests that µ1 − µ2 < 0 or,
equiv- alently, µ1 < µ2. Figure 10.2(c) illustrates the case when the
confidence interval is completely to the right of zero, leading us to also
reject H0. This case suggests that µ1 − µ2 > 0 or, equivalently, µ1 > µ2.
These rules are commonly used in practice to make statements about how
the population means differ (µ1 > µ2 or µ1 < µ2) when the confidence
interval does not include zero (Banks et al. 2001; Hoover and Perry 1989).

10.3 Comparing Two Alternative System Designs

In this section, we will present two methods based on the confidence interval
approach that are commonly used to compare two alternative system
designs. To facilitate our understanding of the confidence interval methods,
the presentation will relate to the buffer allocation example in Section 10.2,
where the production control staff has identified two candidate strategies
believed to maximize the throughput of the system. We seek to discover if
the mean throughputs of the system due to Strategy 1 and Strategy 2 are
significantly different. We begin by es- timating the mean performance of the
two proposed buffer allocation strategies (µ1 and µ2) by simulating each
strategy for 16 days (24 hours per day) past the warm- up period. The
simulation experiment was replicated 10 times for each strategy. Therefore,
we obtained a sample size of 10 for each strategy (n1 = n2 = 10). The
average hourly throughput achieved by each strategy is shown in Table 10.1.
As in Chapter 9, the methods for computing confidence intervals in this
chap- ter require that our observations be independent and normally distributed.
The 10 observations in column B (Strategy 1 Throughput) of Table 10.1 are
independent

TABLE 10.1 Comparison of Two Buffer Allocation Strategies

(A) (B) (C)

Strategy 1 Strategy 2
Replication Throughput x1 Throughput x2

1 54.48 56.01
2 57.36 54.08
3 54.81 52.14
4 56.20 53.49
5 54.83 55.49
6 57.69 55.00
7 58.33 54.88
8 57.19 54.47
9 56.84 54.93
10 55.29 55.84
Sample mean x¯i, for i = 1, 2 56.30 54.63
Sample standard deviation si, for i = 1, 2 1.37 1.17
Sample variance s 2 , for i = 1, 2 1.89 1.36
i
258 Part I Study Chapters

because a unique segment (stream) of random numbers from the random number
generator was used for each replication. The same is true for the 10 observations
in column C (Strategy 2 Throughput). The use of random number streams is
dis- cussed in Chapters 3 and 9 and later in this chapter. At this point we are
assuming that the observations are also normally distributed. The
reasonableness of assum- ing that the output produced by our simulation
models is normally distributed is discussed at length in Chapter 9. For this data
set, we should also point out that two different sets of random numbers were
used to simulate the 10 replications of each strategy. Therefore, the observations
in column B are independent of the observa- tions in column C. Stated another
way, the two columns of observations are not correlated. Therefore, the
observations are independent within a population (strat- egy) and between
populations (strategies). This is an important distinction and will be employed
later to help us choose between different methods for computing the confidence
intervals used to compare the two strategies.
From the observations in Table 10.1 of the throughput produced by each strat-
egy, it is not obvious which strategy yields the higher throughput. Inspection of the
summary statistics indicates that Strategy 1 produced a higher mean throughput
for the system; however, the sample variance for Strategy 1 was higher than for
Strategy 2. Recall that the variance provides a measure of the variability of the data
and is obtained by squaring the standard deviation. Equations for computing the
sample mean x¯ , sample variance s2, and sample standard deviation s are given
in Chapter 9. Because of this variation, we should be careful when making
conclu- sions about the population of throughput values (µ1 and µ2) by only
inspecting the point estimates (x¯1 and x¯2 ). We will avoid the temptation and use
the output from the 10 replications of each simulation model along with a
confidence interval to make a more informed decision.
We will use an α = 0.05 level of significance to compare the two
candidate strategies using the following hypotheses:
H 0: µ1 − µ2 =
0 H1: µ1 − µ2
/= 0
where the subscripts 1 and 2 denote Strategy 1 and Strategy 2, respectively. As
stated earlier, there are two common methods for constructing a confidence
interval for evaluating hypotheses. The first method is referred to as the Welch
confidence interval (Law and Kelton 2000; Miller 1986) and is a modified
two- sample-t confidence interval. The second method is the paired-t confidence
inter- val (Miller et al. 1990). We’ve chosen to present these two methods
because their statistical assumptions are more easily satisfied than are the
assumptions for other confidence interval methods.

10.3.1 Welch Confidence Interval for

Comparing Two Systems
The Welch confidence interval method requires that the observations drawn from
each population (simulated system) be normally distributed and independent
within a population and between populations. Recall that the observations in
Chapter 10 Comparing Systems 259

Table 10.1 are independent and are assumed normal. However, the Welch
confi- dence interval method does not require that the number of samples
drawn from one population (n1) equal the number of samples drawn from the
other population (n2) as we did in the buffer allocation example. Therefore, if
you have more ob- servations for one candidate system than for the other
candidate system, then by all means use them. Additionally, this approach
does not require that the two pop- ulations have equal variances (σ 2 = σ 2 =
σ 2 ) as do other approaches. This
1
is 2
useful because we seldom know the true value of the variance of a population.
Thus we are not required to judge the equality of the variances based on the sam-
ple variances we compute for each population (s21 and s22 ) before using the Welch
confidence interval method.
The Welch confidence interval for an α level of significance is
P[(x¯ 1 − x¯ 2 ) − hw ≤ µ1 − µ2 ≤ (x¯ 1 − x¯2 ) + hw] = 1 − α
where x¯ 1 and x¯2 represent the sample means used to estimate the
population means µ1 and µ2; hw denotes the half-width of the confidence
interval and is computed by

hw = tdf,α/2 s12 s2
+
n1 n2
where df (degrees of freedom) is estimated by
2
s2 n + s2 n
1 1 2 2
df ≈ 2
2 1 − 1) + s2
2
2 (n2 − 1)
s12 n 1
n
(n
and tdf,α/2 is a factor obtained from the Student’s t table in Appendix B based on
the value of α/2 and the estimated degrees of freedom. Note that the degrees of
freedom term in the Student’s t table is an integer value. Given that the estimated
degrees of freedom will seldom be an integer value, you will have to use
interpo- lation to compute the tdf,α/2 value.
For the example buffer allocation problem with an α = 0.05 level of
signifi-
cance, we use these equations and data from Table 10.1 to compute
[1.89/10 + 1.36/10]2
df ≈
[1.89/10]2/ − + [1.36/10]2/(10 ≈ 17.5
1)
(10 1) −
and
/
1.89 1.36 √
hw = t17.5,0.025 + 0.325 = 1.20 parts per hour
10 =
10
2.106

where tdf,α/2 = t17.5,0.025 = 2.106 is determined from Student’s t table in Appen-

dix B by interpolation. Now the 95 percent confidence interval is
(x¯1 − x¯ 2 ) − hw ≤ µ1 − µ2 ≤ (x¯1 − x¯ 2 ) + hw
(56.30 − 54.63) − 1.20 ≤ µ1 − µ2 ≤ (56.30 − 54.63)
+ 1.20 0.47 ≤ µ1 − µ2 ≤ 2.87
260 Part I Study Chapters

With approximately 95 percent confidence, we conclude that there is a

significant difference between the mean throughputs of the two strategies
because the in- terval excludes zero. The confidence interval further
suggests that the mean throughput µ1 of Strategy 1 is higher than the mean
throughput µ2 of Strategy 2 (an estimated 0.47 to 2.87 parts per hour higher).

10.3.2 Paired- t Confidence Interval for

Comparing Two Systems
Like the Welch confidence interval method, the paired-t confidence interval
method requires that the observations drawn from each population (simulated
sys- tem) be normally distributed and independent within a population.
However, the paired-t confidence interval method does not require that the
observations between populations be independent. This allows us to use a
technique called common random numbers to force a positive correlation
between the two populations of observations in order to reduce the half-
width of our confidence interval without increasing the number of
replications. Recall that the smaller the half-width, the better our estimate.
The common random numbers technique is discussed in Sec- tion 10.5.
Unlike the Welch method, the paired-t confidence interval method does
require that the number of samples drawn from one population (n1) equal the
num- ber of samples drawn from the other population (n2) as we did in the
buffer alloca- tion example. And like the Welch method, the paired-t
confidence interval method does not require that the populations have equal
variances (σ 2 = σ 2 = σ 2 ). This is 1 2
useful because we seldom know the true value of the variance of a population. Thus
we are not required to judge the equality of the variances based on the sample
variances we compute for each population (s21 and s 22) before using the paired-t
confidence interval method.
Given n observations (n1 = n2 = n), we pair the observations from each
population (x1 j and x2 j ) to define a new random variable x(1−2) j = x1 j − x2 j ,
for j = 1, 2, 3, . . . , n. The x1 j denotes the jth observation from the first
population sampled (the output from the jth replication of the simulation
model for the first alternative design), x2 j denotes the jth observation from the
second population sampled (the output from the jth replication of the
simulation model for the second alternative design), and x(1−2) j denotes the
difference between the jth observations from the two populations. The point
estimators for the new random variable are

j =1
Sample mean = n
x(1−2) j
x¯ (1−2) = n
n 2
j =1
x x
(1−2) j − ¯(1−2)
Sample standard deviation = s(1−2) =
n−1

where x¯ (1−2) estimates µ(1−2) and s(1−2) estimates

σ(1−2) .
Chapter 10 Comparing Systems 261

The half-width equation for the paired-t confidence interval is

(tn−1,α/2 )s(1−2)
hw = √
n
where tn−1,α/2 is a factor that can be obtained from the Student’s t table in
Appen- dix B based on the value of α/2 and the degrees of freedom (n −
1). Thus the paired-t confidence interval for an α level of significance is
P x¯ (1−2) − hw ≤ µ(1−2) ≤ x¯ (1−2) + hw = 1 − α
Notice that this is basically the same confidence interval expression presented in
Chapter 9 with x¯ (1−2) replacing x¯ and µ(1−2) replacing µ.
Let’s create Table 10.2 by restructuring Table 10.1 to conform to our new
“paired” notation and paired-t method before computing the confidence interval
necessary for testing the hypotheses
H0: µ1 − µ2 = 0 or using the new “paired” notation µ(1−2)
= 0 H1: µ1 − µ2 /= 0 or using the new “paired” notation
µ(1−2) /= 0
where the subscripts 1 and 2 denote Strategy 1 and Strategy 2, respectively.
The observations in Table 10.2 are identical to the observations in Table 10.1.
However, we added a fourth column. The values in the fourth column (col-
umn D) are computed by subtracting column C from column B. This fourth
column represents the 10 independent observations (n = 10) of our new random
variable x(1−2) j .

TABLE 10.2 Comparison of Two Buffer Allocation Strategies

Based on the Paired Differences

(A) (B) (C) (D)

Throughpu
t
Strategy 1 Strategy 2 Difference (B − C)
Replication ( j ) Throughput x1 j Throughput x2 j x(1−2) j = x 1 j − x 2
j
1 54.48 56.01 −1.53
2 57.36 54.08 3.28
3 54.81 52.14 2.67
4 56.20 53.49 2.71
5 54.83 55.49 −0.66
6 57.69 55.00 2.69
7 58.33 54.88 3.45
8 57.19 54.47 2.72
9 56.84 54.93 1.91
10 55.29 55.84 −0.55
Sample mean 1.67
x¯ (1−2) standard deviation s(1−2)
Sample 1.85
Sample variance s2 3.42
(1−2)
262 Part I Study Chapters

Now, for an α = 0.05 level of significance, the confidence interval on

the new random variable x(1−2) j in the Throughput Difference column of
Table 10.2 is computed using our equations as follows:
j =1 x(1−2) j
10
x¯ (1−2) =
= 1.67 parts per hour
10
10
x 2
− 1.67
j =1 ( 1 −2 ) j
s(1−2) =
10 = 1.85 parts per hour
1
−
(2.262)1.85
(t9,0.025)1.85
hw = √ =
10 √
= 1.32 parts per hour
10
where tn−1,α/2 = t9,0.025 = 2.262 is determined from the Student’s t table
in Appendix B. The 95 percent confidence interval is
x¯ (1−2) − hw ≤ µ(1−2) ≤ x¯ (1−2) + hw
1.67 − 1.32 ≤ µ(1−2) ≤ 1.67 + 1.32
0.35 ≤ µ(1−2) ≤ 2.99
With approximately 95 percent confidence, we conclude that there is a signifi-
cant difference between the mean throughputs of the two strategies given that
the interval excludes zero. The confidence interval further suggests that the
mean throughput µ1 of Strategy 1 is higher than the mean throughput µ2 of
Strategy 2 (an estimated 0.35 to 2.99 parts per hour higher). This is basically the
same conclusion reached using the Welch confidence interval method presented
in Section 10.3.1.
Now let’s walk back through the assumptions made when we used the paired-
t method. The main requirement is that the observations in the Throughput
Difference column be independent and normally distributed. Pairing the
through- put observations for Strategy 1 with the throughput observations for
Strategy 2 and subtracting the two values formed the Throughput Difference
column of Table
10.2. The observations for Strategy 1 are independent because nonoverlapping
streams of random numbers were used to drive each replication. The
observations for Strategy 2 are independent for the same reason. The use of
random number streams is discussed in Chapters 3 and 9 and later in this
chapter. Therefore, there is no doubt that these observations meet the
independence requirement. It then follows that the observations under the
Throughput Difference column are also sta- tistically independent. The
assumption that has been made, without really knowing if it’s true, is that the
observations in the Throughput Difference column are nor- mally distributed.
The reasonableness of assuming that the output produced by our simulation
models is normally distributed is discussed at length in Chapter 9.

10.3.3 Welch versus the Paired-t Confidence Interval

It is difficult to say beforehand which method would produce the smaller con-
fidence interval half-width for a given comparison problem. If, however, the
 Chapter 10 Comparing Systems 263

observations between populations (simulated systems) are not independent, then

the Welch method cannot be used to compute the confidence interval. For this
case, use the paired-t method. If the observations between populations are inde-
pendent, the Welch method would be used to construct the confidence interval
should you have an unequal number of observations from each population
(n1 /= n2) and you do not wish to discard any of the observations in order to
pair them up as required by the paired-t method.

10.4 Comparing More Than Two Alternative System Designs

Sometimes we use simulation to compare more than two alternative designs of a
system with respect to a given performance measure. And, as in the case of
com- paring two alternative designs of a system, several statistical methods can
be used for the comparison. We will present two of the most popular methods
used in sim- ulation. The Bonferroni approach is presented in Section 10.4.1
and is useful for comparing three to about five designs. A class of linear
statistical models useful for comparing any number of alternative designs of a
system is presented in Sec- tion 10.4.2. A brief introduction to factorial design
and optimization experiments is presented in Section 10.4.3.

10.4.1 The Bonferroni Approach for Comparing

More Than Two Alternative Systems
The Bonferroni approach is useful when there are more than two alternative sys-
tem designs to compare with respect to some performance measure. Given K al-
ternative system designs to compare, the null hypothesis H0 and alternative
hypothesis H1 become
H0: µ1 = µ2 = µ3 = · · · = µK = µ for K alternative
systems H1: µi /= µi t for at least one pair i
/= i t
where i and it are between 1 and K and i < i t. The null hypothesis H0 states
that the means from the K populations (mean output of the K different
simulation models) are not different, and the alternative hypothesis H1 states that
at least one pair of the means are different.
The Bonferroni approach is very similar to the two confidence interval
methods presented in Section 10.3 in that it is based on computing confidence
intervals to determine if the true mean performance of one system (µi ) is
signif- icantly different than the true mean performance of another system (µi t
). In fact, either the paired-t confidence interval or the Welch confidence
interval can be used with the Bonferroni approach. However, we will describe it
in the context of using paired-t confidence intervals, noting that the paired-t
confidence interval method can be used when the observations across
populations are either inde- pendent or correlated.
The Bonferroni method is implemented by constructing a series of
confidence intervals to compare all system designs to each other (all pairwise
comparisons).
264 Part I Study Chapters

The number of pairwise comparisons for K candidate designs is computed

by K (K − 1)/2. A paired-t confidence interval is constructed for each
pairwise comparison. For example, four candidate designs, denoted D1, D2,
D3, and D4, require the construction of six [4(4 − 1)/2] confidence intervals
to evaluate the differences µ(D1−D2), µ(D1−D3), µ(D1−D4), µ(D2−D3),
µ(D2−D4), and µ(D3−D4). The six paired-t confidence intervals are

P x¯ (D1−D2) − hw ≤ µ(D1−D2) ≤ x¯ (D1−D2) + hw = 1

− α1 P x¯ (D1−D3) − hw ≤ µ(D1−D3) ≤ x¯ (D1−D3) +
hw = 1 − α2 P x¯ (D1−D4) − hw ≤ µ(D1−D4) ≤
x¯ (D1−D4) + hw = 1 − α3 P x¯ (D2−D3) − hw ≤
µ(D2−D3) ≤ x¯ (D2−D3) + hw = 1 − α4 P x¯ (D2−D4) −
hw ≤ µ(D2−D4) ≤ x¯ (D2−D4) + hw = 1 − α5 P
x¯ (D3−D4) − hw ≤ µ(D3−D4) ≤ x¯ (D3−D4) + hw = 1 −
α6
The rule for deciding if there is a significant difference between the true
mean performance of two system designs is the same as before. Confidence
intervals that exclude zero indicate a significant difference between the mean
performance of the two systems being compared.
In a moment, we will gain some experience using the Bonferroni approach
on our example problem. However, we should discuss an important issue about
the approach first. Notice that the number of confidence intervals quickly grows
as the number of candidate designs K increases [number of confidence intervals
= K (K − 1)/2]. This increases our computational workload, but, more
importantly, it has a rather dramatic effect on the overall confidence we can
place in our conclusions. Specifically, the overall confidence in the
correctness of our conclusions goes down as the number of candidate
designs increases. If we pick any one of our confidence intervals, say the
sixth one, and evaluate it separately from the other five confidence
intervals, the probability that the sixth confidence interval statement is
correct is equal to (1 − α6). Stated another way, we are 100(1 − α6)
percent confident that the true but unknown mean (µ(D3−D4)) lies within the
interval (x¯ (D3−D4) − hw) to (x¯ (D3−D4) + hw). Although each confi-
dence interval is computed separately, it is the simultaneous interpretation of
all the confidence intervals that allows us to compare the competing
designs for a system. The Bonferroni inequality states that the probability
of all six confidence
6
intervals being simultaneously correct is at least equal to (1 − i αi ). Stated
more generally, =1

i
P (all m confidence interval statements are correct) ≥ (1 − α) = 1 − i α
m =1

m
where α = αi and is the overall level of significance and m =
K (K −1)
and
i 2
is the number of
=1confidence interval statements.

If, in this example for comparing four candidate designs, we set α1 = α2

= α3 = α4 = α5 = α6 = 0.05, then the overall probability that all our
conclusions are correct is as low as (1 − 0.30), or 0.70. Being as low as 70
percent confident in
 Chapter 10 Comparing Systems 265

our conclusions leaves much to be desired. To combat this, we simply lower the
val- ues of the individual significance levels (α1 = α2 = α3 = · · · = αm ) so
their sum is not so large. However, this does not come without a price, as we
shall see later. One way to assign values to the individual significance levels
is to first es- tablish an overall level of significance α and then divide it by the
number of pair-
wise comparisons. That is,
α
αi = for i = 1, 2, 3, . . . , K (K− 1)/2
K (K − 1)/2
Note, however, that it is not required that the individual significance levels be as-
signed the same value. This is useful in cases where the decision maker wants to
place different levels of significance on certain comparisons.
Practically speaking, the Bonferroni inequality limits the number of
system de- signs that can be reasonably compared to about five designs or
less. This is because controlling the overall significance level α for the test
requires the assignment of small values to the individual significance levels
(α1 = α2 = α3 = · · · = αm ) if more than five designs are compared. This
presents a problem because the width of a confidence interval quickly
increases as the level of significance is reduced. Recall that the width of a
confidence interval provides a measure of the accuracy of the estimate.
Therefore, we pay for gains in the overall confidence of our test by reducing
the accuracy of our individual estimates (wide confidence intervals). When
accurate estimates (tight confidence intervals) are desired, we recommend
not using the Bonferroni approach when comparing more than five system
designs. For comparing more than five system designs, we recommend that
the analysis of variance technique be used in conjunction with perhaps the
Fisher’s least signifi- cant difference test. These methods are presented in
Section 10.4.2.
Let’s return to the buffer allocation example from the previous section and
apply the Bonferroni approach using paired-t confidence intervals. In this case,
the production control staff has devised three buffer allocation strategies to com-
pare. And, as before, we wish to determine if there are significant differences
between the throughput levels (number of parts completed per hour) achieved
by the strategies. Although we will be working with individual confidence
intervals, the hypotheses for the overall α level of significance are
H 0 : µ1 = µ2 = µ3 = µ
H1: µ1 /= µ2 or µ1 /= µ3 or µ2 /= µ3
where the subscripts 1, 2, and 3 denote Strategy 1, Strategy 2, and Strategy 3,
respectively.
To evaluate these hypotheses, we estimated the performance of the three
strategies by simulating the use of each strategy for 16 days (24 hours per
day) past the warm-up period. And, as before, the simulation was replicated 10
times for each strategy. The average hourly throughput achieved by each
strategy is shown in Table 10.3.
The evaluation of the three buffer allocation strategies (K = 3)
requires that three [3(3 − 1)/2] pairwise comparisons be made. The three
pairwise
266 Part I Study Chapters

TABLE 10.3 Comparison of Three Buffer Allocation Strategies (K = 3)

Based on Paired Differences

(A) (B) (C) (D) (E) (F) (G)

Strategy 1 Strategy 2 Strategy 3 Difference (B − C) Difference (B − D)
Difference (C − D) Rep. Throughput Throughput Throughput Strategy 1 − Strategy
2 Strategy 1 − Strategy 3 Strategy 2 − Strategy 3 (j) x1 j x2 j x3 j
x(1−2) j x(1−3) j x(2−3) j

1 54.48 56.01 57.22 −1.53 −2.74 −1.21

2 57.36 54.08 56.95 3.28 0.41 −2.87
3 54.81 52.14 58.30 2.67 −3.49 −6.16
4 56.20 53.49 56.11 2.71 0.09 −2.62
5 54.83 55.49 57.00 −0.66 −2.17 −1.51
6 57.69 55.00 57.83 2.69 −0.14 −2.83
7 58.33 54.88 56.99 3.45 1.34 −2.11
8 57.19 54.47 57.64 2.72 −0.45 −3.17
9 56.84 54.93 58.07 1.91 −1.23 −3.14
10 55.29 55.84 57.81 −0.55 −2.52 −1.97
x¯(i −i t ) , for all i and i t between 1 and 3, with i < i t 1.67 −1.09 −2.76
s(i −i t ) , for all i and it between 1 and 3, with i < it 1.85 1.58 1.37

comparisons are shown in columns E, F, and G of Table 10.3. Also shown in Table
10.3 are the sample means x¯(i −i t ) and sample standard deviations s(i −i t ) for each
pairwise comparison.
Let’s say that we wish to use an overall significance level of α = 0.06 to
eval- uate our hypotheses. For the individual levels of significance, let’s set
α1 = α2 = α3 = 0.02 by using the equation
α
0.06
αi = =
= 0.02
3 for i = 1, 2, 3
3
The computation of the three paired-t confidence intervals using the method out-
lined in Section 10.3.2 and data from Table 10.3 follows:

Comparing µ(1−2): α1 = 0.02

tn−1,α1 /2 = t9,0.01 = 2.821 from Appendix B

hw = (t9,0.01 )s(1−2) (2.821)1.85

√
√ = 10
n
hw = 1.65 parts per hour

The approximate 98 percent confidence interval

is

x¯ (1−2) − hw ≤ µ(1−2) ≤ x¯ (1−2) + hw

1.67 − 1.65 ≤ µ(1−2) ≤ 1.67 + 1.65
0.02 ≤ µ(1−2) ≤ 3.32
Chapter 10 Comparing Systems 267

Comparing µ(1−3): α2 = 0.02

tn−1,α2 /2 = t9,0.01 = 2.821 from Appendix B

hw = (t9,0.01 )s(1−3) (2.821)1.58

√
√ = 10
n
hw = 1.41 parts per hour
The approximate 98 percent confidence interval
is
x¯ (1−3) − hw ≤ µ(1−3) ≤ x¯ (1−3) + hw
−1.09 − 1.41 ≤ µ(1−3) ≤ −1.09 + 1.41
−2.50 ≤ µ(1−3) ≤ 0.32
Comparing µ(2−3): The approximate 98 percent confidence interval is
−3.98 ≤ µ(2−3) ≤ −1.54
Given that the confidence interval about µ(1−2) excludes zero, we
conclude that there is a significant difference in the mean throughput
produced by Strate- gies 1 (µ1) and 2 (µ2). The confidence interval further
suggests that the mean throughput µ1 of Strategy 1 is higher than the mean
throughput µ2 of Strategy 2 (an estimated 0.02 parts per hour to 3.32 parts
per hour higher). This conclusion should not be surprising because we
concluded that Strategy 1 resulted in a higher throughput than Strategy 2
earlier in Sections 10.3.1 and 10.3.2. However, notice that this confidence
interval is wider than the one computed in Section 10.3.2 for comparing
Strategy 1 to Strategy 2 using the same data. This is because the earlier
confidence interval was based on a significance level of 0.05 and this one is
based on a significance level of 0.02. Notice that we went from using t9,0.025
= 2.262 for the paired-t confidence interval in Section 10.3.2 to t9,0.01 =
2.821 for this confidence interval, which increased the width of the interval
to the point that it is very close to including zero.
Given that the confidence interval about µ(1−3) includes zero, we conclude
that there is no significant difference in the mean throughput produced by Strate-
gies 1 (µ1) and 3 (µ3). And from the final confidence interval about µ(2−3),
we conclude that there is a significant difference in the mean throughput
produced by Strategies 2 (µ2) and 3 (µ3). This confidence interval suggests
that the through- put of Strategy 3 is higher than the throughput of Strategy 2
(an estimated 1.54 parts per hour to 3.98 parts per hour higher).
Recall that our overall confidence for these conclusions is approximately
94 percent. Based on these results, we may be inclined to believe that Strategy 2
is the least favorable with respect to mean throughput while Strategies 1 and 3
are the most favorable with respect to mean throughput. Additionally, the
difference in the mean throughput of Strategy 1 and Strategy 3 is not significant.
Therefore, we recommend that you implement Strategy 3 in place of your own
Strategy 1 because Strategy 3 was the boss’s idea.
In this case, the statistical assumptions for using the Bonferroni approach
are the same as for the paired-t confidence interval. Because we used the
Student’s t
268 Part I Study Chapters

distribution to build the confidence intervals, the observations in the Throughput

Difference columns of Table 10.3 must be independent and normally distributed.
It is reasonable to assume that these two assumptions are satisfied here for the
Bonferroni test using the same logic presented at the conclusion of Section
10.3.2 for the paired-t confidence interval.

10.4.2 Advanced Statistical Models for Comparing More

Than Two Alternative Systems
Analysis of variance (ANOVA) in conjunction with a multiple comparison
test provides a means for comparing a much larger number of alternative
system de- signs than does the Welch confidence interval, paired-t confidence
interval, or Bonferroni approach. The major benefit that the ANOVA procedure
has over the Bonferroni approach is that the overall confidence level of the
test of hypothe- sis does not decrease as the number of candidate system
designs increases. There are entire textbooks devoted to ANOVA and
multiple comparison tests used for a wide range of experimental designs.
However, we will limit our focus to using these techniques for comparing the
performance of multiple system designs. As with the Bonferroni approach,
we are interested in evaluating the hypotheses
H0: µ1 = µ2 = µ3 = · · · = µK = µ for K alternative
systems H1: µi /= µi t for at least one pair i
/= i t
where i and it are between 1 and K and i < i t. After defining some new
terminol- ogy, we will formulate the hypotheses differently to conform to the
statistical model used in this section.
An experimental unit is the system to which treatments are applied. The
sim- ulation model of the production system is the experimental unit for the
buffer allocation example. A treatment is a generic term for a variable of
interest and a factor is a category of the treatment. We will consider only the
single-factor case with K levels. Each factor level corresponds to a different
system design. For the buffer allocation example, there are three factor levels
—Strategy 1, Strategy 2, and Strategy 3. Treatments are applied to the
experimental unit by running the simulation model with a specified factor level
(strategy).
An experimental design is a plan that causes a systematic and efficient ap-
plication of treatments to an experimental unit. We will consider the completely
randomized (CR) design—the simplest experimental design. The primary as-
sumption required for the CR design is that experimental units (simulation
models) are homogeneous with respect to the response (model’s output) before
the treat- ment is applied. For simulation experiments, this is usually the case
because a model’s logic should remain constant except to change the level of
the factor under investigation. We first specify a test of hypothesis and
significance level, say an α value of 0.05, before running experiments. The
null hypothesis for the buffer allocation problem would be that the mean
throughputs due to the applica- tion of treatments (Strategies 1, 2, and 3) do not
differ. The alternate hypothesis
Chapter 10 Comparing Systems 269

TABLE 10.4 Experimental Results and Summary Statistics

for a Balanced Experimental Design

Strategy 1 Strategy 2 Strategy 3

Throughpu Throughpu Throughpu
Replication ( j) t (x1 j ) t (x 2 j ) t (x3 j )
1 54.48 56.01 57.22
2 57.36 54.08 56.95
3 54.81 52.14 58.30
4 56.20 53.49 56.11
5 54.83 55.49 57.00
6 57.69 55.00 57.83
7 58.33 54.88 56.99
8 57.19 54.47 57.64
9 56.84 54.93 58.07
10 55.29 55.84 57.81
n 10
Sum xi = x ij = x ij , for = 1, 2, 3 563.02 546.33 573.92
i x ij j =1 x ij
10
j =1
n
Sample mean x¯i = = , for i = 1, 2, 3 56.30 54.63 57.39
n 10

states that the mean throughputs due to the application of treatments (Strategies 1,
2, and 3) differ among at least one pair of strategies.
We will use a balanced CR design to help us conduct this test of hypothesis.
In a balanced design, the same number of observations are collected for each
fac- tor level. Therefore, we executed 10 simulation runs to produce 10
observations of throughput for each strategy. Table 10.4 presents the
experimental results and summary statistics for this problem. The response
variable (x ij ) is the observed throughput for the treatment (strategy). The
subscript i refers to the factor level (Strategy 1, 2, or 3) and j refers to an
observation (output from replication j) for that factor level. For example, the
mean throughput response of the simulation model for the seventh replication
of Strategy 2 is 54.88 in Table 10.4. Parameters for this balanced CR design are
Number of factor levels = number of alternative system designs = K = 3
Number of observations for each factor level = n = 10
Total number of observations = N = nK = (10)3 = 30
Inspection of the summary statistics presented in Table 10.4 indicates that
Strategy 3 produced the highest mean throughput and Strategy 2 the lowest.
Again, we should not jump to conclusions without a careful analysis of the
experimental data. Therefore, we will use analysis of variance (ANOVA) in
con- junction with a multiple comparison test to guide our decision.
Analysis of Variance
Analysis of variance (ANOVA) allows us to partition the total variation in the out-
put response from the simulated system into two components—variation due to
270 Part I Study Chapters

the effect of the treatments and variation due to experimental error (the inherent
variability in the simulated system). For this problem case, we are interested in
knowing if the variation due to the treatment is sufficient to conclude that the
per- formance of one strategy is significantly different than the other with
respect to mean throughput of the system. We assume that the observations are
drawn from normally distributed populations and that they are independent
within a strategy and between strategies. Therefore, the variance reduction
technique based on common random numbers (CRN) presented in Section 10.5
cannot be used with this method.
The fixed-effects model is the underlying linear statistical model used for
the analysis because the levels of the factor are fixed and we will consider each
pos- sible factor level. The fixed-effectsÍ model is written as
for i = 1, 2, 3, . . . , K
x ij = µ + τi + ε ij
for j = 1, 2, 3, . . . , n
where τi is the effect of the ith treatment (ith strategy in our example) as a devia-
tion from the overall (common to all treatments) population mean µ and ε ij is
the error associated with this observation. In the context of simulation, the ε ij
term represents the random variation of the response x ij that occurred during
the jth replication of the ith treatment. Assumptions for the fixed-effects model
are that the sum of all τi equals zero and that the error terms ε ij are independent
and nor- mally distributed with a mean of zero and common variance. There
are methods for testing the reasonableness of the normality and common
variance assump- tions. However, the procedure presented in this section is
reported to be somewhat insensitive to small violations of these assumptions
(Miller et al. 1990). Specifi- cally, for the buffer allocation example, we are
testing the equality of three treatment effects (Strategies 1, 2, and 3) to
determine if there are statistically sig- nificant differences among them.
Therefore, our hypotheses are written as
H0: τ1 = τ2 = τ3 = 0
H1: τi /= 0 for at least one i, for i = 1, 2, 3
Basically, the previous null hypothesis that the K population means are
all equal (µ1 = µ2 = µ3 = · · · = µK = µ) is replaced by the null
hypothesis τ1 = τ2 = τ3 = · · · = τK = 0 for the fixed-effects model.
Likewise, the alterna- tive hypothesis that at least two of the population
means are unequal is replaced by τi /= 0 for at least one i. Because only one
factor is considered in this problem, a simple one-way analysis of variance
is used to determine FCALC, the test statis- tic that will be used for the
hypothesis test. If the computed FCALC value exceeds a threshold value
called the critical value, denoted FCRITICAL, we shall reject the null
hypothesis that states that the treatment effects do not differ and conclude
that there are statistically significant differences among the treatments
(strategies in our example problem).
To help us with the hypothesis test, let’s summarize the experimental results
shown in Table 10.4 for the example problem. The first summary statistic that
we will compute is called the sum of squares (SSi) and is calculated for the
ANOVA for each factor level (Strategies 1, 2, and 3 in this case). In a
balanced design
Chapter 10 Comparing Systems 271

where the number of observations n for each factor level is a constant, the sum of
squares is calculated using the formula
n x ij
1 2
n j=
SSi = j xi2j \ − for i = 1, 2, 3, . . . , K
=1 n

For this example, the sums of squares are

10
SS1 =
10
x2 \ j 1j 2
=1 x
−
j =1 1 j
10
(563.02)2
2 2 2
SS1 = [(54.48) + (57.36) + · · · + (55.29) ] − = 16.98
10
SS2 =
12.23
SS3 = 3.90

The grand total of the N observations (N = nK ) collected from the output re-
sponse of the simulated system is computed by

K
Grand total = x.. = n
x ij =
K
xi
i j
=1 =1 i
=1

The overall mean of the N observations collected from the output response of
the simulated system is computed by
x.
K j =1 x ij
Overall mean = x¯ .. = =1
i n .
=
N N

Using the data in Table 10.4 for the buffer allocation example, these statistics are

3
Grand total = x.. = xi = 563.02 + 546.33 + 573.92 = 1,683.27
i
=1

Overall mean = x¯ .. = x.. 1,683.27

= = 56.11
N 30
Our analysis is simplified because a balanced design was used (equal obser-
vations for each factor level). We are now ready to define the computational
formulas for the ANOVA table elements (for a balanced design) needed to
conduct the hypothesis test. As we do, we will construct the ANOVA table for
the buffer allocation example. The computational formulas for the ANOVA
table elements are
Degrees of freedom total (corrected) = df(total corrected) = N − 1
= 30 − 1 = 29
Degrees of freedom treatment = df(treatment) = K − 1 = 3 − 1 = 2
Degrees of freedom error = df(error) = N − K = 30 − 3 = 27
272 Part I Study Chapters

and
K
SSi = 16.98 + 12.23 + 3.90 = 33.11
Sum of squares error = SSE = i
=1

r \ l
1
Sum of squares treatment = SST = x2 − x..
K
2

n i =1 i K

r 1
1 2 2 2 (1,683.27)2
((563.02) + = 38.62
SST = (546.33) + (573.92) )−
10 3

Sum of squares total (corrected) = SSTC = SST + SSE

= 38.62 + 33.11 = 71.73
and

SST 38.62
Mean square treatment = MST = = 19.31
2
=
df(treatment) 33.11
SSE
= 1.23
Mean square error = MSE = 27
=
df(error)
and finally

MST 19.31
Calculated F statistic = FCALC =
MSE 1.23 = 15.70
=

Table 10.5 presents the ANOVA table for this problem. We will compare the
value of FCALC with a value from the F table in Appendix C to determine
whether to reject or fail to reject the null hypothesis H0: τ1 = τ2 = τ3 =
0. The values obtained from the F table in Appendix C are referred to as
critical values and are determined by F(df(treatment), df(error); α). For this problem,
F(2,27; 0.05) = 3.35 = FCRITICAL, using a significance level (α) of 0.05.
Therefore, we will reject H0 since FCALC > FCRITICAL at the α = 0.05 level
of significance. If we believe the data in Table 10.4 satisfy the assumptions
of the fixed-effects model, then we would con- clude that the buffer
allocation strategy (treatment) significantly affects the mean

TABLE 10.5 Analysis of Variance Table

Source of Degrees of Sum of Mean

Variation Freedom Squares Square FCALC

Total (corrected) N − 1 = 29 SSTC = 71.73

Treatment (strategies) K−1=2 SST = 38.62 MST = 19.31 15.70
Error N − K = 27 SSE = 33.11 MSE = 1.23
Chapter 10 Comparing Systems 273

throughput of the system. We now have evidence that at least one strategy
produces better results than the other strategies. Next, a multiple comparison
test will be conducted to determine which strategy (or strategies) causes the
significance.

Multiple Comparison Test

Our final task is to conduct a multiple comparison test. The hypothesis test sug-
gested that not all strategies are the same with respect to throughput, but it did
not identify which strategies performed differently. We will use Fisher’s least
signifi- cant difference (LSD) test to identify which strategies performed
differently. It is generally recommended to conduct a hypothesis test prior to the
LSD test to de- termine if one or more pairs of treatments are significantly
different. If the hy- pothesis test failed to reject the null hypothesis, suggesting
that all µi were the same, then the LSD test would not be performed. Likewise,
if we reject the null hypothesis, we should then perform the LSD test. Because
we first performed a hypothesis test, the subsequent LSD test is often called a
protected LSD test.
The LSD test requires the calculation of a test statistic used to evaluate all
pairwise comparisons of the sample mean from each population (x¯1 , x¯ 2 ,
x¯3 , . . . , x¯ K ). In our example buffer allocation problem, we are dealing with
the sample mean throughput computed from the output of our simulation
models for the three strategies (x¯1 , x¯ 2 , x¯3 ). Therefore, we will make three
pairwise compar- isons of the sample means for our example, recalling that the
number of pairwise comparisons for K candidate designs is computed by K (K
− 1)/2. The LSD test statistic is calculated as
/
LSD(α) = t(df(error),α/2)
2(MSE)
n
The decision rule states that if the difference in the sample mean response values
exceeds the LSD test statistic, then the population mean response values are sig-
nificantly different at a given level of significance. Mathematically, the decision
rule is written as
If |x¯i − x¯i t | > LSD(α), then µi and µi t are significantly different at the
α level of significance.
For this problem, the LSD test statistic is determined at the α = 0.05 level
of significance: / /
2(MSE) 2(1.23)
LSD(0.05) = t27,0.025
= = 1.02
n 10
2.052
Table 10.6 presents the results of the three pairwise comparisons for the LSD
analysis. With 95 percent confidence, we conclude that each pair of means is dif-
ferent (µ1 /= µ2, µ1 /= µ3, and µ2 /= µ3). We may be inclined to believe that
the best strategy is Strategy 3, the second best strategy is Strategy 1, and the
worst strategy is Strategy 2.
Recall that the Bonferroni approach in Section 10.4.1 did not detect a sig-
nificant difference between Strategy 1 (µ1) and Strategy 3 (µ3). One possible
274 Part I Study Chapters

TABLE 10.6 LSD Analysis

Strategy 2 Strategy 1
x¯2 = x¯1 = 56.30
54.63
Strategy 3 |x¯ 2 − x¯ 3 | = 2.76 |x¯ 1 − x¯ 3 | = 1.09
x¯ 3 = 57.39 Significant Significant
(2.76 > 1.02) (1.09 > 1.02)

Strategy 1 |x¯ 1 − x¯ 2 | = 1.67

x¯ 1 = 56.30 Significant
(1.67 > 1.02)

explanation is that the LSD test is considered to be more liberal in that it will in-
dicate a difference before the more conservative Bonferroni approach. Perhaps if
the paired-t confidence intervals had been used in conjunction with common
random numbers (which is perfectly acceptable because the paired-t method
does not require that observations be independent between populations), then
the Bonferroni approach would have also indicated a difference. We are not
sug- gesting here that the Bonferroni approach is in error (or that the LSD test
is in error). It could be that there really is no difference between the
performances of Strategy 1 and Strategy 3 or that we have not collected
enough observations to be conclusive.
There are several multiple comparison tests from which to choose. Other
tests include Tukey’s honestly significant difference (HSD) test, Bayes LSD
(BLSD) test, and a test by Scheffe. The LSD and BLSD tests are considered to
be liberal in that they will indicate a difference between µi and µi t before the
more conservative Scheffe test. A book by Petersen (1985) provides more
information on multiple comparison tests.

10.4.3 Factorial Design and Optimization

In simulation experiments, we are sometimes interested in finding out how differ-
ent decision variable settings impact the response of the system rather than
simply comparing one candidate system to another. For example, we may want
to measure how the mean time a customer waits in a bank changes as the number
of tellers (the decision variable) is increased from 1 through 10. There are often
many decision variables of interest for complex systems. And rather than run
hundreds of experi- ments for every possible variable setting, experimental
design techniques can be used as a shortcut for finding those decision variables
of greatest significance (the variables that significantly influence the output of the
simulation model). Using ex- perimental design terminology, decision variables
are referred to as factors and the output measures are referred to as responses
(Figure 10.3). Once the response of in- terest has been identified and the factors
that are suspected of having an influence on this response defined, we can use a
factorial design method that prescribes how many runs to make and what level
or value to use for each factor.
 Chapter 10 Comparing Systems 275

FIGURE 10.3
Relationship
Factors (X1, X2, . . . , Simulation Output responses
between factors
Xn )
(decision variables) model
and output
responses.
The natural inclination when experimenting with multiple factors is to test
the impact that each individual factor has on system response. This is a simple
and straightforward approach, but it gives the experimenter no knowledge of
how fac- tors interact with each other. It should be obvious that experimenting
with two or more factors together can affect system response differently than
experimenting with only one factor at a time and keeping all other factors the
same.
One type of experiment that looks at the combined effect of multiple
factors on system response is referred to as a two-level, full-factorial design. In
this type of ex- periment, we simply define a high and a low setting for each
factor and, since it is a full-factorial experiment, we try every combination
of factor settings. This means that if there are five factors and we are testing
two different levels for each factor, we would test each of the 25 = 32
possible combinations of high and low factor levels. For factors that have no
range of values from which a high and a low can be chosen, the high and
low levels are arbitrarily selected. For example, if one of the factors being
investigated is an operating policy (like first come, first served or last come,
last served), we arbitrarily select one of the alternative policies as the high-
level setting and a different one as the low-level setting.
For experiments in which a large number of factors are considered, a two-
level, full-factorial design would result in an extremely large number of
combina- tions to test. In this type of situation, a fractional-factorial design is
used to strate- gically select a subset of combinations to test in order to “screen
out” factors with little or no impact on system performance. With the remaining
reduced number of factors, more detailed experimentation such as a full-
factorial experiment can be conducted in a more manageable fashion.
After fractional-factorial experiments and even two-level, full-factorial ex-
periments have been performed to identify the most significant factor level com-
binations, it is often desirable to conduct more detailed experiments, perhaps
over the entire range of values, for those factors that have been identified as
being the most significant. This provides more precise information for making
decisions re- garding the best, or optimal, factor values or variable settings for
the system. For a more detailed treatment of factorial design in simulation
experimentation, see Law and Kelton (2000).
In many cases, the number of factors of interest prohibits the use of even
fractional-factorial designs because of the many combinations to test. If this is
the case and you are seeking the best, or optimal, factor values for a system, an
alternative is to employ an optimization technique to search for the best
combina- tion of values. Several optimization techniques are useful for
searching for the combination that produces the most desirable response from
the simulation model without evaluating all possible combinations. This is the
subject of simulation op- timization and is discussed in Chapter 11.
276 Part I Study Chapters

10.5 Variance Reduction Techniques

One luxury afforded to model builders is that the variance of a performance
mea- sure computed from the output of simulations can be reduced. This is a
luxury be- cause reducing the variance allows us to estimate the mean value
of a random variable within a desired level of precision and confidence with
fewer replications (independent observations). The reduction in the required
number of replications is achieved by controlling how random numbers are used
to “drive” the events in the simulation model. These time-saving techniques are
called variance reduction techniques. The use of common random numbers
(CRN) is perhaps one of the most popular variance reduction techniques. This
section provides an introduction to the CRN technique, presents an example
application of CRN, and discusses how CRN works. For additional details
about CRN and a review of other variance reduction techniques, see Law and
Kelton (2000).

10.5.1 Common Random Numbers

The common random numbers (CRN) technique was invented for comparing
alternative system designs. Recall the proposed buffer allocation strategies for
the production system presented in Section 10.2. The objective was to decide
which strategy yielded the highest throughput for the production system. The
CRN tech- nique was not used to compare the performance of the strategies
using the paired-t confidence interval method in Section 10.3.2. However, it
would have been a good idea because the CRN technique provides a means
for comparing alternative system designs under more equal experimental
conditions. This is helpful in ensuring that the observed differences in the
performance of two system designs are due to the differences in the designs
and not to differences in experimental conditions. The goal is to evaluate each
system under the exact same circumstances to ensure a fair comparison.
Suppose a system is simulated to measure the mean time that entities wait in
a queue for service under different service policies. The mean time between
arrivals of entities to the system is exponentially distributed with a mean of
5.5 minutes. The exponentially distributed variates are generated using a stream
of numbers that are uniformly distributed between zero and 1, having been pro-
duced by the random number generator. (See Chapter 3 for a discussion on gen-
erating random numbers and random variates.) If a particular segment of the
random number stream resulted in several small time values being drawn from
the exponential distribution, then entities would arrive to the system faster.
This would place a heavier workload on the workstation servicing the entities,
which would tend to increase how long entities wait for service. Therefore, the
simula- tion of each policy should be driven by the same stream of random
numbers to en- sure that the differences in the mean waiting times are due only
to differences in the policies and not because some policies were simulated
with a stream of ran- dom numbers that produced more extreme conditions.
 Chapter 10 Comparing Systems 277

FIGURE 10.4
Stream
Unique seed
value assigned Rep.1
for each Seed 9
.83
replication. .
.
.
.12
Rep. 2
Seed 5
.93
.
.
.
.79
Rep. 3
Seed 3
.28
.
.
.

Distributions for arrival times, service times, and so on

Simulation models for each alternative

The goal is to use the exact random number from the stream for the exact
purpose in each simulated system. To help achieve this goal, the random number
stream can be seeded at the beginning of each independent replication to keep it
synchronized across simulations of each system. For example, in Figure 10.4,
the first replication starts with a seed value of 9, the second replication starts
with a seed value of 5, the third with 3, and so on. If the same seed values for
each repli- cation are used to simulate each alternative system, then the same
stream of ran- dom numbers will drive each of the systems. This seems simple
enough. How- ever, care has to be taken not to pick a seed value that places us
in a location on the stream that has already been used to drive the simulation in
a previous repli- cation. If this were to happen, the results from replicating the
simulation of a sys- tem would not be independent because segments of the
random number stream would have been shared between replications, and this
cannot be tolerated. Therefore, some simulation software provides a CRN option
that, when selected,
278 Part I Study Chapters

automatically assigns seed values to each replication to minimize the likelihood

of this happening.
A common practice that helps to keep random numbers synchronized
across systems is to assign a different random number stream to each stochastic
element in the model. For this reason, most simulation software provides
several unique streams of uniformly distributed random numbers to drive the
simulation. This concept is illustrated in Figure 10.5 in that separate random
number streams are used to generate service times at each of the four
machines. If an alternative design for the system was the addition of a fifth
machine, the effects of adding the fifth machine could be measured while
holding the behavior of the original four machines constant.
In ProModel, up to 100 streams (1 through 100) are available to assign to
any random variable specified in the model. Each stream can have one of 100
differ- ent initial seed values assigned to it. Each seed number starts generating
random numbers at an offset of 100,000 from the previous seed number (seed 1
generates 100,000 random numbers before it catches up to the starting point in
the cycle of seed 2). For most simulations, this ensures that streams do not
overlap. If you do

FIGURE 10.5 Stream 1 Stream 2 Stream 5 Stream 7

Unique random Rep. 1 Rep. 1 Rep. 1 Rep. 1
number stream Seed 99 Seed Seed 89 Seed 67
.83 51 .56 .25
assigned to each . .27 . .
stochastic . . . .
element in . . . .
system. .12 . .71 .99
.19
Rep. 2 Rep. 2 Rep. 2
Seed Rep. 2 Seed 7 Seed 23
75 Seed .45 .69
.93 33 . .
. .87 . .
. . . .
. . .74 .42
.79 .
.35 Rep. 3 Rep. 3
Rep. 3 Seed Seed 13
Seed 3 Rep. 3 49 .82
.28 Seed .53 .
. 79 . .
. .21 . .
. . .
.
.

Service time Service time Service time

distribution distribution distribution

Machine Machine
Machine Machine
1 3
2 4
Chapter 10 Comparing Systems 279

not specify an initial seed value for a stream that is used, ProModel will use the
same seed number as the stream number (stream 3 uses the third seed). A
detailed explanation of how random number generators work and how they
produce unique streams of random numbers is provided in Chapter 3.
Complete synchronization of the random numbers across different models is
sometimes difficult to achieve. Therefore, we often settle for partial synchro-
nization. At the very least, it is a good idea to set up two streams with one
stream of random numbers used to generate an entity’s arrival pattern and
the other stream of random numbers used to generate all other activities in
the model. That way, activities added to the model will not inadvertently alter
the arrival pattern because they do not affect the sample values generated
from the arrival distribution.

10.5.2 Example Use of Common Random Numbers

In this section the buffer allocation problem of Section 10.2 will be simulated
using CRN. Recall that the amount of time to process an entity at each machine
is a random variable. Therefore, a unique random number stream will be used
to draw samples from the processing time distributions for each machine. There
is no need to generate an arrival pattern for parts (entities) because it is assumed
that a part (entity) is always available for processing at the first machine.
Therefore, the assignment of random number streams is similar to that depicted
in Figure 10.5. Next, we will use the paired-t confidence interval to compare the
two competing buffer allocation strategies identified by the production control
staff. Also, note that the common random numbers technique can be used
with the Bonferroni approach when paired-t confidence intervals are used.
There are two buffer allocation strategies, and the objective is to
determine if one strategy results in a significantly different average
throughput (number of parts completed per hour). Specifically, we will test
at an α = 0.05 level of sig- nificance the following hypotheses:
H0: µ1 − µ2 = 0 or using the paired notation µ(1−2)
= 0 H1: µ1 − µ2 /= 0 or using the paired notation
µ(1−2) /= 0
where the subscripts 1 and 2 denote Strategy 1 and Strategy 2, respectively. As
before, each strategy is evaluated by simulating the system for 16 days (24 hours
per day) past the warm-up period. For each strategy, the experiment is replicated
10 times. The only difference is that we have assigned individual random
number streams to each process and have selected seed values for each
replication. This way, both buffer allocation strategies will be simulated using
identical streams of random numbers. The average hourly throughput
achieved by each strategy is paired by replication as shown in Table 10.7.
Using the equations of Section 10.3.2 and an α = 0.05 level of
significance,
a paired-t confidence interval using the data from Table 10.7 can be constructed:
x¯ (1−2) = 2.67 parts per hour
s(1−2) = 1.16 parts per hour
280 Part I Study Chapters

TABLE 10.7 Comparison of Two Buffer Allocation Strategies

Using Common Random Numbers

(A) (B) (C) (D)

Throughpu
t
Strategy 1 Strategy 2 Difference
(B − C) Replication ( j) Throughput x1 j Throughput x2 j x(1−2) j = x1 j − x2
j

1 79.05 75.09 3.96

2 54.96 51.09 3.87
3 51.23 49.09 2.14
4 88.74 88.01 0.73
5 56.43 53.34 3.09
6 70.42 67.54 2.88
7 35.71 34.87 0.84
8 58.12 54.24 3.88
9 57.77 55.03 2.74
10 45.08 42.55 2.53
Sample mean x¯ (1−2) 2.67
Sample standard deviation s(1−2) 1.16
Sample variance s2 1.35
(1−2)

and

(t9,0.025 )s(1−2)
hw (2.262)1.16
√ =
= n √ = 0.83 parts per hour
10

where tn−1,α/2 = t9,0.025 = 2.262 is determined from the Student’s t table

in Appendix B. The 95 percent confidence interval is

x¯ (1−2) − hw ≤ µ(1−2) ≤ x¯ (1−2) + hw

2.67 − 0.83 ≤ µ(1−2) ≤ 2.67 + 0.83
1.84 ≤ µ(1−2) ≤ 3.50
With approximately 95 percent confidence, we conclude that there is a
significant difference between the mean throughputs of the two strategies
because the interval excludes zero. The confidence interval further suggests that
the mean throughput
µ1 of Strategy 1 is higher than the mean throughput µ2 of Strategy 2 (an estimated
1.84 to 3.50 parts per hour higher).
The interesting point here is that the half-width of the confidence interval
computed from the CRN observations is considerably shorter than the half-width
computed in Section 10.3.2 without using CRN. In fact, the half-width using
CRN is approximately 37 percent shorter. This is due to the reduction in the
sample standard deviation s(1−2). Thus we have a more precise estimate of the
true mean difference without making additional replications. This is the
benefit of using variance reduction techniques.
 Chapter 10 Comparing Systems 281

10.5.3 Why Common Random Numbers Work

Using CRN does not actually reduce the variance of the output from the simula-
tion model. It is the variance of the observations in the Throughput Difference
column (column D) in Table 10.7 that is reduced. This happened because the ob-
servations in the Strategy 1 column are positively correlated with the
observations in the Strategy 2 column. This resulted from “driving” the two
simulated systems with exactly the same (or as close as possible) stream of
random numbers. The effect of the positive correlation is that the variance of
the observations in the Throughput Difference column will be reduced.
Although the observations between the strategy columns are correlated, the
observations down a particular strategy’s column are independent. Therefore, the
observations in the Throughput Difference column are also independent. This is
because each replication is based on a different segment of the random number
stream. Thus the independence assumption for the paired-t confidence interval
still holds. Note, however, that you cannot use data produced by using CRN to
calculate the Welch confidence interval or to conduct an analysis of variance.
These procedures require that the observations between populations (the strategy
columns in this case) be independent, which they are not when the CRN
technique is used.
As the old saying goes, “there is no such thing as a free lunch,” and there is
a hitch with using CRN. Sometimes the use of CRN can produce the opposite
effect and increase the sample standard deviation of the observations in the
Throughput Difference column. Without working through the mathematics,
know that this occurs when a negative correlation is created between the
observations from each system instead of a positive correlation. Unfortunately,
there is really no way of knowing beforehand if this will happen. However, the
likelihood of realizing a negative correlation in practice is low, so the ticket to
success lies in your ability to synchronize the random numbers. If good
synchronization is achieved, then the desired result of reducing the standard
deviation of the observations in the Difference column will likely be realized.

10.6 Summary
An important point to make here is that simulation, by itself, does not solve a
problem. Simulation merely provides a means to evaluate proposed solutions by
estimating how they behave. The user of the simulation model has the responsi-
bility to generate candidate solutions either manually or by use of automatic
optimization techniques and to correctly measure the utility of the solutions
based on the output from the simulation. This chapter presented several
statistical methods for comparing the output produced by simulation models
representing candidate solutions or designs.
When comparing two candidate system designs, we recommend using either
the Welch confidence interval method or the paired-t confidence interval. Also, a
282 Part I Study Chapters

variance reduction technique based on common random numbers can be used

in conjunction with the paired-t confidence interval to improve the precision of
the confidence interval. When comparing between three and five candidate
system designs, the Bonferroni approach is useful. For more than five
designs, the ANOVA procedure in conjunction with Fisher’s least significance
difference test is a good choice, assuming that the population variances are
approximately equal. Additional methods useful for comparing the output
produced by different simu- lation models can be found in Goldsman and
Nelson (1998).

10.7 Review Questions

1. The following simulation output was generated to compare four
candidate designs of a system.
a. Use the paired-t confidence interval method to compare Design 1 with
Design 3 using a 0.05 level of significance. What is your conclusion?
What statistical assumptions did you make to use the paired-t
confidence interval method?
b. Use the Bonferroni approach with Welch confidence intervals to
compare all four designs using a 0.06 overall level of significance.
What are your conclusions? What statistical assumptions did you
make to use the Bonferroni approach?
c. Use a one-way analysis of variance (ANOVA) with α = 0.05 to
determine if there is a significant difference between the designs.
What is your conclusion? What statistical assumptions did you make
to use the one-way ANOVA?

Waiting Time in System

Replication Design 1 Design 2 Design 3 Design 4

1 53.9872 58.1365 58.5438 60.1208

2 58.4636 57.6060 57.3973 59.6515
3 55.5300 58.5968 57.1040 60.5279
4 56.3602 55.9631 58.7105 58.1981
5 53.8864 58.3555 58.0406 60.3144
6 57.2620 57.0748 56.9654 59.1815
7 56.9196 56.0899 57.2882 58.3103
8 55.7004 59.8942 57.3548 61.6756
9 55.3685 57.5491 58.2188 59.6011
10 56.9589 58.0945 59.5975 60.0836
11 55.0892 59.2632 60.5354 61.1175
12 55.4580 57.4509 57.9982 59.5142
 Chapter 10 Comparing Systems 283

2. Why is the Bonferroni approach to be avoided when comparing more

than about five alternative designs of a system?
3. What is a Type I error in hypothesis testing?
4. What is the relationship between a Type I and a Type II error?
5. How do common random numbers reduce variation when comparing
two models?
6. Analysis of variance (ANOVA) allows us to partition the total variation in
the output from a simulation model into two components. What are they?
7. Why can common random numbers not be used if the Welch confidence
interval method is used?

Reference
s Banks, Jerry; John S. Carson; Berry L. Nelson; and David M. Nicol. Discrete-Event Sys-
tem Simulation. Englewood Cliffs, NJ: Prentice Hall, 2001.
Bateman, Robert E.; Royce O. Bowden; Thomas J. Gogg; Charles R. Harrell; and Jack
R. A. Mott. System Improvement Using Simulation. Orem, UT: PROMODEL Corp.,
1997.
Goldsman, David, and Berry L. Nelson. “Comparing Systems via Simulation.” Chapter 8
in Handbook of Simulation. New York: John Wiley and Sons, 1998.
Hines, William W., and Douglas C. Montgomery. Probability and Statistics in Engineering
and Management Science. New York: John Wiley & Sons, 1990.
Hoover, Stewart V., and Ronald F. Perry. Simulation: A Problem-Solving Approach.
Reading, MA: Addison-Wesley, 1989.
Law, Averill M., and David W. Kelton. Simulation Modeling and Analysis. New York:
McGraw-Hill, 2000.
Miller, Irwin R.; John E. Freund; and Richard Johnson. Probability and Statistics for
Engineers. Englewood Cliffs, NJ: Prentice Hall, 1990.
Miller, Rupert G. Beyond ANOVA, Basics of Applied Statistics, New York: Wiley, 1986.
Montgomery, Douglas C. Design and Analysis of Experiments. New York: John Wiley &
Sons, 1991.
Petersen, Roger G. Design and Analysis of Experiments. New York: Marcel Dekker, 1985.
Harrell−Ghosh−Bo I. Study 11. Simulation © The
wden: Simulation Chapters Optimization McGraw−Hill
Using ProModel, Companies,
Second Edition

C H A P T E R

11 SIMULATION
OPTIMIZATION

“Man is a goal seeking animal. His life only has meaning if he is reaching out
and striving for his goals.”
—Aristotle

11.1 Introduction
Simulation models of systems are built for many reasons. Some models are built
to gain a better understanding of a system, to forecast the output of a system, or
to compare one system to another. If the reason for building simulation models is
to find answers to questions like “What are the optimal settings for to mini-
mize (or maximize) ?” then optimization is the appropriate technology to
combine with simulation. Optimization is the process of trying different
combina- tions of values for the variables that can be controlled to seek the
combination of values that provides the most desirable output from the
simulation model.
For convenience, let us think of the simulation model as a black box that
imitates the actual system. When inputs are presented to the black box, it
produces output that estimates how the actual system responds. In our
question, the first blank represents the inputs to the simulation model that are
controllable by the decision maker. These inputs are often called decision
variables or factors. The second blank represents the performance measures of
interest that are computed from the stochastic output of the simulation model
when the decision variables are set to specific values (Figure 11.1). In the
question, “What is the optimal number of material handling devices needed to
minimize the time that workstations are starved for material?” the decision
variable is the number of material handling de- vices and the performance
measure computed from the output of the simulation model is the amount of
time that workstations are starved. The objective, then, is to seek the optimal
value for each decision variable that minimizes, or maximizes, the expected
value of the performance measure(s) of interest. The performance

285
286 Part I Study Chapters

FIGURE 11.1 Decision variables (X1, X2, . . . ,

Optimization Xn ) Simulation
Relationship between algorithm model
optimization
algorithm and
simulation model.

Output responses

measure is traditionally called the objective function. Note that the expected
value of the objective function is estimated by averaging the model’s output
over multi- ple replications or batch intervals. The simulation optimization
problem is more formally stated as
Min or Max E [ f (X 1 , X 2 , . . . , X n )]
Subject to
Lower Boundi ≤ Xi ≤ Upper Boundi for i = 1, 2, . . . , n
where E [ f (X 1 , X 2 , . . . , X n )] denotes the expected value of the objective
function, which is estimated.
The search for the optimal solution can be conducted manually or
automated with algorithms specifically designed to seek the optimal solution
without evalu- ating all possible solutions. Interfacing optimization algorithms
that can automat- ically generate solutions and evaluate them in simulation
models is a worthwhile endeavor because
• It automates part of the analysis process, saving the analyst time.
• A logical method is used to efficiently explore the realm of
possible solutions, seeking the best.
• The method often finds several exemplary solutions for the analyst to
consider.
The latter is particularly important because, within the list of optimized solutions,
there may be solutions that the decision maker may have otherwise overlooked.
In 1995, PROMODEL Corporation and Decision Science, Incorporated,
developed SimRunner based on the research of Bowden (1992) on the use of
modern optimization algorithms for simulation-based optimization and machine
learning. SimRunner helps those wishing to use advanced optimization concepts
to seek better solutions from their simulation models. SimRunner uses an opti-
mization method based on evolutionary algorithms. It is the first widely used,
commercially available simulation optimization package designed for major sim-
ulation packages (ProModel, MedModel, ServiceModel, and ProcessModel).
Although SimRunner is relatively easy to use, it can be more effectively used
with a basic understanding of how it seeks optimal solutions to a problem.
Therefore,
the purpose of this chapter is fourfold:
• To provide an introduction to simulation optimization, focusing on the
latest developments in integrating simulation and a class of direct
optimization techniques called evolutionary algorithms.
 Chapter 11 Simulation Optimization 287

• To give the reader an appreciation of the advantages and disadvantages

of using evolutionary algorithms for optimizing simulated systems.
• To discuss tactical issues involved in the use of evolutionary algorithms
for simulation optimization.
• To present examples highlighting how simulation optimization can help
analysts in their quest to identify optimal solutions.
There are many approaches to optimizing simulated systems other than those
based on evolutionary algorithms. For a more complete review of other
approaches to simulation optimization, see Azadivar (1992), Jacobson and
Schruben (1989), and Safizadeh (1990).

11.2 In Search of the Optimum

Finding the so-called optimal solution is not an easy task. In fact, it is somewhat
like finding a needle in a haystack. The surest way to find the optimal solution is
to follow these steps (Akbay 1996):
Step 1. Identify all possible decision variables that affect the output of
the system.
Step 2. Based on the possible values of each decision variable, identify
all possible solutions.
Step 3. Evaluate each of these solutions accurately.
Step 4. Compare each solution fairly.
Step 5. Record the best answer.
If the output from the simulation model for all possible values of the
decision variables is recorded and plotted, the resulting plot would be called the
response surface. For problems involving only one or two decision variables,
the optimal solution can be identified quickly on the response surface. For
example, the optimal solution would be located at the highest peak on the
response surface for a maximization problem (Figure 11.2). However, it
becomes difficult to view the response surface when there are more than two
decision variables. Additionally, in many cases, there are simply too many
solutions to evaluate (search through) in a reasonable amount of time.
Therefore, a balance must be struck between finding the optimal solution and
the amount of time to allocate to the search.
Fortunately, researchers have developed several optimization methods that
can find the optimal solution for well-posed problems quickly without complete
enumeration of all possible alternatives. Example techniques include the
Newton- Raphson method and linear programming. Unfortunately, most realistic
problems are not well posed and do not lend themselves to being solved by
these optimiza- tion methods. For example, the response surfaces produced by
stochastic simula- tion models can be highly nonlinear, multimodal, and
noisy; can contain both discrete and continuous decision variables; and may
not provide independent and identically distributed observations. However,
many good heuristic optimization techniques relax the requirement that
problems be well posed.
288 Part I Study Chapters

FIGURE 11.2
SimRunner plots the
output responses
generated by a
ProModel simulation
model as it seeks the
optimal solution,
which occurred at
the highest peak.

Heuristic techniques consistently provide good, or near optimal, solutions

within a reasonable amount of search time. In fact, the use of a heuristic
technique does not preclude the chance of finding the optimal solution. It
may find the optimal solution, but there is no guarantee that it always will do
so. For example, the Nelder Mead Simplex Search technique (Nelder and
Mead 1965) has been extensively, and successfully, used for solving simulation
optimization problems (Barton and Ivey 1996). This technique often finds
the optimal solution even though there is no mathematical proof that it will
converge to the optimal solution for these types of problems.

11.3 Combining Direct Search Techniques with Simulation

Direct search techniques are a class of search techniques designed to seek
optimal values for the decision variables for a system so as to minimize, or
maximize, the output measure of interest from the system. These techniques
work directly with the output generated from the system of interest and
require no additional in- formation about the function that generates the output.
They are ideally suited for optimization tasks when mathematical models do not
exist from which gradient information can be computed to guide the search for
the optimal solution or if the cost of estimating the gradient is computationally
prohibitive. Such is often the case when dealing with stochastic simulation
models.
Early on, researchers realized the benefits of combining simulation and di-
rect search techniques. For example, Pegden and Gately (1977) developed an
 Chapter 11 Simulation Optimization 289

optimization module for the GASP IV simulation software package. Pegden and
Gately (1980) later developed another optimization module for use with the
SLAM simulation software package. Their optimization packages were based on
a variant of a direct search method developed by Hooke and Jeeves (1961).
After solving several problems, Pegden and Gately concluded that their
packages extended the capabilities of the simulation language by “providing for
automatic optimization of decision.”
The direct search algorithms available today for simulation optimization are
much better than those available in the late 1970s. Using these newer
algorithms, the SimRunner simulation optimization tool was developed in
1995. Following SimRunner, two other simulation software vendors soon
added an optimization feature to their products. These products are
OptQuest96, which was introduced in 1996 to be used with simulation models
built with Micro Saint software, and WITNESS Optimizer, which was
introduced in 1997 to be used with simulation models built with Witness
software. The optimization module in OptQuest96 is based on scatter search,
which has links to Tabu Search and the popular evolu- tionary algorithm called
the Genetic Algorithm (Glover 1994; Glover et al. 1996). WITNESS Optimizer
is based on a search algorithm called Simulated Annealing (Markt and Mayer
1997). Today most major simulation software packages include an optimization
feature.
SimRunner has an optimization module and a module for determining the
required sample size (replications) and a model’s warm-up period (in the case of
a steady-state analysis). The optimization module can optimize integer and real
decision variables. The design of the optimization module in SimRunner was
influenced by optima-seeking techniques such as Tabu Search (Glover 1990) and
evolutionary algorithms (Fogel 1992; Goldberg 1989; Schwefel 1981), though it
most closely resembles an evolutionary algorithm (SimRunner 1996b).

11.4 Evolutionary Algorithms

Evolutionary algorithms (EAs) are a class of direct search techniques that are
based on concepts from the theory of evolution. They mimic the underlying
evo- lutionary process in that entities adapt to their environment in order to
survive. EAs manipulate a population of solutions to a problem in such a way
that poor solutions fade away and good solutions continually evolve in their
search for the optimum (Bowden and Bullington 1996). Search techniques
based on this concept have proved robust in that they have been successfully
used to solve a wide variety of difficult problems (Biethahn and Nissen
1994; Bowden and Bullington 1995; Usher and Bowden 1996).
Evolutionary algorithms differ from traditional nonlinear optimization tech-
niques in many ways. The most significant difference is that they search the
response surface using a population of solutions as opposed to a single solution.
This allows an EA to collect information about the response surface from many
different points simultaneously. The EA uses the information reported back from
290 Part I Study Chapters

multiple locations on the response surface, as opposed to a single point, to guide

the search for the optimal solution. This population-based approach increases the
chance of finding the global optimal solution (Biethahn and Nissen 1994).
Research has been conducted to demonstrate the convergence characteristics of
EAs and to develop mathematical proofs for global convergence (for example,
see Bäck and Schwefel 1993).
The most popular EAs are genetic algorithms (Goldberg 1989), evolutionary
programming (Fogel 1992), and evolution strategies (Schwefel 1981). Although
these three EAs have some significant differences in the way they implement
ideas from evolution, they share the same basic methodology. Four major algo-
rithmic steps are needed to apply an EA:
Step 1. Generate an initial population of solutions to the problem by
distributing them throughout the solution space.
Step 2. Accurately compute the fitness (response) of each solution.
Step 3. Based on the fitness of the solutions, select the best solutions and
apply idealized-type genetic operators to produce a new generation of
offspring solutions.
Step 4. Return to Step 2 as long as the algorithm is locating improved solutions.

11.4.1 Combining Evolutionary Algorithms with Simulation

The deviations mentioned previously from traditional nonlinear optimization tech-
niques give EAs several advantages for solving simulation optimization problems.
For example, Biethahn and Nissen (1994), Bäck et al. (1995), and Bäck and
Schwefel (1993) report that EAs are very suitable for simulation optimization
because
• They require no restrictive assumptions or prior knowledge about the
topology of the response surface being searched, thereby making them
broadly applicable techniques.
• They are well suited for problems with response surfaces that are highly
dimensional, multimodal, discontinuous, nondifferentiable, and
stochastic, and even for problems with moving response surfaces.
• They are very reliable search techniques and are relatively easy to use.
A potential disadvantage of using EAs for simulation optimization is that
they sometimes require the evaluation of many solutions (calls to the simulation
model). This could be prohibitive if computational time is limited. However,
there are procedures that can be used to reduce the number of times the
simulation model is called. For example, Hall and Bowden (1996) developed a
method that combines an EA with a more locally oriented direct search
technique that results in substantially fewer calls to the simulation model.
Several examples of using EAs for simulation optimization have appeared
in the research literature. Lacksonen and Anussornnitisarn (1995) compared a
genetic algorithm (GA) with three other direct search techniques (Hooke
Jeeves Pattern Search, Nelder Mead Simplex Search, and Simulated
Annealing) on 20 simulation optimization test problems and ranked GA as best.
Stuckman, Evans,
 Chapter 11 Simulation Optimization 291

and Mollaghasemi (1991) suggest that GAs and Simulated Annealing are the
algorithms of choice when dealing with a large number of decision variables.
Tompkins and Azadivar (1995) recommend using GAs when the optimization
prob- lem involves qualitative (logical) decision variables. The authors have
extensively researched the use of genetic algorithms, evolutionary
programming, and evolu- tion strategies for solving manufacturing simulation
optimization problems and simulation-based machine learning problems
(Bowden 1995; Bowden, Neppalli, and Calvert 1995; Bowden, Hall, and Usher
1996; Hall, Bowden, and Usher 1996). Reports have also appeared in the trade
journal literature on how the EA- based optimizer in SimRunner helped to
solve real-world problems. For example, IBM; Sverdrup Facilities, Inc.; and
Baystate Health Systems report benefits from using SimRunner as a decision
support tool (Akbay 1996). The simulation group at Lockheed Martin used
SimRunner to help determine the most efficient lot sizes for parts and when
the parts should be released to the system to meet
schedules (Anonymous 1996).

11.4.2 Illustration of an Evolutionary Algorithm’s

Search of a Response Surface
In this section, we demonstrate how EAs perform when applied to problems that
are characterized by multimodal and stochastic response surfaces that can be
produced by a simulation model’s output. For convenience of presentation, a one-
decision-variable version of a function developed by Ackley (1987) is used to
gain insight on how EAs seek the optimal solution. First Ackley’s function is
trans- formed from a deterministic function to a stochastic function. This is
done in the usual way by adding stochastic perturbations (noise) to the response
generated by Ackley’s function. Figure 11.3 illustrates Ackley’s function when
noise is added to

FIGURE 11.3
Ackley’s function with noise and the ES’s progress over eight generations.
Measured response

20
Ackley's Function
18
16 Generation 1
14 Generation 2
12 Generation 3
10 Generation 4
8
Generation 5
6
4 Generation 6
2 Generation 7
0 Generation 8
-10 -5 0 5 10

Decision variable X
292 Part I Study Chapters

it by sampling from a uniform (−1, 1) distribution. This simulates the variation

that can occur in the output from a stochastic simulation model. The function is
shown with a single decision variable X that takes on real values between −10
and 10. The response surface has a minimum expected value of zero, occurring
when X is equal to zero, and a maximum expected value of 19.37 when X is
equal to −9.54 or
+9.54. Ackley’s function is multimodal and thus has several locally optimal solu-
tions (optima) that occur at each of the low points (assuming a minimization prob-
lem) on the response surface. However, the local optimum that occurs when X is
equal to zero is the global optimum (the lowest possible response). This is a
useful test function because search techniques can prematurely converge and
end their search at one of the many optima before finding the global optimum.
According to Step 1 of the four-step process outlined in Section 11.4, an
initial population of solutions to the problem is generated by distributing them
throughout the solution space. Using a variant of Schwefel’s (1981) Evolution
Strategy (ES) with two parent solutions and 10 offspring solutions, 10 different
values for the de-
cision variable between −10 and 10 are randomly picked to represent an initial
off- spring population of 10 solutions. However, to make the search for the
optimal so-
lution more challenging, the 10 solutions in the initial offspring population are
placed far from the global optimum to see if the algorithm can avoid being
trapped by one of the many local optima. Therefore, the 10 solutions for the first
generation were randomly picked between −10 and −8. So the test is to see if
the population of 10 solutions can evolve from one generation to the next to find
the global opti- mal solution without being trapped by one of the many local
optima.
Figure 11.3 illustrates the progress that the ES made by following the four-
step process from Section 11.4. To avoid complicating the graph, only the
responses for the two best solutions (parents) in each generation are plotted on
the response surface. Clearly, the process of selecting the best solutions and
applying idealized genetic operators allows the algorithm to focus its search
toward the optimal solution from one generation to the next. Although the ES
samples many of the local optima, it quickly identifies the region of the global
optimum and is beginning to hone in on the optimal solution by the eighth
generation. Notice that in the sixth generation, the ES has placed solutions to the
right side of the search space (X > 0) even though it was forced to start its
search at the far left side of the solution space. This ability of an evolutionary
algorithm allows it to conduct a more globally oriented search.
When a search for the optimal solution is conducted in a noisy simulation
environment, care should be taken in measuring the response generated for a
given input (solution) to the model. This means that to get an estimate of the ex-
pected value of the response, multiple observations (replications) of a solution’s
performance should be averaged. But to test the idea that EAs can deal with
noisy response surfaces, the previous search was conducted using only one
observation of a solution’s performance. Therefore, the potential existed for the
algorithm to become confused and prematurely converge to one of the many
local optima because of the noisy response surface. Obviously, this was not the
case with the EA in this example.
 Chapter 11 Simulation Optimization 293

The authors are not advocating that analysts can forget about determining
the number of replications needed to satisfactorily estimate the expected value
of the response. However, to effectively conduct a search for the optimal
solution, an algorithm must be able to deal with noisy response surfaces and
the resulting uncertainties that exist even when several observations
(replications) are used to estimate a solution’s true performance.

11.5 Strategic and Tactical Issues of Simulation Optimization

When optimizing a simulated system for the purpose of applying the solution to
an actual system, the analyst must first ensure that the simulation model accu-
rately mimics the real system. This subject is discussed in Chapter 8.
Additionally, the analyst must determine the appropriate amount of time to
simulate the system, the warm-up period for the model (if applicable), and the
required number of independent observations (model replications). A
detailed treatment of these topics can be found in Chapter 9.
Another issue very relevant to simulation optimization is the efficiency of
the simulation study. Here efficiency is measured in terms of the amount of
time necessary to conduct experiments with the simulation model. In the context
of an optimization project, an experiment is the evaluation of a solution to
estimate its utility. Optimization projects often require the evaluation of many
solutions, and a few seconds saved per experiment can translate into a
significant reduction in time during an optimization project. Therefore, the
amount of time it takes to run the model for one replication (operational
efficiency) and the number of replica- tions required to satisfactorily estimate
the expected value of the model’s response for a given input solution to the
model (statistical efficiency) are important considerations.

11.5.1 Operational Efficiency

When a general-purpose language like C is used to build a simulation model, the
programmer has a great deal of control over how efficiently, or fast, the program
operates. For example, minimizing the number of lines of code in a program is
one way to reduce the time required to execute the program. When using a
simu- lation language or a simulator, the analyst has less control over the
program’s efficiency. However, the analyst still has control over other factors
that affect the time required to run a model such as the level of detail included in
the model, the number of different statistics collected during model execution,
and the use of animation.
A good rule is not to take the approach of including every possible element
of a system in a model, as a way of making sure something important is not left
out of the model. Each element added to the model usually increases the time
required to run the simulation. Therefore, include only those elements of the
system that have a direct bearing on the problem being studied. For these
essential elements,
294 Part I Study Chapters

select the minimum number of statistics necessary to estimate the utility of a

solution. ProModel products allow users to turn off statistical tracking for
locations, entities, resources, and variables that are not needed to estimate the
performance of a solution. If, for example, a model is to estimate an entity’s time
in the system, then only entity-based statistics need be recorded. Also, turning
the animation feature off generally reduces the time to run the model.

11.5.2 Statistical Efficiency

One luxury afforded to model builders is that the variance of a performance
measure computed from the output of simulations can be reduced. This is a
luxury because reducing the variance allows us to estimate the mean value of a
random variable within a desired level of precision and confidence with fewer
replications (indepen- dent observations). The reduction in the required number
of replications is achieved by controlling how random variates are used to
“drive” the events in the simulation model. These time-saving techniques are
called variance reduction techniques.
One popular variance reduction technique called common random
numbers (CRN) was covered in Chapter 10. The CRN technique was invented to
compare different system configurations, or solutions, in the context of
simulation opti- mization. The CRN technique is intuitively appealing because
it provides a means for comparing solutions under more equal experimental
conditions than if CRN were not used. This is helpful in ensuring that the
differences in the performance of two solutions are due to the differences in the
solutions themselves and not to differences in experimental conditions.
Therefore, the use of CRN is generally recommended.

11.5.3 General Optimization Procedure

After a credible and efficient (both operationally and statistically) simulation
model has been built, it is time to begin the optimization project. The general
procedure and rules of thumb for carrying out an optimization project with the
EA-based optimization module in SimRunner follow.

Step 1. The decision variables believed to affect the output of the simulation
model are first programmed into the model as variables whose values can be
quickly changed by the EA. Decision variables are typically the parameters
whose values can be adjusted by management, such as the number of nurses
assigned to a shift or the number of machines to be placed in a work cell.

Step 2. For each decision variable, define its numeric data type (integer or real)
and its lower bound (lowest possible value) and upper bound (highest
possible value). During the search, the EA will generate solutions by varying the
values of decision variables according to their data types, lower bounds, and
upper bounds. The number of decision variables and the range of possible
values affect the size of the search space (number of possible solutions to the
problem). Increasing
Chapter 11 Simulation Optimization 295

the number of decision variables or their range of values increases the size of the
search space, which can make it more difficult and time-consuming to identify
the optimal solution. As a rule, include only those decision variables known to
signif- icantly affect the output of the simulation model and judiciously define
the range of possible values for each decision variable. Also, care should be
taken when defining the lower and upper bounds of the decision variables to
ensure that a combination of values will not be created that lead to a solution
not envisioned when the model was built.

Step 3. After selecting the decision variables, construct the objective function to
measure the utility of the solutions tested by the EA. Actually, the foundation for
the objective function would have already been established when the goals for
the simulation project were set. For example, if the goal of the modeling project
is to find ways to minimize a customer’s waiting time in a bank, then the
objective function should measure an entity’s (customer’s) waiting time in the
bank. The objective function is built using terms taken from the output report
generated at the end of the simulation run. Objective function terms can be
based on entity statistics, location statistics, resource statistics, variable
statistics, and so on. The user specifies whether a term is to be minimized or
maximized as well as the overall weighting of that term in the objective
function. Some terms may be more or less important to the user than other
terms. Remember that as terms are added to the objective function, the
complexity of the search space may increase, which makes a more difficult
optimization problem. From a statistical point of view, single-term objective
functions are also preferable to multiterm objective func- tions. Therefore,
strive to keep the objective function as specific as possible.
The objective function is a random variable, and a set of initial experiments
should be conducted to estimate its variability (standard deviation). Note that
there is a possibility that the objective function’s standard deviation differs
from one solution to the next. Therefore, the required number of replications
necessary to es- timate the expected value of the objective function may change
from one solution to the next. Thus the objective function’s standard deviation
should be measured for several different solutions and the highest standard
deviation recorded used to compute the number of replications necessary to
estimate the expected value of the objective function. When selecting the set of
test solutions, choose solutions that are very different from one another. For
example, form solutions by setting the decision variables to their lower bounds,
middle values, or upper bounds.
A better approach for controlling the number of replications used to
estimate the expected value of the objective function for a given solution would
be to incor- porate a rule into the model that schedules additional replications
until the estimate reaches a desired level of precision (confidence interval half-
width). Using this technique can help to avoid running too many replications for
some solutions and too few replications for others.

Step 4. Select the size of the EA’s population (number of solutions) and begin
the search. The size of the population of solutions used to conduct the search
296 Part I Study Chapters

affects both the likelihood that the algorithm will locate the optimal solution and
the time required to conduct the search. In general, as the population size is
increased, the algorithm finds better solutions. However, increasing the popula-
tion size generally increases the time required to conduct the search. Therefore,
a balance must be struck between finding the optimum and the amount of
available time to conduct the search.

Step 5. After the EA’s search has concluded (or halted due to time constraints),
the analyst should study the solutions found by the algorithm. In addition to the
best solution discovered, the algorithm usually finds many other competitive
solutions. A good practice is to rank each solution evaluated based on its utility
as measured by the objective function. Next, select the most highly
competitive solutions and, if necessary, make additional model replications of
those solutions to get better estimates of their true utility. And, if necessary,
refer to Chapter 10 for background on statistical techniques that can help you
make a final decision between competing solutions. Also, keep in mind that the
database of solutions evaluated by the EA represents a rich source of
information about the behavior, or response surface, of the simulation model.
Sorting and graphing the solutions can help you interpret the “meaning” of the
data and gain a better understanding of how the system behaves.

If the general procedure presented is followed, chances are that a good

course of action will be identified. This general procedure is easily carried
out using ProModel simulation products. Analysts can use SimRunner to help
• Determine the length of time and warm-up period (if applicable) for
running a model.
• Determine the required number of replications for obtaining estimates
with a specified level of precision and confidence.
• Search for the optimal values for the important decision variables.
Even though it is easy to use SimRunner and other modern optimizers, do
not fall into the trap of letting them become the decision maker. Study the top
solutions found by the optimizers as you might study the performance records of
different cars for a possible purchase. Kick their tires, look under their hoods,
and drive them around the block before buying. Always remember that the
optimizer is not the decision maker. It only suggest a possible course of
action. It is the user’s responsibility to make the final decision.

11.6 Formulating an Example Optimization Problem

The optimal allocation of buffer storage between workstations is a common
indus- trial problem and has been extensively studied by academic researchers.
If a pro- duction line consists of a network of tightly linked workstations, an
inventory of parts (work in progress) between workstations can be used to
minimize the chance
 Chapter 11 Simulation Optimization 297

that disruptions (machine failures, line imbalances, quality problems, or the like)
will shut down the production line. Several strategies have been developed for
determining the amount of buffer storage needed between workstations.
However, these strategies are often developed based on simplifying
assumptions, made for mathematical convenience, that rarely hold true for real
production systems.
One way to avoid oversimplifying a problem for the sake of mathematical
convenience is to build a simulation model of the production system and use it
to help identify the amount of buffer storage space needed between
workstations. However, the number of possible solutions to the buffer allocation
problem grows rapidly as the size of the production system (number of
possible buffer storage areas and their possible sizes) increases, making it
impractical to evaluate all so- lutions. In such cases, it is helpful to use
simulation optimization software like SimRunner to identify a set of candidate
solutions.
This example is loosely based on the example production system
presented in Chapter 10. It gives readers insight into how to formulate
simulation optimiza- tion problems when using SimRunner. The example is not
fully solved. Its com- pletion is left as an exercise in Lab Chapter 11.

11.6.1 Problem Description

The production system consists of four machines and three buffers. Parts
entering the system require processing by each of the four machines in a
serial fashion (Figure 11.4). A part is always available for processing at the first
machine. After a part is processed, it moves from the machine to the buffer
storage area for the

FIGURE 11.4
Production system
with four
workstations and
three buffer storage
areas.

.72 4.56
298 Part I Study Chapters

next machine, where it waits to be processed. However, if the buffer is full, the
part cannot move forward and remains on the machine until a space becomes
available in the buffer. Furthermore, the machine is blocked and no other parts
can move to the machine for processing. The part exits the system after being
processed by the fourth machine. Note that parts are selected from the buffers to
be processed by a machine in a first-in, first-out order. The processing time at
each machine is exponentially distributed with a mean of 1.0 minute, 1.3
minutes,
0.7 minute, and 1.0 minute for machines one, two, three, and four, respectively.
The time to move parts from one location to the next is negligible.
For this problem, three decision variables describe how buffer space is allo-
cated (one decision variable for each buffer to signify the number of parts that
can be stored in the buffer). The Goal is to find the optimal value for each
decision variable to maximize the profit made from the sale of the parts. The
manufacturer collects $10 per part produced. The limitation is that each unit of
space provided for a part in a buffer costs $1,000. So the buffer storage has to
be strategically allocated to maximize the throughput of the system. Throughput
will be measured as the number of parts completed during a 30-day period.

11.6.2 Demonstration of the General Optimization Procedure

The general optimization procedure outlined in Section 11.5.3 will be used to
guide the formulation of the problem as a SimRunner simulation optimization
project. The assumption is that a credible and efficient simulation model has
been built of the production system.

Step 1. In this step, the decision variables for the problem are identified and
defined. Three decision variables are needed to represent the number of parts
that can be stored in each buffer (buffer capacity). Let Q1, Q2, and Q3
represent the number of parts that can be stored in buffers 1, 2, and 3,
respectively.

Step 2. The numeric data type for each Qi is integer. If it is assumed that each
buffer will hold a minimum of one part, then the lower bound for each Qi is 1.
The upper bound for each decision variable could arbitrarily be set to, say, 20.
How- ever, keep in mind that as the range of values for a decision variable is
increased, the size of the search space also increases and will likely increase
the time to conduct the search. Therefore, this is a good place to apply
existing knowledge about the performance and design of the system.
For example, physical constraints may limit the maximum capacity of each
buffer to no greater than 15 parts. If so, there is no need to conduct a search with
a range of values that produce infeasible solutions (buffer capacities greater than
15 parts). Considering that the fourth machine’s processing time is larger than
the third machine’s processing time, parts will tend to queue up at the third
buffer. Therefore, it might be a good idea to set the upper bound for Q3 to a
larger value than the other two decision variables. However, be careful not to
assume too much
Chapter 11 Simulation Optimization 299

because it could prevent the optimization algorithm from exploring regions in

the search space that may contain good solutions.
With this information, it is decided to set the upper bound for the capacity
of each buffer to 15 parts. Therefore, the bounds for each decision variable are
1 ≤ Q1 ≤ 15 1 ≤ Q2 ≤ 15 1 ≤ Q3 ≤ 15
Given that each of the three decision variable has 15 different values, there are
153, or 3,375, unique solutions to the problem.

Step 3. Here the objective function is formulized. The model was built to inves-
tigate buffer allocation strategies to maximize the throughput of the system.
Given that the manufacturer collects $10 per part produced and that each unit of
space provided for a part in a buffer costs $1,000, the objective function for the
optimization could be stated as
Maximize [$10(Throughput) − $1,000(Q1 + Q2 + Q3)]
where Throughput is the total number of parts produced during a 30-day
period.
Next, initial experiments are conducted to estimate the variability of the
objective function in order to determine the number of replications the EA-based
optimization algorithm will use to estimate the expected value of the objective
function for each solution it evaluates. While doing this, it was also noticed that
the throughput level increased very little for buffer capacities beyond a value of
nine. Therefore, it was decided to change the upper bound for each decision
vari- able to nine. This resulted in a search space of 93, or 729, unique
solutions, a reduction of 2,646 solutions from the original formulation. This will
likely reduce the search time.

Step 4. Select the size of the population that the EA-based optimization algorithm
will use to conduct its search. SimRunner allows the user to select an optimization
profile that influences the degree of thoroughness used to search for the optimal
solution. The three optimization profiles are aggressive, moderate, and cautious,
which correspond to EA population sizes of small, medium, and large. The
aggres- sive profile generally results in a quick search for locally optimal
solutions and is used when computer time is limited. The cautious profile
specifies that a more thorough search for the global optimum be conducted and
is used when computer time is plentiful. At this point, the analyst knows the
amount of time required to evaluate a solution. Only one more piece of
information is needed to determine how long it will take the algorithm to
conduct its search. That is the fraction of the 729 solutions the algorithm will
evaluate before converging to a final solution. Unfortunately, there is no way of
knowing this in advance. With time running out before a recommendation for
the system must be given to management, the ana- lyst elects to use a small
population size by selecting SimRunner’s aggressive op- timization profile.
300 Part I Study Chapters

Step 5. After the search concludes, the analyst selects for further evaluation
some of the top solutions found by the optimization algorithm. Note that this
does not necessarily mean that only those solutions with the best objective
function values are chosen, because the analyst should conduct both a
quantitative and a qualitative analysis. On the quantitative side, statistical
procedures presented in Chapter 10 are used to gain a better understanding of
the relative differences in performance between the candidate solutions. On
the qualitative side, one solution may be preferred over another based on
factors such as ease of implementation.

Figure 11.5 illustrates the results from a SimRunner optimization of the

buffer allocation problem using an aggressive optimization profile. The warm-
up time for the simulation was set to 10 days, with each day representing a 24-
hour production period. After the warm-up time of 10 days (240 hours), the
system is simulated for an additional 30 days (720 hours) to determine
throughput. The estimate for the ex- pected value of the objective function was
based on five replications of the simula- tion. The smoother line that is always at
the top of the Performance Measures Plot in Figure 11.5 represents the value of
the objective function for the best solution identified by SimRunner during the
optimization. Notice the rapid improvement in the value of the objective
function during the early part of the search as SimRunner identifies better buffer
capacities. The other, more irregular line represents the value of the objective
function for all the solutions that SimRunner tried.
SimRunner’s best solution to the problem specifies a Buffer 1 capacity of
nine, a Buffer 2 capacity of seven, and a Buffer 3 capacity of three and was the
33rd solution (experiment) evaluated by SimRunner. The best solution is located
at the top of the table in Figure 11.5. SimRunner sorts the solutions in the table

FIGURE 11.5
SimRunner results for
the buffer allocation
problem.
 Chapter 11 Simulation Optimization 301

from best to worst. SimRunner evaluated 82 out of the possible 729 solutions.
Note that there is no guarantee that SimRunner’s best solution is in fact the opti-
mum solution to the problem. However, it is likely to be one of the better
solutions to the problem and could be the optimum one.
The last two columns in the SimRunner table shown in Figure 11.5 display
the lower and upper bounds of a 95 percent confidence interval for each solution
evaluated. Notice that there is significant overlap between the confidence inter-
vals. Although this is not a formal hypothesis-testing procedure, the overlapping
confidence intervals suggest the possibility that there is not a significant differ-
ence in the performance of the top solutions displayed in the table. Therefore, it
would be wise to run additional replications of the favorite solutions from the
list and/or use one of the hypothesis-testing procedures in Chapter 10 before
selecting a particular solution as the best. The real value here is that SimRunner
automati- cally conducted the search, without the analyst having to hover over
it, and re- ported back several good solutions to the problem for the analyst to
consider.

11.7 Real-World Simulation Optimization Project

In this section, we provide an account of how simulation combined with
opti- mization was used to solve a kanban sizing problem. The objective for this
prob- lem is to find the minimum amount of inventory required to support
production in a just-in-time (JIT) environment where parts are pulled through
the system using kanban cards. This presentation is based on a problem faced by
a major appliance factory in the United States. Two different techniques are used
to solve the prob- lem. One approach uses a technique developed by Toyota.
The other approach uses an EA-based simulation optimization algorithm
similar to the one used in SimRunner. The presentation concludes with a
comparative analysis of the two solutions generated by these techniques.

11.7.1 Problem Description

A kanban is a card that authorizes a workstation to begin producing a part.
Kanban cards are passed from downstream workstations to upstream worksta-
tions, signaling the upstream workstation to begin producing a part. This results
in parts being pulled through the system as downstream workstations issue
kanban cards to upstream workstations.
In a pull production system, the number of kanban cards directly influences
the number of material-handling containers required for transporting (pulling)
parts through the system and thus the maximum amount of work-in-progress
(WIP) inventory. Trigger values represent the number of kanban cards that must
accumu- late before a workstation is authorized to begin production.
Therefore, trigger values control the frequency of machine setups. While the
ideal minimum trigger value equals 1, many processes do not allow for this due
to the time required for machine setup or maintenance. Solving for the optimal
number of kanban cards and corresponding trigger values presents a difficult task
for production planners.
302 Part I Study Chapters

FIGURE 11.6
The two-stage Trigger = Trigger =
pull production Customer
1 2
Assembly line Raw
system. demand

Stage Stage materials

One Stage One Two Stage Two
WIP process WIP line
Assembly line

Kanban posts
Component
Final product
Kanban card
Subassembly

Figure 11.6 illustrates the relationship of the processes in the two-stage pull
production system of interest that produces several different types of parts.
Customer demand for the final product causes containers of subassemblies to be
pulled from the Stage One WIP location to the assembly lines. As each container
is withdrawn from the Stage One WIP location, a production-ordering kanban
card representing the number of subassemblies in a container is sent to the
kanban post for the Stage One processing system. When the number of kanban
cards for a given subassembly meets its trigger value, the necessary component
parts are pulled from the Stage Two WIP to create the subassemblies. Upon
completing the Stage One process, subassemblies are loaded into containers, the
corresponding kanban card is attached to the container, and both are sent to
Stage One WIP. The container and card remain in the Stage One WIP location
until pulled to an assembly line.
In Stage Two, workers process raw materials to fill the Stage Two WIP
location as component parts are pulled from it by Stage One. As component
parts are withdrawn from the Stage Two WIP location and placed into the
Stage One process, a production-ordering kanban card representing the
quantity of compo- nent parts in a container is sent to the kanban post for the
Stage Two line. When the number of kanban cards for a given component part
meets a trigger value, production orders equal to the trigger value are issued to
the Stage Two line. As workers move completed orders of component parts
from the Stage Two line to WIP, the corresponding kanban cards follow the
component parts to the Stage Two WIP location.
While an overall reduction in WIP is sought, production planners desire a
so- lution (kanban cards and trigger values for each stage) that gives
preference to minimizing the containers in the Stage One WIP location. This
requirement is due to space limitations.

11.7.2 Simulation Model and Performance Measure

Without sacrificing the presentation of the simulation optimization subject, only
a sketch of the model is given. The pull production system was represented in a
Chapter 11 Simulation Optimization 303

discrete-event simulation model. The model assumes constant interarrival times

for customer orders to the assembly lines. However, workers at the assembly
lines may find defects in the subassemblies, which increases subassembly
demand above that needed for scheduled customer demand. The number of de-
fective subassemblies found on the assembly lines follows a stochastic function.
Production times for the Stage One process and Stage Two line are constant
because they are automated processes. Setup time, time between failures, and
time to repair for the Stage Two line are triangularly distributed. Each simulation
run consists of a 10-day (two-week) warm-up period followed by a 20-day (one-
month) steady-state period.
The performance measure to be maximized is
f (a) = W1(AvgPct + MinPct) − W2(TK1) − W3(TK2)
where AvgPct is the average throughput percentage (percentage of demand satis-
fied) for all product types coming off the assembly lines; MinPct is the minimum
throughput percentage for all product types coming off the assembly lines; TK1
is the total number of kanban cards in Stage One; TK2 is the total number of
kanban cards in Stage Two; and W1, W2, and W3 are coefficients that reflect the
level of im- portance (weighting) assigned to each term by production planners.
The weighting levels assigned to W1, W2, and W3 are 20.0, 0.025, and 0.015,
respectively. Using this performance function, the objective is to find a solution
that will maximize throughput while minimizing the total number of kanban
cards in the system.
The production planners decided to fix the trigger values in the Stage One
process to 1; therefore, the optimal number of kanban cards in the Stage One
process and the optimal number of kanban cards and corresponding trigger values
in the Stage Two line for each of the 11 different part types being produced need
to be determined. Thus the problem contains 33 integer decision variables.
Each solution is a vector a = (K1 1, K12, K1 3 , ... , K111; K 21, K 22, K
23 , . . . , K211; T21, T22, T2 3 , . . . , T211) where K1i represents the number
of kanban cards for part type i circulating in the Stage One process, K2i
represents the number of kanban cards for part type i circulating in the Stage Two
line, and T2i represents the
corresponding trigger quantities for part type i used in the Stage Two line.
Consid- ering the range of possible values for each of the decision variables
(omitted for brevity), there are 4.81 × 1041 unique solutions to this problem.

11.7.3 Toyota Solution Technique

Because of their ease of use, the kanban sizing equations developed by Toyota
are often used by manufacturers to estimate the number of kanban cards needed.
For this problem, the constant-quantity, nonconstant-cycle withdrawal system
as described by Monden (1993) was used. The number of kanbans required is
determined by
1 l 1 l
Monthly demand Daily Safety
Monthly setups + demand × coefficient
Kanbans =
Container capacity
304 Part I Study Chapters

where the safety coefficient represents the amount of WIP needed in the system.
Production planners assumed a safety coefficient that resulted in one day of WIP
for each part type. Additionally, they decided to use one setup per day for each
part type. Although this equation provides an estimate of the minimum number
of kanban cards, it does not address trigger values. Therefore, trigger values for
the Stage Two line were set at the expected number of containers consumed for
each part type in one day. The Toyota equation recommended using a total
of 243 kanban cards. The details of the calculation are omitted for brevity.
When evalu- ated in the simulation model, this solution yielded a performance
score of 35.140 (using the performance function defined in Section 11.7.2)
based on four inde- pendent simulation runs (replications).

11.7.4 Simulation Optimization Technique

Here an EA-based optimization module like the one in SimRunner is used to
search for an optimal solution to the problem. Given that it is not practical to
as- sume that there is an unlimited amount of time for conducting a search, the
soft- ware allows the user to select an optimization profile that influences the
degree of thoroughness used to search for the optimal solution. The three
optimization pro- files are aggressive, moderate, and cautious, which
correspond to EA population sizes of small, medium, and large. The
aggressive profile generally results in a quick search and is used when
computer time is limited. The cautious profile specifies that a more thorough
search be conducted. The moderate profile was used to search for an optimal
number of kanban cards and trigger values.
Each time the simulation model is called to evaluate a solution, the model
runs four replications to get four independent observations of a solution’s
performance. The performance of a solution is computed at the end of each
simulation run using the performance function defined in Section 11.7.2. The
final performance score assigned to each solution is the average of the four
independent observations.
Figure 11.7 illustrates the progress of the optimization module’s search. Be-
cause it is difficult to visualize a response surface with 33 dimension variables,
only the performance score of the best solution found per generation is plotted.
The points are connected with a line to highlight the rate at which the algorithm
finds solutions with improved performance scores. Note that the optimization
module quickly finds solutions that are better (based on the four independent
observations) than the solution found using the Toyota technique, and the opti-
mization module steadily finds better solutions after that point. The search was
halted at 150 generations because the solution was not improving significantly.
The solution recommended using a total of 110 kanban cards and yielded a
performance score of 37.945 based on four replications.

11.7.5 Comparison of Results

Final solutions generated by the optimization module and Toyota equation were
run in the simulation model for 20 independent replications to get a better
estimate of the true mean performance of the solutions. Table 11.1 presents a
 Chapter 11 Simulation Optimization 305

Measured response
FIGURE 11.7 39 Optimization module
After the second Toyota
generation, the 38
solutions found by
the optimization 37
module are better
than the solutions 36
generated using the
Toyota method.
35

34

33
0 50 100 150
Generation

TABLE 11.1 The Optimization Module’s Solution Meets Production

Throughput Goals with 54 Percent Fewer Kanban Cards
Than Toyota

Technique Kanban Cards Performance Scores

Optimization module 110 37.922

Toyota solution 243 35.115

comparison of the solutions. Both solutions achieved the required throughput

using a substantially different number of kanban cards.
An application of Fisher’s LSD statistical multiple comparison test
presented in Chapter 10 suggests that the performance scores for the methods in
Table 11.1 are different at a 0.05 level of significance. Results indicate that the
optimization module produced a significantly better solution to the kanban
sizing problem than did the production planners using the Toyota technique.
The solution that the optimization module found requires approximately 54
percent fewer kanban cards (54 percent less WIP) than the solution generated
using the Toyota technique—a considerable reduction in inventory carrying
costs.
Considering the time required to run the simulation model on a personal
computer with a P5-100 processor and the fact that there are 4.81 × 1041
unique solutions to the problem, it would take approximately 1.15 × 1038 days
to evalu- ate all solutions to the problem. Obviously, this is not a practical
alternative. The
optimization module required only 24 hours (one day) to complete its search.
It evaluated only a small fraction of the total number of solutions and
provided a much better starting point than the Toyota solution for making the
final decision regarding the actual pull production system, a noteworthy
contribution to the decision-making process whether or not the solution found
is the global optimum.
306 Part I Study Chapters

11.8 Summary
In recent years, major advances have been made in the development of user-
friendly simulation software packages. However, progress in developing sim-
ulation output analysis tools has been especially slow in the area of simulation
optimization because conducting simulation optimization with traditional tech-
niques has been as much an art as a science (Greenwood, Rees, and Crouch
1993). There are such an overwhelming number of traditional techniques that
only indi- viduals with extensive backgrounds in statistics and optimization
theory have realized the benefits of integrating simulation and optimization
concepts. Using newer optimization techniques, it is now possible to narrow
the gap with user- friendly, yet powerful, tools that allow analysts to combine
simulation and optimization for improved decision support. SimRunner is one
such tool.
Our purpose is not to argue that evolutionary algorithms are the panacea
for solving simulation optimization problems. Rather, our purpose is to introduce
the reader to evolutionary algorithms by illustrating how they work and how to
use them for simulation optimization and to expose the reader to the wealth of
literature that demonstrates that evolutionary algorithms are a viable choice for
reliable optimization.
There will always be debate on what are the best techniques to use for simu-
lation optimization. Debate is welcome as it results in better understanding of
the real issues and leads to the development of better solution procedures. It
must be remembered, however, that the practical issue is not that the
optimization tech- nique guarantees that it locates the optimal solution in the
shortest amount of time for all possible problems that it may encounter; rather,
it is that the optimization technique consistently finds good solutions to
problems that are better than the solutions analysts are finding on their own.
Newer techniques such as evolution- ary algorithms and scatter search meet this
requirement because they have proved robust in their ability to solve a wide
variety of problems, and their ease of use makes them a practical choice for
simulation optimization today (Boesel et al. 2001; Brady and Bowden 2001).

11.9 Review Questions

1. What is a response surface?
2. What does it mean if an optimization algorithm is classified as a heuristic
technique?
3. What is the most significant difference between the way evolutionary
algorithms (EAs) search a response surface and the way many traditional
nonlinear optimization algorithms conduct a search? What advantage
does this difference give to an EA over many traditional nonlinear
optimization algorithms?
4. Assume you are working on a project with five decision variables (A, B,
C, D, E). Each decision variable’s numeric data type is integer with the
 Chapter 11 Simulation Optimization 307

following values: 1, 2, 3, 4, 5, 6. How many different solutions can be

generated from these five decision variables? If it takes one minute of
computer time to evaluate a solution (run the simulation model for the
required number of replications), how many hours would it take to
evaluate all solutions?
5. Define operational and statistical efficiency in the context of simulation
optimization.

Reference
s
Ackley, D. A Connectionist Machine for Genetic Hill Climbing. Boston, MA: Kluwer,
1987. Akbay, K. “Using Simulation Optimization to Find the Best Solution.” IIE
Solutions, May
1996, pp. 24–29.
Anonymous, “Lockheed Martin.” IIE Solutions, December, 1996, pp. SS48–SS49.
Azadivar, F. “A Tutorial on Simulation Optimization.” 1992 Winter Simulation Confer-
ence. Arlington Virginia, ed. Swain, J., D. Goldsman, R. Crain and J. Wilson. Institute
of Electrical and Electronics Engineers, Piscataway, NJ: 1992, pp. 198–204.
Bäck, T.; T. Beielstein; B. Naujoks; and J. Heistermann. “Evolutionary Algorithms for
the Optimization of Simulation Models Using PVM.” Euro PVM 1995—
Second European PVM 1995, User’s Group Meeting. Hermes, Paris, ed.
Dongarra, J., M. Gengler, B. Tourancheau and X. Vigouroux, 1995, pp. 277–282.
Bäck, T., and H.-P. Schwefel. “An Overview of Evolutionary Algorithms for Parameter
Optimization.” Evolutionary Computation 1, no. 1 (1993), pp. 1–23.
Barton, R., and J. Ivey. “Nelder-Mead Simplex Modifications for Simulation
Optimization.”
Management Science 42, no. 7 (1996), pp. 954–73.
Biethahn, J., and V. Nissen. “Combinations of Simulation and Evolutionary Algorithms in
Management Science and Economics.” Annals of Operations Research 52 (1994),
pp. 183–208.
Boesel, J.; Bowden, R. O.; Glover, F.; and J. P. Kelly. “Future of Simulation Optimization.”
Proceedings of the 2001 Winter Simulation Conference, 2001, pp. 1466–69.
Bowden, R. O. “Genetic Algorithm Based Machine Learning Applied to the Dynamic
Routing of Discrete Parts.” Ph.D. Dissertation, Department of Industrial
Engineering, Mississippi State University, 1992.
Bowden, R. “The Evolution of Manufacturing Control Knowledge Using Reinforcement
Learning.” 1995 Annual International Conference on Industry, Engineering, and
Management Systems, Cocoa Beach, FL, ed. G. Lee. 1995, pp. 410–15.
Bowden, R., and S. Bullington. “An Evolutionary Algorithm for Discovering
Manufactur- ing Control Strategies.” In Evolutionary Algorithms in Management
Applications, ed. Biethahn, J. and V. Nissen. Berlin: Springer, 1995, pp. 124–38.
Bowden, R., and S. Bullington. “Development of Manufacturing Control Strategies
Using Unsupervised Learning.” IIE Transactions 28 (1996), pp. 319–31.
Bowden, R.; J. Hall; and J. Usher. “Integration of Evolutionary Programming and Simula-
tion to Optimize a Pull Production System.” Computers and Industrial
Engineering 31, no. 1/2 (1996), pp. 217–20.
Bowden, R.; R. Neppalli; and A. Calvert. “A Robust Method for Determining Good
Com- binations of Queue Priority Rules.” Fourth International Industrial
Engineering Re- search Conference, Nashville, TN, ed. Schmeiser, B. and R.
Uzsoy. Norcross, GA: IIE, 1995, pp. 874–80.
308 Part I Study Chapters

Brady, T. F., and R. O. Bowden. “The Effectiveness of Generic Optimization Modules in

Computer Simulation Languages.” Proceedings of the Tenth Annual Industrial Engi-
neering Research Conference, CD-ROM, 2001.
Fogel, D. “Evolving Artificial Intelligence.” Ph.D. Thesis, University of California, 1992.
Glover, F. “Tabu Search: A Tutorial.” Interfaces, 20, no. 4 (1990), pp. 41–52.
Glover, F. “Genetic Algorithms and Scatter Search: Unsuspected Potential,” Statistics and
Computing 4 (1994), pp. 131–40.
Glover, F.; P. Kelly, and M. Laguna. “New Advances and Applications of Combining
Sim- ulation and Optimization.” 1996 Winter Simulation Conference, Coronado,
CA: ed. Charnes, J., Morrice, D., Brunner, D., and J. Swain. Piscataway, NJ:
Institute of Electrical and Electronics Engineers, 1996, pp. 144–52.
Goldberg, D. Genetic Algorithms in Search, Optimization, and Machine Learning.
Reading, MA: Addison Wesley, 1989.
Greenwood, A.; L. Rees; and I. Crouch. “Separating the Art and Science of Simulation
Optimization: A Knowledge-Based Architecture Providing for Machine Learning.”
IIE Transactions 25, no. 6 (1993), pp. 70–83.
Hall, J., and R. Bowden. “Simulation Optimization for a Manufacturing Problem.”
Proceedings of the Southeastern Simulation Conference, Huntsville, AL, ed. J.
Gauthier. San Diego, CA: The Society for Computer Simulation, 1996, pp. 135–40.
Hall, J.; R. Bowden; and J. Usher. “Using Evolution Strategies and Simulation to
Optimize a Pull Production System.” Journal of Materials Processing Technology
61 (1996), pp. 47–52.
Hooke, R., and T. Jeeves. “Direct Search Solution of Numerical Statistical Problems.”
Journal of the Association of Computer Machines 8 (1961), pp. 212–29.
Jacobson, S., and L. Schruben. “Techniques for Simulation Response Optimization.”
Operations Research Letters 8 (1989), pp. 1–9.
Lacksonen, T., and P. Anussornnitisarn. “Empirical Comparison of Discrete Event
Simula- tion Optimization Techniques.” Proceedings of the Summer Computer
Simulation Conference, Ottawa, Canada. San Diego, CA: The Society for Computer
Simulation, 1995, pp. 69–101.
Law, A., and W. Kelton. Simulation Modeling and Analysis. New York: McGraw-Hill,
2000. Markt, P., and M. Mayer. “Witness Simulation Software: A Flexible Suite of
Simulation Tools.” 1997 Winter Simulation Conference, Atlanta, GA, ed.
Andradóttir, S.,
K. Healy, D. Withers and B. Nelson. Piscataway, NJ: Institute of Electrical and Elec-
tronics Engineers, 1997, pp. 127–33.
Monden, Y. Toyota Production System. Norcross, GA: IIE, 1993.
Nelder, J., and R. Mead. “A Simplex Method for Function Minimization.” Computer
Journal 7 (1965), pp. 308–13.
OptQuest 96 Information Sheet. Boulder, CO: Micro Analysis and Design, Inc., 1996.
Pegden, D., and M. Gately. “Decision Optimization for GASP IV Simulation Models.”
1977 Winter Simulation Conference, Gaitherburg, MD, ed. Highland, H. R. Sargent
and J. Schmidt. Piscataway, NJ: Institute of Electrical and Electronics Engineers,
1977, pp. 127–33.
Pegden, D., and M. Gately. “A Decision-Optimization Module for SLAM.” Simulation
34 (1980), pp. 18–25.
Safizadeh, M. “Optimization in Simulation: Current Issues and the Future Outlook.”
Naval Research Logistics 37 (1990), pp. 807–25.
Schwefel, H.-P. Numerical Optimization of Computer Models. Chichester: John Wiley &
Sons, 1981.
Chapter 11 Simulation Optimization 309

SimRunner Online Software Help. Ypsilanti, MI: Decision Science, Inc., 1996b.
SimRunner User’s Guide ProModel Edition. Ypsilanti, MI: Decision Science, Inc., 1996a.
Stuckman, B.; G. Evans; and M. Mollaghasemi. “Comparison of Global Search Methods
for Design Optimization Using Simulation.” 1991 Winter Simulation Conference,
Phoenix, AZ, ed. Nelson, B., W. Kelton and G. Clark. Piscataway, NJ: Institute of
Electrical and Electronics Engineers, 1991, pp. 937–44.
Tompkins, G., and F. Azadivar. “Genetic Algorithms in Optimizing Simulated Systems.”
1991 Winter Simulation Conference, Arlington, VA, ed. Alexopoulos, C., K. Kang,
W. Lilegdon, and D. Goldsman. Piscataway, NJ: Institute of Electrical and Electron-
ics Engineers, 1995, pp. 757–62.
Usher, J., and R. Bowden. “The Application of Genetic Algorithms to Operation
Sequenc- ing for Use in Computer-Aided Process Planning.” Computers and
Industrial Engi- neering Journal 30, no. 4 (1996), pp. 999–1013.
Harrell−Ghosh−Bo I. Study 12. Modeling © The
wden: Simulation Chapters Manufacturing McGraw−Hill
Using ProModel, Systems Companies,
Second Edition

C H A P T E R

12 MODELING
MANUFACTURING
SYSTEMS

“We no longer have the luxury of time to tune and debug new manufacturing
systems on the floor, since the expected economic life of a new system, before
major revision will be required, has become frighteningly short.”
—Conway and Maxwell

12.1 Introduction
In Chapter 7 we discussed general procedures for modeling the basic operation
of manufacturing and service systems. In this chapter we discuss design and
operat- ing issues that are more specific to manufacturing systems. Different
applications of simulation in manufacturing are presented together with how
specific manu- facturing issues are addressed in a simulation model. Most
manufacturing systems have material handling systems that, in some
instances, have a major impact on overall system performance. We touch on a
few general issues related to material handling systems in this chapter; however,
a more thorough treatment of material handling systems is given in Chapter 13.
Manufacturing systems are processing systems in which raw materials are
transformed into finished products through a series of operations performed at
workstations. In the rush to get new manufacturing systems on line, engineers
and planners often become overly preoccupied with the processes and methods
with- out fully considering the overall coordination of system components.
Many layout and improvement decisions in manufacturing are left to chance
or are driven by the latest management fad with little knowledge of how much
im- provement will result or whether a decision will result in any improvement
at all. For example, work-in-process (WIP) reduction that is espoused by just-
in-time (JIT) often disrupts operations because it merely uncovers the rocks
(variability, long setups, or the like) hidden beneath the inventory water level
that necessitated the WIP in the first place. To accurately predict the effect of
lowering WIP levels

311
312 Part I Study Chapters

requires sonar capability. Ideally you would like to identify and remove produc-
tion rocks before arbitrarily lowering inventory levels and exposing production
to these hidden problems. “Unfortunately,” note Hopp and Spearman (2001),
“JIT, as described in the American literature, offers neither sonar (models that
predict the effects of system changes) nor a sense of the relative economics
of level reduction versus rock removal.”
Another popular management technique is the theory of constraints. In this
approach, a constraint or bottleneck is identified and a best-guess solution is
implemented, aimed at either eliminating that particular constraint or at least
mit- igating the effects of the constraint. The implemented solution is then
evaluated and, if the impact was underestimated, another solution is attempted.
As one man- ufacturing manager expressed, “Contraint-based management
can’t quantify investment justification or develop a remedial action plan”
(Berdine 1993). It is merely a trial-and-error technique in which a best-guess
solution is implemented with the hope that enough improvement is realized to
justify the cost of the solu- tion. Even Deming’s plan–do–check–act (PDCA)
cycle of process improvement implicitly prescribes checking performance after
implementation. What the PDCA cycle lacks is an evaluation step to test or
simulate the plan before it is implemented. While eventually leading to a
better solution, this trial-and-error approach ends up being costly, time-
consuming, and disruptive to implement.
In this chapter we address the following topics:
• What are the special characteristics of manufacturing systems?
• What terminology is used to describe manufacturing operations?
• How is simulation applied to manufacturing systems?
• What techniques are used to model manufacturing systems?

12.2 Characteristics of Manufacturing Systems

Manufacturing systems represent a class of processing systems in which
entities (raw materials, components, subassemblies, pallet or container loads,
and so on) are routed through a series of workstations, queues, and storage
areas. As opposed to service systems where the entities are usually human,
entities in manufacturing systems are inanimate objects that have a more
controlled entry and routing se- quence. Entity production is frequently
performed according to schedules to fill predefined quotas. In other instances,
production is triggered by low finished goods inventories (make-to-stock
production) or by customer orders (make/ assemble-to-order production).
Manufacturing systems utilize varying degrees of mechanization and
automation for entity processing and material movement. In the most highly
automated facilities, there may be very little, if any, human involvement to
be considered in the simulation study. These characteristics have the following
implications for modeling manufacturing systems:
• Operation times often have little, if any, variability.
• Entity arrivals frequently occur at set times or conditions.
 Chapter 12 Modeling Manufacturing Systems 313

• Routing sequences are usually fixed from the start.

• Entities are often processed in batches.
• Equipment reliability is frequently a key factor.
• Material handling can significantly impact entity flow.
• We are usually interested in the steady-state behavior of the system.
Of course, actual modeling considerations will vary depending on the type of
system being modeled and the purpose of the simulation.

12.3 Manufacturing Terminology

Manufacturing systems share many common elements and issues. They also
share a vernacular that can seem foreign to those unfamiliar with manufacturing
activi- ties. Understanding how to model manufacturing systems requires a
knowledge of the terminology that is used in manufacturing industries. Here are
some of the terms that are useful to know when simulating manufacturing
systems:
Operation—An operation is the activity performed on a product at a work-
station. Operations are usually performed to produce some physical change
to a part such as machining or molding. Assembly operations combine
component parts. Nontransformational operations such as inspection or
testing are also frequently performed.
Workstation—A workstation or work center is the place or location where
an operation is performed. A workstation consists of one or more
machines and/or personnel.
NC machine—An NC (numerically controlled) machine is a machine
tool whose spindle and table action are automatically controlled by a
computer.
Machining center—A machining center is essentially an NC machine with
a tool exchanger that provides greater capability than a stand-alone NC
machine. Machining centers have been defined as “multifunctional,
numerically controlled machine tools with automatic tool changing
capabilities and rotating cutting tools that permit the programmed,
automated production of a wide variety of parts” (Wick 1987).
Master production schedule—The master production schedule defines what
end products are to be produced for a given period, such as the number of
office tables to produce for a week.
Production plan—The production plan is a detailed schedule of production
for each individual component comprising each end product.
Bottleneck—The bottleneck is traditionally thought of as the workstation
that has the highest utilization or largest ratio of required processing time
to time available. In a broader sense, a bottleneck may be any constraint
or limiting factor (an operator, a conveyor system) in the production of
goods.
314 Part I Study Chapters

Setup—Setup is the activity required to prepare a workstation to produce a

different part type.
Job—Depending on the industry, a job may be any of the following:
• In a general sense, a job refers to the activity or task
being performed.
• In mass production, a job refers to each individual part.
• In a job shop, a job refers to a customer order to be produced.
Machine cycle time—Machine cycle time is the time required to perform
a single operation. If load and unload times are included, it is sometimes
referred to as floor-to-floor time.
Capacity—Capacity refers to either holding capacity, as in the case of
a tank or storage bin, or production capacity, as in the case of a
machine. Production capacity is usually expressed in one of the following
four ways:
• Theoretical capacity is the rate at which a machine is capable of
producing if it were in constant production, assuming 100 percent
efficiency.
• Effective capacity is the actual capacity factored by the reliability of
the machine with allowances for load and unload, chip removal, and
so forth.
• Expected capacity is the effective capacity of the machine factored by
anticipated allowances for system influences such as shortages and
blockages (this is what simulation can tell you).
• Actual capacity is what the machine actually produces.
Scrap rate—Scrap rate is the percentage of defective parts that are
removed from the system following an operation. The opposite of scrap
rate is yield.
Reliability—Reliability is usually measured in terms of mean time between
failures (MTBF), which is the average time a machine or piece of
equipment is in operation before it fails.
Maintainability—Maintainability is usually measured in terms of mean time
to repair (MTTR) and is the average time required to repair a machine or
piece of equipment whenever it fails.
Availability—Availability is the percentage of total scheduled time that a
resource is actually available for production. Availability is uptime, which is
a function of reliability and maintainability.
Preventive or scheduled maintenance—Preventive or scheduled
maintenance is periodic maintenance (lubrication, cleaning, or the like)
performed on equipment to keep it in running condition.
Unit load—A unit load is a consolidated group of parts that is containerized
or palletized for movement through the system. The idea of a unit load is to
minimize handling through consolidation and provide a standardized pallet
or container as the movement item.
 Chapter 12 Modeling Manufacturing Systems 315

12.4 Use of Simulation in Manufacturing

Simulation has proved effective in helping to sort through the complex issues
sur- rounding manufacturing decisions. Kochan (1986) notes that, in
manufacturing systems,
The possible permutations and combinations of workpieces, tools, pallets, transport
vehicles, transport routes, operations, etc., and their resulting performance, are
almost endless. Computer simulation has become an absolute necessity in the design
of prac- tical systems, and the trend toward broadening its capabilities is continuing
as systems move to encompass more and more of the factory.

As companies move toward greater vertical and horizontal integration and look
for ways to improve the entire value chain, simulation will continue to be an es-
sential tool for effectively planning the production and delivery processes.
Simulation in manufacturing covers the range from real-time cell control
to long-range technology assessment, where it is used to assess the feasibility
of new technologies prior to committing capital funds and corporate resources.
Figure 12.1 illustrates this broad range of planning horizons.
Simulations used to make short-term decisions usually require more detailed
models with a closer resemblance to current operations than what would be
found in long-term decision-making models. Sometimes the model is an exact
replica of the current system and even captures the current state of the system.
This is true in real- time control and detailed scheduling applications. As
simulation is used for more long-term decisions, the models may have little or
no resemblance to current opera- tions. The model resolution becomes coarser,
usually because higher-level decisions are being made and data are too fuzzy and
unreliable that far out into the future.
Simulation helps evaluate the performance of alternative designs and the
effec- tiveness of alternative operating policies. A list of typical design and
operational decisions for which simulation might be used in manufacturing
includes the following:
Design Decisions
1. What type and quantity of machines, equipment, and tooling should
be used?
2. How many operating personnel are needed?
3. What is the production capability (throughput rate) for a given
configuration?

FIGURE 12.1
Decision range in
manufacturing
simulation.
Cell Job Resource Production Process System Technology
manage- sequen- loading scheduling change configu- assess-
ment cing studies ration ment

Seconds Hours Days Weeks Months 1–2 years 2–5 years

316 Part I Study Chapters

4. What type and size of material handling system should be used?

5. How large should buffer and storage areas be?
6. What is the best layout of the factory?
7. What automation controls work the best?
8. What is the optimum unit load size?
9. What methods and levels of automation work best?
10. How balanced is a production line?
11.Where are the bottlenecks (bottleneck analysis)?
12. What is the impact of machine downtime on production
(reliability analysis)?
13. What is the effect of setup time on production?
14. Should storage be centralized or localized?
15. What is the effect of vehicle or conveyor speed on part flow?
Operational Decisions
1. What is the best way to schedule preventive maintenance?
2. How many shifts are needed to meet production requirements?
3. What is the optimum production batch size?
4. What is the optimum sequence for producing a set of jobs?
5. What is the best way to allocate resources for a particular set of tasks?
6. What is the effect of a preventive maintenance policy as opposed to a
corrective maintenance policy?
7. How much time does a particular job spend in a system (makespan
or throughput time analysis)?
8. What is the best production control method (kanban, MRP, or other)
to use?
In addition to being used for specific design or operational decisions,
simula- tion has been used to derive general design rules so that the most cost-
effective decisions can be made for a range of operating conditions. One study,
for example, used simulation to estimate how the output capacity of a
manufacturing system changes as the various components of the system are
increased or improved for a known cost. These data were then used to develop
cost versus output curves for a given part or product mix. By comparing these
curves for different types of production systems, it was possible to identify
break-even points where a partic- ular type of system was economically
preferred over other systems for particular products or product mixes (Renbold
and Dillmann 1986).

12.5 Applications of Simulation in Manufacturing

There are numerous applications for simulation in manufacturing. Many of them
are the same as those found in any type of system, such as capacity analysis and
cycle time reduction. Applications that tend to be more specific to
manufacturing
Chapter 12 Modeling Manufacturing Systems 317

include
• Methods analysis.
• Plant layout.
• Batch sizing.
• Production control.
• Inventory control.
• Supply chain planning.
• Production scheduling.
• Real-time control.
• Emulation.
Each of these application areas is discussed here.

12.5.1 Methods Analysis

Methods analysis looks at alternative ways of processing and handling material.
An assembly process, for example, can be performed all at a single operation
with several parallel stations or be broken down into multiple stages performed
on a single assembly line. Production and assembly lines may be either
paced, in which product movement occurs at a fixed rate with the operator
keeping pace, or unpaced, in which the rate of flow is determined by the speed
of the worker. The relative performance of these alternative methods of
production can be easily demonstrated using simulation.
One of the decisions that addresses manufacturing methods pertains to the
type and level of automation to use in the factory. Simulation has been especially
helpful in designing automated systems to safeguard against suboptimal perfor-
mance. As noted by Glenney and Mackulak (1985), “Computer simulation will
permit evaluation of new automation alternatives and eliminate the problem of
building a six-lane highway that terminates onto a single-lane dirt road.” Often
an unbalanced design occurs when the overall performance is overlooked
because of preoccupation with a single element. “Islands of automation” that are
not properly integrated and balanced lead to suboptimal performance. For
example, an auto- mated machine capable of producing 200 parts per hour fed
by a manual handler at the rate of 50 parts per hour will produce only 50 parts
per hour. The expression that “a chain is no stronger than its weakest link” has
particular application to au- tomated manufacturing systems.
There are three types of automation to consider in manufacturing: operation
automation, material handling automation, and information automation. The
degree of automation ranges from manual to fully automatic. Figure 12.2 shows
the types and degrees of automation.
Although information flow is frequently overlooked in manufacturing simu-
lations, it may be a contributing factor to the overall system performance and
therefore may merit some analysis. As noted in a Manufacturing
Engineering article (1993), “It’s easier to make the product than to adjust the
paper and data flow required to track the product.”
318 Part I Study Chapters

FIGURE 12.2 Automated

Axes of automation.
Source: Adapted from
G. Boehlert and W. J.
Trybula, “Successful Factory
Automation,” IEEE

Operations
Transactions, September
1984, p. 218. Automated

Semiautomated

Semiautomated

Manual Manual Material handling

Automated
Manual Semiautomated

Automation itself does not solve performance problems. If automation is

un- suited for the application, poorly designed, or improperly implemented and
inte- grated, then the system is not likely to succeed. The best approach to
automation is to first simplify, then systematize, and finally automate. Some
companies find that after simplifying and systematizing their processes, the
perceived need to automate disappears.

12.5.2 Plant Layout

With the equipment-intensive nature of manufacturing systems, plant layout is
important to the smooth flow of product and movement of resources through the
facility. A good layout results in a streamlined flow with minimal movement and
thus minimizes material handling and storage costs. Even existing systems can
benefit from a layout analysis. Layouts tend to evolve haphazardly over time
with little thought given to work flow. This results in nonuniform,
multidirectional flow patterns that cause management and material handling
problems. Simulation helps to identify inefficient flow patterns and to create
better layouts to economize the flow of material.
In planning the layout of a manufacturing system, it is important to have a
total system perspective of material flow. Flow within the manufacturing opera-
tion is often hierarchical, beginning with the overall flow from receiving to man-
ufacturing to shipping. At the lowest level, parts might flow from an input buffer
to a machine (see Figure 12.3). Any or all of the levels shown in Figure 12.3
may be present within a plant. Interaction points occur between levels as well as
within each level. When modeling material flow in a factory it is important to
consider the level of flow and how flows interact.
 Chapter 12 Modeling Manufacturing Systems 319

FIGURE 12.3
Material flow
system. Receiving Manufacturing Shipping

Department A Department B Department C

Cell A Cell B Cell C

Station A Station B Station C

Input buffer Machine Output buffer

In laying out equipment in a facility, the designer must choose between a

process layout, a product layout, and a part family layout of machines. In a
process layout, machines are arranged together based on the process they
perform. Machines performing like processes are grouped together. In a
product layout, machines are arranged according to the sequence of operations
that are performed on a product. This results in a serial flow of the product from
machine to machine. In a part family layout, machines are arranged to process
parts of the same family. Part family layouts are also called group technology
cells because group technol- ogy is used to group parts into families. Figure
12.4 illustrates these three differ- ent types of arrangements and their
implications on material flow.
Deciding which layout to use will depend largely on the variety and lot size
of parts that are produced. If a wide variety of parts are produced in small lot
sizes, a process layout may be the most appropriate. If the variety is similar
enough in processing requirements to allow grouping into part families, a cell
layout is best. If the variety is small enough and the volume is sufficiently large,
a
320 Part I Study Chapters

FIGURE 12.4
Part
Comparison between A
(a) process layout,
(b) product layout,
and (a) Process
(c) cell layout. layout
Part
B

Single (b) Product

product layout

(c) Cell
layout

Family 1 Family 2

product layout is best. Often a combination of topologies is used within the same
facility to accommodate mixed requirements. For example, a facility might
be predominately a job shop with a few manufacturing cells. In general, the
more the topology resembles a product layout where the flow can be
streamlined, the greater the efficiencies that can be achieved.
Perhaps the greatest impact simulation can have on plant layout comes from
designing the process itself, before the layout is even planned. Because the
process plan and method selection provide the basis for designing the layout,
having a well-designed process means that the layout will likely not require
major changes once the best layout is found for the optimized process.

12.5.3 Batch Sizing

Batching decisions play a major role in meeting the flow and efficiency goals of
a production facility. A batch or lot of parts refers to a quantity of parts grouped
to- gether for some particular purpose. Typically three different batch types
are spoken of in manufacturing: production batch, move batch, and process
batch.
The production batch, also referred to as the production lot, consists of all
of the parts of one type that begin production before a new part type is
introduced to the system. The move or transfer batch is the collection of parts
that are grouped
 Chapter 12 Modeling Manufacturing Systems 321

FIGURE 12.5 To
production
Illustration of
(a) production
batch,
(b) move batch, and (a) Production batch
(c) process batch.

(c) Process batch

Station
1 Station Station
2 3

(b) ) Move batch

and moved together from one workstation to another. A production batch is often
broken down into smaller move batches. This practice is called lot splitting. The
move batch need not be constant from location to location. In some batch manu-
facturing systems, for example, a technique called overlapped production is used
to minimize machine idle time and reduce work in process. In overlapped pro-
duction, a move batch arrives at a workstation where parts are individually
processed. Then instead of accumulating the entire batch before moving on,
parts are sent on individually or in smaller quantities to prevent the next
workstation from being idle while waiting for the entire batch. The process
batch is the quan- tity of parts that are processed simultaneously at a particular
operation and usually consists of a single part. The relationship between these
batch types is illustrated in Figure 12.5.
Deciding which size to use for each particular batch type is usually based on
economic trade-offs between in-process inventory costs and economies of scale
associated with larger batch sizes. Larger batch sizes usually result in lower
setup costs, handling costs, and processing costs. Several commands are
provided in Pro- Model for modeling batching operations such as GROUP,
COMBINE, JOIN and LOAD.

12.5.4 Production Control

Production control governs the flow of material between individual
workstations. Simulation helps plan the most effective and efficient method for
controlling ma- terial flow. Several control methods exist, any of which may
work well depending on the situation. Common methods include
• Push control.
• Pull control.
• Drum–buffer–rope (DBR) control.
322 Part I Study Chapters

Push Control
A push system is one in which production is driven by workstation capacity and
material availability. Each workstation seeks to produce as much as it can, push-
ing finished work forward to the next workstation. In cases where the system is
unconstrained by demand (the demand exceeds system capacity), material can
be pushed without restraint. Usually, however, there is some synchronization of
push with demand. In make-to-stock production, the triggering mechanism is a
drop in finished goods inventory. In make-to-order or assemble-to-order produc-
tion, a master production schedule drives production by scheduling through a
material requirements planning (MRP) or other backward or forward scheduling
system.
MRP systems determine how much each station should produce for a given
period. Unfortunately, once planned, MRP is not designed to respond to disrup-
tions and breakdowns that occur for that period. Consequently, stations continue
to produce inventory as planned, regardless of whether downstream stations can
absorb the inventory. Push systems such as those resulting from MRP tend to
build up work in process (WIP), creating high inventory-carrying costs and long
flow times.

Pull Control
At the other extreme of a push system is a pull system, in which downstream de-
mand triggers each preceding station to produce a part with no more than one or
two parts at a station at any given time (see Figure 12.6). Pull systems are often
associated with the just-in-time (JIT) or lean manufacturing philosophy, which
advocates the reduction of inventories to a minimum. The basic principle of JIT
is to continuously reduce scrap, lot sizes, inventory, and throughput time as well
as eliminate the waste associated with non–value added activities such as
material handling, storage, machine setup, and rework.

FIGURE 12.6
Push versus Station Station Station
pull system. 1 2 3

(a) ) Push system

Station Station Station

1 2 3

(b) ) Pull system

Chapter 12 Modeling Manufacturing Systems 323

A pull system is generally implemented using a method the Japanese call

kanban (translated as ticket). When an operation is completed at the final
location and exits the location, a new entity or part is pulled from the preceding
WIP buffer. A kanban card accompanies each part bin in the buffer and is
returned to the pre- ceding station when the bin moves on. The returned card
signals the preceding operation to pull a unit from its own WIP and replenish
the kanban. A kanban sys- tem is implemented using either a withdrawal
kanban, authorizing the retrieval of work items, or a production kanban,
authorizing the production of more parts.
When modeling a kanban control system, it usually isn’t necessary to
explic- itly model the cards or actual triggering mechanism used (some systems
use golf balls, bins, or even a painted area on the floor). For most JIT systems
where flow is serial, a kanban system is easily modeled by simply limiting the
capacity of the workstation input and output buffers. A two-bin kanban system,
for example, can be modeled by limiting the input buffer capacity of the
workstation to two. Ulti- mately, a kanban system is just a way to limit queue
capacities.
Kanban is a queue limiter; that is, it tightly links a provider’s service with a user’s
need. Thus, it limits the queue of work in front of the provider (the quantity/amount
of items waiting and the time each item waits). Queue limitation replaces lax flow
con- trol with discipline, which results in customer satisfaction and competitive
advantage (Schonberger and Knod 1994).

Because ProModel uses capacity limitations to control the flow of entities,

entities will not advance to the next station until there is available capacity at
that location. This effectively provides a built-in pull system in which the
emptying of a buffer or workstation signals the next waiting entity to advance
(push systems actually work the same way, only buffers effectively have infinite
capacity). Sev- eral papers have been published (Mitra and Mitrani 1990; Wang
and Wang 1990) showing the use of limited buffers to model JIT systems.
For certain pull systems, triggers signal the release of WIP further
upstream than just one station. An example of this is another form of pull
control called CONWIP (Hopp and Spearman 2001). A CONWIP (CONstant
Work-In-Process) system is a form of pull system that pulls from the final
operation. The completion of a part triggers the release of a new part to the
beginning of the line. A CONWIP system limits work in process just like a
kanban system. A new part is introduced to the system only when a part leaves
the system, thus maintaining a constant inven- tory level. To simulate this
process in ProModel, an ORDER statement should be used whenever an entity
exits the system. This signals the creation of a new entity at the beginning of the
line so that each part that exits the system releases a new part into the system.
CONWIP has the advantage over kanban of being easier to administer while still
achieving nearly the same, and sometimes even superior, results.

Drum–Buffer–Rope (DBR) Control

One approach to production control utilizes a drum–buffer–rope (DBR)
metaphor. This technique is based on the theory of constraints and seeks to
improve produc- tivity by managing the bottleneck operation. The DBR
approach basically lets the bottleneck operation pace the production rate by
acting as a drum. The buffer is
324 Part I Study Chapters

the inventory needed in front of the bottleneck operation to ensure that it is

never starved for parts. The rope represents the tying or synchronizing of the
production release rate to the rate of the bottleneck operation.
As noted earlier in this chapter, a weakness in constraint-based management
is the inability to predict the level of improvement that can be achieved by
eliminat- ing a bottleneck. Simulation can provide this evaluative capability
missing in constraint-based management. It can also help detect floating
bottlenecks for situa- tions where the bottleneck changes depending on product
mix and production rates. Simulating DBR control can help determine where
bottlenecks are and how much buffer is needed prior to bottleneck operations to
achieve optimum results.

12.5.5 Inventory Control

Inventory control involves the planning, scheduling, and dispatching of
inventory to support the production activity. Because of the high dollar impact of
inventory decisions, developing and maintaining a good inventory control
system are criti- cal. Some common goals associated with inventory control at
all stages in the sup- ply chain include
• Responding promptly to customer demands.
• Minimizing order and setup costs associated with supplying inventory.
• Minimizing the amount of inventory on hand as well as all
associated inventory carrying costs.
Decisions affecting inventory levels and costs include
• How much inventory should be ordered when inventory is
replenished (the economic order quantity)?
• When should more inventory be ordered (the reorder point)?
• What are the optimum inventory levels to maintain?
There are two common approaches to deciding when to order more inventory
and how much: the reorder point system and the MRP system. A reorder point
system is an inventory control system where inventory for a particular item is
replenished to a certain level whenever it falls below a defined level. MRP, on
the other hand, is a bit more complicated in that it is time phased. This means
that inventory is ordered to match the timing of the demand for products over
the next planning horizon.
Inventory management must deal with random depletion or usage times and
random lead times, both of which are easily handled in simulation. To model an
inventory control system, one need only define the usage pattern, the demand
pat- tern, and the usage policies (priorities of certain demands, batch or
incremental commitment of inventories, and so on). The demand rate can be
modeled using distributions of interarrival times. Replenishment of raw
materials should be made using an ORDER command that is able to generate
additional inventory when it drops below a particular level.
Running the simulation can reveal the detailed rises and drops in inventory
levels as well as inventory summary statistics (average levels, total stockout time,
Chapter 12 Modeling Manufacturing Systems 325

and so forth). The modeler can experiment with different replenishment strategies
and usage policies until the best plan is found that meets the established criteria.
Using simulation modeling over traditional, analytic modeling for inventory
planning provides several benefits (Browne 1994):
• Greater accuracy because actual, observed demand patterns and irregular
inventory replenishments can be modeled.
• Greater flexibility because the model can be tailored to fit the situation
rather than forcing the situation to fit the limitations of an existing model.
• Easier to model because complex formulas that attempt to capture the
entire problem are replaced with simple arithmetic expressions describing
basic cause-and-effect relationships.
• Easier to understand because demand patterns and usage conditions
are more descriptive of how the inventory control system actually
works. Results reflect information similar to what would be observed
from operating the actual inventory control system.
• More informative output that shows the dynamics of inventory conditions
over time and provides a summary of supply, demand, and shortages.
• More suitable for management because it provides “what if ” capability
so alternative scenarios can be evaluated and compared. Charts and
graphs are provided that management can readily understand.

Centralized versus Decentralized Storage. Another inventory-related issue has

to do with the positioning of inventory. Traditionally, inventory was placed in
cen- tralized locations for better control. Unfortunately, centralized inventory
creates excessive handling of material and increased response times. More
recent trends are toward decentralized, point-of-use storage, with parts kept
where they are needed. This eliminates needless handling and dramatically
reduces response time. Simulation can effectively assess which method works
best and where to strategically place storage areas to support production
requirements.

12.5.6 Supply Chain Management

Supply chain management is a key area for improving efficiencies in a corpora-
tion. A supply chain is made up of suppliers, manufacturers, distributors, and
customers. There are two main goals with respect to supply chain management:
to reduce costs and to improve customer service, which is achieved by reducing
de- livery time. Supply chain network analysis tools exist that can look at the
problem in the aggregate and help identify optimum site locations and
inventory levels given a general demand. Simulation, on the other hand, can
look at the system on a more detailed level, analyzing the impact of
interdependencies and variation over time. Simulation “accurately traces each
transaction through the network at a detailed level, incorporating cost and
service impacts of changes in inventory policies, shipment policies,
uncertainty in demand, and other time-dependent factors” (Napolitano 1997).
326 Part I Study Chapters

Simulation of flow between facilities is similar to the simulation of flow

within a facility. One of the most difficult challenges in modeling a supply chain
is making the flow of entities in the model demand-driven. This is done by using
the ORDER statement, with entities representing the orders waiting to be
filled. Often order or customer consolidation must also be taken into account,
which requires some data management using variables and attributes.

12.5.7 Production Scheduling

Production scheduling determines the start and finish times for jobs to be
produced. The use of simulation for production scheduling is called simulation-
based sched- uling. Some scheduling is static and determined ahead of time.
Other scheduling is performed dynamically, such as sequencing a set of jobs
currently waiting to be processed at a particular machine. Simulation can help
make both types of sched- uling decisions and can assess any scheduling rules
defined by the modeler. Once the simulation is run, a report can be generated
showing the start and finish times of each job on each machine. Simulation does
not set the schedule itself, but rather re- ports the schedule resulting from a
given set of operating rules and conditions.
Job sequencing is a frequent challenge for job shops, which tend to be very
due-date-driven in their scheduling and are often faced with the question “In
what sequence should jobs be processed so as to minimize lateness or
tardiness?” Sup- pose, for example, that three jobs are waiting to be processed,
each requiring the same resources but in a different sequence. If the goal is to
process the jobs in an order that will minimize total production time yet still
permit on-time delivery, several simulation runs can be made just before
production to find the optimal sequence in which the jobs should be processed.
In scheduling, we usually try to achieve four principal goals or objectives
(Kiran and Smith 1984):
1. Minimize job lateness or tardiness.
2. Minimize the flow time or time jobs spend in production.
3. Maximize resource utilization.
4. Minimize production costs.
The decision of which job to process next is usually based one of the following
rules:

Rule Definition

Shortest processing time Select the job having the least processing time.
Earliest due date Select the job that is due the soonest.
First-come, first-served Select the job that has been waiting the longest for this
workstation.
First-in-system, first-served Select the job that has been in the shop the longest.
Slack per remaining operations Select the job with the smallest ratio of slack to operations
remaining to be performed.
Chapter 12 Modeling Manufacturing Systems 327

Traditional scheduling methods fail to account for fluctuations in quantities

and resource capacity. This variation can be built into simulation models. How-
ever, in using simulation for dynamic scheduling, we are dealing with short time
periods and are therefore less concerned about long-term statistical fluctuations
in the system such as machine downtimes. In such instances, typically a
determinis- tic simulation is used that is based on expected operation times.
Models built for simulation-based scheduling have the following characteristics:
• The model captures an initial state.
• Operation times are usually based on expected times.
• Anomaly conditions (machine failures and the like) are ignored.
• The simulation is run only until the required production has been met.
Simulation can work with material requirements planning (MRP), advanced
planning and scheduling (APS), and manufacturing execution systems (MES) to
simulate the plans generated by these systems in order to test their viability. It
can also produce a detailed schedule showing which resources were used and at
what times. This information can then be used for resource scheduling.
It usually isn’t practical to simulate an entire MRP system because the num-
ber of different entity types becomes too unmanageable. You should consider
building a model based only on critical product components. You can forget the
small inexpensive items like nuts and bolts, which are usually managed using a
re- order point system, and focus on the few components that constitute the
major scheduling challenge. This could provide a reasonably simple model that
could be used regularly to test MRP-generated requirements. Such a model
could then be used to achieve true, closed-loop MRP, in which production
schedules could be iteratively generated and evaluated until the best schedule
was found for the avail- able capacity of the system.

12.5.8 Real-Time Control

During actual production, simulation has been integrated with manufacturing
cells to perform real-time analysis such as next task selection and dynamic rout-
ing decisions. Initially, a model is built to operate with a simulated version of the
cell, and then the simulated cell components are replaced with the actual cell
com- ponents. Three benefits of using the simulation for cell management are
• Logic used in the simulator does not need to be recoded for the controller.
• Animation capabilities allow processes to be monitored on the layout.
• Statistical-gathering capabilities of simulation automatically provide
statistics on selected measures of performance.

12.5.9 Emulation
A special use of simulation in manufacturing, particularly in automated systems,
has been in the area of hardware emulation. As an emulator, simulation takes
328 Part I Study Chapters

inputs from the actual control system (such as programmable controllers or mi-
crocomputers), mimics the behavior that would take place in the actual system,
and then provides feedback signals to the control system. The feedback signals
are synthetically created rather than coming from the actual hardware devices.
In using simulation for hardware emulation, the control system is essentially
plugged into the model instead of the actual system. The hardware devices are
then emulated in the simulation model. In this way simulation is used to test,
debug, and even refine the actual control system before any or all of the
hardware has been installed. Emulation can significantly reduce the time to start
up new sys- tems and implement changes to automation.
Emulation has the same real-time requirements as when simulation is used
for real-time control. The simulation clock must be synchronized with the real
clock to mimic actual machining and move times.

12.6 Manufacturing Modeling Techniques

In Chapter 7 we presented modeling techniques that apply to a broad range of
systems, including manufacturing systems. Here we discuss a few modeling
tech- niques that are more specific to manufacturing systems.

12.6.1 Modeling Machine Setup

Manufacturing systems often consist of processing equipment that has particular
settings when working on a particular job. A machine setup or changeover
occurs when tooling or other machine adjustments must be made to
accommodate the next item to be processed. Machine setups usually occur only
when there is a change of part type. For example, after running a lot of 200
parts of type A, the machine is retooled and adjusted for producing a lot of part
type B. In some situations, adjust- ments must be made between processing parts
of the same type. When setup is per- formed between different part types, the
time and resources required to perform the setup may depend on both the part
type of the new lot and the part type of the previ- ous lot. For example, the setup
time when changing over from part A to part B may be different than the setup
time when changing over from part B to part C.
Setups are easily modeled in ProModel by selecting the Setup option under
the Downtime menu for a location record. Setups can be defined to occur after
every part or only after a change of part type.

12.6.2 Modeling Machine Load and Unload Time

Sometimes a key issue in modeling manufacturing systems is machine load and
un- load time. There are several approaches to dealing with load/unload
activities:
• Ignore them. If the times are extremely short relative to the operation
time, it may be safe to ignore load and unload times.
• Combine them with the operation time. If loading and unloading the
machine are simply an extension of the operation itself, the load and
 Chapter 12 Modeling Manufacturing Systems 329

unload times can be tacked onto the operation time. A precaution here
is in semiautomatic machines where an operator is required to load
and/or unload the machine but is not required to operate the machine. If
the operator is nearly always available, or if the load and unload
activities are automated, this may not be a problem.
• Model them as a movement or handling activity. If, as just described, an
operator is required to load and unload the machine but the operator is
not always available, the load and unload activities should be modeled as
a separate move activity to and from the location. To be accurate, the part
should not enter or leave the machine until the operator is available. In
ProModel, this would be defined as a routing from the input buffer to the
machine and then from the machine to the output buffer using the
operator as the movement resource.

12.6.3 Modeling Rework and Scrap

It is not uncommon in manufacturing systems to have defective items that
require special treatment. A defective item is usually detected either at an
inspection station or at the station that created the defect. Sometimes part defects
are discovered at a later downstream operation where, for example, the part can’t
be assembled. In this case, the downstream workstation doubles as a sort of
inspection station. When a defective item is encountered, a decision is usually
made to
• Reject the part (in which case it exits the system). This is done by simply
defining a probabilistic routing to EXIT.
• Correct the defect at the current station. To model this approach, simply
add an additional WAIT statement to the operation logic that is executed the
percentage of the time defects are expected to occur.
• Route the part to an offline rework station. This is modeled using a
probabilistic routing to the rework station.
• Recycle the part through the station that caused the defect. This is also
modeled using a probabilistic routing back to the station that caused the
defect. Sometimes an entity attribute needs to be used to designate whether
this is a first pass part or a rework part. This is needed when reworked
parts require a different operation time or if they have a different routing.
The first consideration when modeling rework operations is to determine
whether they should be included in the model at all. For example, if a part rejec-
tion rate is less than 1 percent, it may not be worth including in the model.

12.6.4 Modeling Transfer Machines

Transfer machines are machines that have multiple serial stations that all transfer
their work forward in a synchronized fashion. Transfer machines may be either
rotary or in-line. On a rotary transfer machine, also called a dial-index
machine, the load and unload stations are located next to each other and parts
are usually
330 Part I Study Chapters

FIGURE 12.7
Transfer line
system. Machine Buffer Station

Line

placed directly on the station fixture. In-line transfer machines have a load
station at one end and an unload station at the other end. Some in-line transfer
machines are coupled together to form a transfer line (see Figure 12.7) in
which parts are placed on system pallets. This provides buffering
(nonsynchronization) and even recirculation of pallets if the line is a closed
loop.
Another issue is finding the optimum number of pallets in a closed, nonsyn-
chronous pallet system. Such a system is characterized by a fixed number of pal-
lets that continually recirculate through the system. Obviously, the system should
have enough pallets to at least fill every workstation in the system but not so
many that they fill every position in the line (this would result in a gridlock).
Generally, productivity increases as the number of pallets increases up to a
certain point, beyond which productivity levels off and then actually begins to
decrease. Stud- ies have shown that the optimal point tends to be close to the
sum of all of the workstation positions plus one-half of the buffer pallet
positions.
A typical analysis might be to find the necessary buffer sizes to ensure that
the system is unaffected by individual failures at least 95 percent of the time. A
similar study might find the necessary buffer sizes to protect the operation
against the longest tool change time of a downstream operation.
Stations may be modeled individually or collectively, depending on the
level of detail required in the model. Often a series of stations can be modeled
as a sin- gle location. Operations in a transfer machine can be modeled as a
simple opera- tion time if an entire machine or block of synchronous stations
is modeled as a single location. Otherwise, the operation time specification is a
bit tricky because it depends on all stations finishing their operation at the same
time. One might ini- tially be inclined simply to assign the time of the slowest
operation to every sta- tion. Unfortunately, this does not account for the
synchronization of operations. Usually, synchronization requires a timer to
be set up for each station that represents the operation for all stations. In
ProModel this is done by defining an activated subroutine that increments a
global variable representing the cycle completion after waiting for the cycle
time. Entities at each station wait for the variable to be incremented using a
WAIT UNTIL statement.
 Chapter 12 Modeling Manufacturing Systems 331

12.6.5 Continuous Process Systems

A continuous process system manufactures product, but in a different way than
discrete part manufacturing systems. Continuous processing involves the
produc- tion of bulk substances or materials such as chemicals, liquids,
plastics, metals, textiles, and paper (see Figure 12.8).
Pritsker (1986) presents a simulation model in which the level of oil in a
storage tank varies depending on whether oil is being pumped into or out of the
tank. If the rate of flow into or out of the tank is constant, then the change in
level is the rate of flow multiplied by the length of time. If, however, the rate
of flow varies continuously, it is necessary to integrate the function defining
the rate of flow over the time interval concerned (see Figure 12.9).
ProModel provides a tank construct and a set of routines for modeling
systems in process industries. Both constant and variable flow rates can be
defined. The routines provided are ideally suited for modeling combined discrete
and continu- ous activities.

FIGURE 12.8
Continuous flow
system.

FIGURE 12.9
Rate of flow Rate of flow
Quantity of flow when f f
(a) rate is constant
and
(b) rate is changing. F F

t1 t2 Time t1 t2 Time

t1

Q = F * (t2 - t1) Q =
 f dt
t2
(a) (b)
332 Part I Study Chapters

12.7 Summary
In this chapter we focused on the issues and techniques for modeling
manufactur- ing systems. Terminology common to manufacturing systems was
presented and design issues were discussed. Different applications of simulation
in manufactur- ing were described with examples of each. Issues related to
modeling each type of system were explained and suggestions offered on how
system elements for each system type might be represented in a model.

12.8 Review Questions

1. List four characteristics of manufacturing systems that make them
different from most service systems in the way they are simulated.
2. What is the range of decision making for which simulation is used in
manufacturing systems?
3. How can simulation help in planning the layout of a manufacturing
facility?
4. In modeling automation alternatives, how can simulation reduce the risk
of “building a six-lane highway that terminates into a single-lane dirt
road”?
5. Conceptually, how would you model a pull system where the next
downstream operation is pulling production? Where the completion of
a final product triggers the start of a new product?
6. What are the characteristics of a simulation model that is used for
production scheduling?
7. How can emulation help test an actual control system?
8. Why would it be invalid to model a synchronous transfer machine by
simply giving all of the stations the same operation time?
9. In ProModel, how would you model an operation with an 85 percent
yield where defective items are routed to a rework station?
10. In ProModel, how would you model a system where items are moved
in batches of 50, but processed individually at each station?

References
Askin, Ronald G., and Charles R. Standridge. Modeling and Analysis of
Manufacturing Systems. New York: John Wiley & Sons, 1993.
Berdine, Robert A. “FMS: Fumbled Manufacturing Startups?” Manufacturing
Engineer- ing, July 1993, p. 104.
Bevans, J. P. “First, Choose an FMS Simulator.” American Machinist, May 1982,
pp. 144–45.
Blackburn, J., and R. Millen. “Perspectives on Flexibility in Manufacturing: Hardware
versus Software.” In Modelling and Design of Flexible Manufacturing Systems, ed.
Andrew Kusiak, pp. 99–109. Amsterdam: Elsevier, 1986.
Chapter 12 Modeling Manufacturing Systems 333

Boehlert, G., and W. J. Trybula. “Successful Factory Automation.” IEEE Transactions,

September 1984, p. 218.
Bozer, Y. A., and J. A. White. “Travel-Time Models for Automated Storage/Retrieval
Systems.” IIE Transactions, December 1984, pp. 329–38.
Browne, Jim. “Analyzing the Dynamics of Supply and Demand for Goods and Services.”
Industrial Engineering, June 1994, pp. 18–19.
Cutkosky, M.; P. Fussell; and R. Milligan Jr. “The Design of a Flexible Machining Cell for
Small Batch Production.” Journal of Manufacturing Systems 3, no. 1 (1984), p. 39.
Fitzgerald, K. R. “How to Estimate the Number of AGVs You Need.” Modern Materials
Handling, October 1985, p. 79.
Gayman, David J. “Carving Out a Legend.” Manufacturing Engineering, March 1988,
pp. 75–79.
Glenney, N. E., and G. T. Mackulak. “Modeling and Simulation Provide Key to CIM
Implementation Philosophy.” Industrial Engineering, May 1985, p. 84.
Greene, James H. Production and Inventory Control Handbook. New York: McGraw-Hill,
1987.
Groover, Mikell P. Automation, Production Systems, and Computer-Integrated Manufac-
turing. Englewood Cliffs, NJ; Prentice Hall, 1987, pp. 119–29.
Hollier, R. H. “The Grouping Concept in Manufacture.” International Journal of Opera-
tions and Production Management, 1980, pp. 1–71.
Hopp, Wallace J., and M. Spearman, Factory Physics. New York: Irwin/McGraw-Hill,
2001, p. 180.
Kiran, A. S., and M. L. Smith. “Simulation Studies in Job Shop Scheduling: A Survey.”
Computers & Industrial Engineering, vol 8(2). 1984, pp. 87–93.
Kochan, D. CAM Developments in Computer Integrated Manufacturing. Berlin: Springer-
Verlag, 1986.
Langua, Leslie. “Simulation and Emulation.” Material Handling Engineering, May 1997,
pp. 41– 43.
Law, A. M. “Introduction to Simulation: A Powerful Tool for Analyzing Complex Manu-
facturing Systems.” Industrial Engineering, May 1986, pp. 57–58.
The Material Handling Institute. Consideration for Planning and Installing an Automated
Storage/Retrieval System. Pittsburgh, PA: Material Handling Institute, 1977.
Miller, Richard Kendall. Manufacturing Simulation. Lilburn, GA: The Fairmont Press,
1990.
Miner, R. J. “Simulation as a CIM Planning Tool.” In Simulation, ed. R. D. Hurrion, p. 73.
Kempston, Bedford, UK: IFS Publications, 1987.
Mitra, Debasis, and Isi Mitrani. “Analysis of a Kanban Discipline for Cell Coordination in
Production Lines.” Management Science 36, no. 12 (1990), pp. 1548–66.
Napolitano, Maida. “Distribution Network Modeling” IIE Solutions, June 1997, pp. 20–25.
Noaker, Paula M. “Strategic Cell Design.” Manufacturing Engineering, March 1993,
pp. 81–84.
Pritsker, A. A. B. Introduction to Simulation and Slam II. West Lafayette, IN: Systems
Publishing Corporation, 1986, p. 600.
Renbold, E. V., and R. Dillmann. Computer-Aided Design and Manufacturing Methods
and Tools. Berlin: Springer-Verlag, 1986.
Schonberger, Richard J., and Edward M. Knod Jr. Operations Management: Continuous
Improvement. 5th ed. Burr Ridge, IL: Richard D. Irwin, 1994.
Suri, R., and C. K. Whitney. “Decision Support Requirements in Flexible Manufacturing.”
Journal of Manufacturing Systems 3, no. 1 (1984).
334 Part I Study Chapters

Suzaki, Kiyoshi. The New Manufacturing Challenge: Techniques for Continuous

Improve- ment. New York: Free Press, 1987.
Wang, Hunglin, and Hsu Pin Wang. “Determining the Number of Kanbans: A Step
Toward Non-Stock Production.” International Journal of Production Research
28, no. 11 (1990), pp. 2101–15.
Wick, C. “Advances in Machining Centers.” Manufacturing Engineering, October 1987,
p. 24.
Zisk, B. “Flexibility Is Key to Automated Material Transport System for Manufacturing
Cells.” Industrial Engineering, November 1983, p. 60.
Harrell−Ghosh−Bo I. Study 13. Modeling © The
wden: Simulation Chapters Material McGraw−Hill
Using ProModel, Handling Companies,
Second Edition

C H A P T E R

13 MODELING
MATERIAL HANDLING
SYSTEMS

“Small changes can produce big results, but the areas of highest leverage are
often the least obvious.”
—Peter Senge

13.1 Introduction
Material handling systems utilize resources to move entities from one location to
another. While material handling systems are not uncommon in service systems,
they are found mainly in manufacturing systems. Apple (1977) notes that
material handling can account for up to 80 percent of production activity. On
average, 50 percent of a company’s operation costs are material handling costs
(Meyers 1993). Given the impact of material handling on productivity and
operation costs, the importance of making the right material handling decisions
should be clear.
This chapter examines simulation techniques for modeling material
handling systems. Material handling systems represent one of the most
complicated fac- tors, yet, in many instances, the most important element, in a
simulation model. Conveyor systems and automatic guided vehicle systems
often constitute the backbone of the material flow process. Because a basic
knowledge of material handling technologies and decision variables is
essential to modeling material handling systems, we will briefly describe the
operating characteristics of each type of material handling system.

13.2 Material Handling Principles

It is often felt that material handling is a necessary evil and that the ideal system
is one in which no handling is needed. In reality, material handling can be a
tremendous support to the production process if designed properly. Following is
a

335
336 Part I Study Chapters

list of 10 principles published by the Material Handling Institute as a guide to de-

signing or modifying material handling systems:
1. Planning principle: The plan is the prescribed course of action and
how to get there. At a minimum it should define what, where, and when
so that the how and who can be determined.
2. Standardization principle: Material handling methods, equipment,
controls, and software should be standardized to minimize variety and
customization.
3. Work principle: Material handling work (volume × weight or count
per unit of time × distance) should be minimized. Shorten distances
and use gravity where possible.
4. Ergonomic principle: Human factors (physical and mental) and safety
must be considered in the design of material handling tasks and
equipment.
5. Unit load principle: Unit loads should be appropriately sized to achieve
the material flow and inventory objectives.
6. Space utilization principle: Effective and efficient use should be made
of all available (cubic) space. Look at overhead handling systems.
7. System principle: The movement and storage system should be fully
integrated to form a coordinated, operational system that spans
receiving, inspection, storage, production, assembly, packaging,
unitizing, order selection, shipping, transportation, and the handling of
returns.
8. Automation principle: Material handling operations should be
mechanized and/or automated where feasible to improve operational
efficiency, increase responsiveness, improve consistency and
predictability, decrease operating costs, and eliminate repetitive or
potentially unsafe manual labor.
9. Environmental principle: Environmental impact and energy
consumption should be considered as criteria when designing or
selecting alternative equipment and material handling systems.
10.Life cycle cost principle: A thorough economic analysis should
account for the entire life cycle of all material handling equipment and
resulting systems.

13.3 Material Handling Classification

With over 500 different types of material handling equipment to choose from,
the selection process can be quite staggering. We shall not attempt here to
describe or even list all of the possible types of equipment. Our primary interest
is in modeling material handling systems, so we are interested only in the
general categories of equipment having common operating characteristics.
Material handling systems
 Chapter 13 Modeling Material Handling Systems 337

are traditionally classified into one of the following categories (Tompkins et al.
1996):
1. Conveyors.
2. Industrial vehicles.
3. Automated storage/retrieval systems.
4. Carousels.
5. Automatic guided vehicle systems.
6. Cranes and hoists.
7. Robots.
Missing from this list is “hand carrying,” which still is practiced widely if for no
other purpose than to load and unload machines.

13.4 Conveyors
A conveyor is a track, rail, chain, belt, or some other device that provides
continu- ous movement of loads over a fixed path. Conveyors are generally used
for high- volume movement over short to medium distances. Some overhead
or towline systems move material over longer distances. Overhead systems most
often move parts individually on carriers, especially if the parts are large. Floor-
mounted con- veyors usually move multiple items at a time in a box or container.
Conveyor speeds generally range from 20 to 80 feet per minute, with high-speed
sortation conveyors reaching speeds of up to 500 fpm in general merchandising
operations.
Conveyors may be either gravity or powered conveyors. Gravity conveyors
are easily modeled as queues because that is their principal function. The more
challenging conveyors to model are powered conveyors, which come in a
variety of types.

13.4.1 Conveyor Types

Conveyors are sometimes classified according to function or configuration:
• Accumulation conveyor—a conveyor that permits loads to queue up
behind each other.
• Transport conveyor—a conveyor that transports loads from one point to
another; usually nonaccumulating.
• Sortation conveyor—a conveyor that provides diverting capability to
divert loads off the conveyor.
• Recirculating conveyor—a conveyor loop that causes loads to recirculate
until they are ready for diverting.
• Branching conveyor—a conveyor that is characterized by a main line
with either merging or diverging branches or spurs. Branches may, in
turn, have connected spurs or branches.
338 Part I Study Chapters

There are many different types of conveyors based on physical characteristics.

Among the most common types are the belt, roller, chain, trolley, power-and-
free, tow, and monorail conveyors. A brief description will be given of each of
these types.

Belt Conveyors. Belt conveyors have a circulating belt on which loads are car-
ried. Because loads move on a common span of fabric, if the conveyor stops, all
loads must stop. Belt conveyors are often used for simple load transport.

Roller Conveyors. Some roller conveyors utilize rollers that may be “dead” if
the bed is placed on a grade to enable the effect of gravity on the load to actuate
the rollers. However, many roller conveyors utilize “live” or powered rollers to
convey loads. Roller conveyors are often used for simple load accumulation.

Chain Conveyors. Chain conveyors are much like a belt conveyor in that one or
more circulating chains convey loads. Chain conveyors are sometimes used in
combination with roller conveyors to provide right-angle transfers for heavy
loads. A pop-up section allows the chains running in one direction to “comb”
through the rollers running in a perpendicular direction.

Trolley Conveyors. A trolley conveyor consists of a series of trolleys (small

wheels) that ride along a track and are connected by a chain, cable, or rod. Load
carriers are typically suspended from the trolleys. The trolleys, and hence the
load carriers, continually move so that the entire system must be stopped to
bring a sin- gle load to a stop. No accumulation can take place on the conveyor
itself. Parts are frequently loaded and unloaded onto trolley conveyors while
the carriers are in motion (usually not faster than 30 fpm). However, because
a trolley conveyor can be designed with a vertical dip, it can descend to
automatically load a part. Automatic unloading is simpler. A carrier can be
tipped to discharge a load or a cylinder can be actuated to push a load off a
carrier onto an accumulation device. Discharge points can be programmed.

Power-and-Free Conveyors. Power-and-free conveyors consist of two parallel

trolley systems, one of which is powered while trolleys in the other system are
nonpowered and free-moving. Loads are attached to the free trolleys and a
“dog” or engaging pin on the powered trolleys engages and disengages the
passive free trolleys to cause movement and stoppage. In some power-and-free
systems, en- gaged load trolleys will automatically disengage themselves from
the power line when they contact carriers ahead of them. This allows loads to be
accumulated. In the free state, loads can be moved by hand or gravity; they
can be switched, banked, or merely delayed for processing.

Tow Conveyors. A tow conveyor or towline system is an endless chain running

overhead in a track or on or beneath the ground in a track. The chain has a dog
or other device for pulling (towing) wheeled carts on the floor. Towlines are
best
Chapter 13 Modeling Material Handling Systems 339

suited for applications where precise handling is unimportant. Tow carts are rela-
tively inexpensive compared to powered vehicles; consequently, many of them
can be added to a system to increase throughput and be used for accumulation.
An underfloor towline uses a tow chain in a trough under the floor. The
chain moves continuously, and cart movement is controlled by extending a
drive pin from the cart down into the chain. At specific points along the
guideway, computer-operated stopping mechanisms raise the drive pins to halt
cart move- ment. One advantage of this system is that it can provide some
automatic buffer- ing with stationary carts along the track.
Towline systems operate much like power-and-free systems, and, in fact,
some towline systems are simply power-and-free systems that have been
inverted. By using the floor to support the weight, heavier loads can be
transported.

Monorail Conveyors. Automatic monorail systems have self-powered carriers

that can move at speeds of up to 300 fpm. In this respect, a monorail system is
more of a discrete unit movement system than a conveyor system. Travel can be
disengaged automatically in accumulation as the leading “beaver tail” contacts
the limit switch on the carrier in front of it.

13.4.2 Operational Characteristics

The operational characteristics of conveyor systems are distinctly different from
those of other material handling systems. Some of the main distinguishing fea-
tures pertain to the nature of load transport, how capacity is determined, and
how entity pickup and delivery occur.

Load Transport. A conveyor spans the distance of travel along which loads
move continuously, while other systems consist of mobile devices that move one
or more loads as a batch move.

Capacity. The capacity of a conveyor is determined by the speed and load spac-
ing rather than by having a stated capacity. Specifically, it is a function of the
min- imum allowable interload spacing (which is the length of a queue position
in the case of accumulation conveyors) and the length of the conveyor. In
practice, how- ever, this may never be reached because the conveyor speed
may be so fast that loads are unable to transfer onto the conveyor at the
minimum allowable spacing. Furthermore, intentional control may be imposed
on the number of loads that are permitted on a particular conveyor section.

Entity Pickup and Delivery. Conveyors usually don’t pick up and drop off
loads, as in the case of lift trucks, pallet jacks, or hand carrying, but rather loads
are typically placed onto and removed from conveyors. Putting a load onto an
input spur of a branching conveyor and identifying the load to the system so it
can enter the conveyor system is commonly referred to as load induction (the
spur is called an induction conveyor).
340 Part I Study Chapters

13.4.3 Modeling Conveyor Systems

Depending on the nature of the conveyor and its operation, modeling a conveyor
can range from fairly straightforward to extremely complex. For single
conveyor sections, modeling is very simple. Branching and recirculating
conveyors, on the other hand, give rise to several complexities (recirculation,
merging, and so on) that make it nearly impossible to predict how the system
will perform. These types of conveyors make especially good problems for
simulation.
From a modeling standpoint, a conveyor may be classified as being either
ac- cumulation or nonaccumulation (also referred to as accumulating or
nonaccumu- lating), with either fixed or random load spacing (see Table 13.1).

Accumulation Conveyors. Accumulation conveyors are a class of conveyors

that provide queuing capability so that if the lead load stops, succeeding loads
still advance along the conveyor and form a queue behind the stopped part.
Accumu- lation conveyors permit independent or nonsynchronous part
movement and therefore maximize part carrying capacity.

Nonaccumulation Conveyors. Nonaccumulation or simple transport conveyors

are usually powered conveyors having a single drive such that all movement on
the conveyor occurs in unison, or synchronously. If a load must be brought to a
stop, the entire conveyor and every load on it is also brought to a stop. When the
conveyor starts again, all load movement resumes.

Fixed Spacing. Conveyors with fixed load spacing, sometimes referred to as

segmented conveyors, require that loads be introduced to the conveyor at fixed
intervals. Tow conveyors and power-and-free conveyors, which have fixed
spaced dogs that engage and disengage a part carrying cart or trolley, are
examples of ac- cumulation conveyors with fixed load spacing. Trolley
conveyors with hanging carriers at fixed intervals or tray conveyors with
permanently attached trays at fixed intervals are examples of nonaccumulation
conveyors with fixed spacing.

Random Load Spacing. Random load spacing permits parts to be placed at any
distance from another load on the same conveyor. A powered roller conveyor is
a common example of an accumulation conveyor with random load spacing.
Pow- ered conveyors typically provide noncontact accumulation, while gravity
convey- ors provide contact accumulation (that is, the loads accumulate
against each

TABLE 13.1 Types of Conveyors for Modeling Purposes

Accumulation Nonaccumulation

Fixed Spacing Power-and-free, towline Trolley, sortation

Random Roller, monorail Belt, chain
Spacing
Chapter 13 Modeling Material Handling Systems 341

other). A powered belt conveyor is a typical example of a nonaccumulation

con- veyor with random spacing. Parts may be interjected anywhere on the
belt, and when the belt stops, all parts stop.

Performance Measures and Decision Variables. Throughput capacity, delivery

time, and queue lengths (for accumulation conveyors) are performance measures
in conveyor system simulation. Several issues that are addressed in conveyor
analy- sis include conveyor speed, accumulation capacity, and the number of
carriers.

Questions to Be Answered. Common questions that simulation can help answer

in designing and operating a conveyor system are
• What is the minimum conveyor speed that still meets throughput
requirements?
• What is the throughput capacity of the conveyor?
• What is the load delivery time for different activity levels?
• How much queuing is needed on accumulation conveyors?
• How many carriers are needed on a trolley or power-and-free conveyor?
• What is the optimum number of pallets that maximizes productivity in a
recirculating conveyor?

13.4.4 Modeling Single-Section Conveyors

Conveyors used for simple queuing or buffering often consist of a single stretch
or section of conveyor. Loads enter at one end and are removed at the other end.
Load spacing is generally random. These types of conveyors are quite easy to
model, especially using simulation products that provide conveyor constructs. In
ProModel, a conveyor is simply a type of location. The modeler merely defines
the length and speed and states whether the conveyor is an accumulation
conveyor or nonaccumulation conveyor. Since a conveyor is just a location,
routings can be defined to and from a conveyor. Operations can be defined at
either the beginning or end of a conveyor.
If the simulation product being used does not have a conveyor construct, a
simple accumulation conveyor can be modeled as a queue with a delay time
equal to the time it takes to move from the beginning to the end. This can also be
easily done in ProModel. For nonaccumulation conveyors the approach is more
difficult. Henriksen and Schriber (1986) present a simple yet accurate approach
to model- ing single sections of accumulation and nonaccumulation conveyors
with random load spacing and no branching or merging.
While these simplified approaches may be adequate for rough modeling of
single conveyor sections in which parts enter at one end and exit at the other,
they are inadequate for a conveyor system in which parts are continuously
branching and merging onto conveyor sections. This type of system requires
continuous tracking, which, in many discrete-oriented simulation languages,
gets very com- plex or tends to be impractical.
342 Part I Study Chapters

13.4.5 Modeling Conveyor Networks

A conveyor network consists of two or more sections that are connected
together to enable part merging, diverting, and recirculating. In such instances, a
conveyor may have one or more entry points and one or more exit points.
Furthermore, part entry and exit may not always be located at extreme opposite
ends of the conveyor.
Conveyor networks are modeled in ProModel by placing conveyors next to
each other and defining routings from one conveyor to the next. Branching is
lim- ited in ProModel in that entities can enter a conveyor only at the
beginning and exit at the end. This may require breaking a conveyor into
multiple sections to accommodate branching in the middle of a conveyor.
Conveyor networks may provide alternative routes to various destinations.
Part movement time on a conveyor often is determinable only by modeling
the combined effect of the conveying speed, the length of the conveyor, the
load spacing requirements, the connecting conveyor logic, and any conveyor
transfer times. The traffic and conveyor dynamics ultimately determine the
move time.

13.5 Industrial Vehicles

Industrial vehicles include all push or powered carts and vehicles that generally
have free movement. Powered vehicles such as lift trucks are usually utilized for
medium-distance movement of batched parts in a container or pallet. For short
moves, manual or semipowered carts are useful. Single-load transporters are
capable of moving only one load at a time from one location to another. Such
devices are fairly straightforward to model because they involve only a single
source and a single destination for each move. Multiple-load transporters, on the
other hand, can move more than one load at a time from one or more sources to
one or more destinations. Defining the capacity and operation for multiple-load
transporters can be extremely difficult because there are special rules defining
when to retrieve additional loads and when to deliver the loads already on
board. One example of a multiple-load transporter is a picking transporter,
which simply may be a person pushing a cart through a part storage area load-
ing several different part types onto the cart. These parts may then be delivered
to a single destination, such as when filling a customer order, or to several des-
tinations, such as the replenishment of stock along a production line. Towing
vehicles are another example of this type of transporter. A towing vehicle pulls
a train of carts behind it that may haul several loads at once. Towing vehicles
may have a single pickup and drop point for each move similar to a unit-load
transporter; however, they are also capable of making several stops, picking up
multiple loads, and then delivering them to several remote locations. Such an
operation can become extremely complex to incorporate into a generalized
simulation language.
 Chapter 13 Modeling Material Handling Systems 343

13.5.1 Modeling Industrial Vehicles

Modeling an industrial vehicle involves modeling a resource that moves along a
path network. Paths are typically open aisles in which bidirectional movement is
possible and passing is permitted. Some powered vehicles operate on a unidirec-
tional track. Deployment strategies (work searches, idle vehicle parking, and so
on) must be capable of being incorporated into the model, similar to that of an
au- tomated guided vehicle system (AGVS), described later.
Because industrial vehicles are often human-operated, they may take breaks
and be available only during certain shifts.
Common performance measures that are of interest when modeling industrial
vehicles include
• Vehicle utilization.
• Response time.
• Move rate capability.
Decision variables that are tested for industrial vehicles include
• Number of vehicles.
• Task prioritization.
• Empty vehicle positioning.
Typical questions to be answered regarding industrial vehicles are
• What is the required number of vehicles to handle the required activity?
• What is the best deployment of vehicles to maximize utilization?
• What is the best deployment of empty vehicles to minimize response time?

13.6 Automated Storage/Retrieval Systems

An automated storage/retrieval system (AS/RS) consists of one or more auto-
mated storage/retrieval machines that store and retrieve material to and from a
storage facility such as a storage rack. Because it is automated, the system oper-
ates under computer control. The goal of an AS/RS is to provide random, high-
density storage with quick load access, all under computer control.
An AS/RS is characterized by one or more aisles of rack storage having one
or more storage/retrieval (S/R) machines (sometimes called vertical or stacker
cranes) that store and retrieve material into and out of a rack storage system.
Material is picked up for storage by the S/R machine at an input (pickup) station.
Retrieved ma- terial is delivered by the S/R machine to an output (deposit) station
to be taken away. Usually there is one S/R machine per aisle; however, there
may also be one S/R machine assigned to two or more aisles or perhaps even
two S/R machines assigned to a single aisle. For higher storage volume, some
AS/RSs utilize double-deep stor- age, which may require load shuffling to access
loads. Where even higher storage
344 Part I Study Chapters

density is required and longer-term storage is needed, multidepth or deep lane

stor- age systems are used. AS/RSs that use pallet storage racks are usually
referred to as unit-load systems, while bin storage rack systems are known as
miniload systems.
The throughput capacity of an AS/RS is a function of the rack
configuration and speed of the S/R machine. Throughput is measured in terms of
how many sin- gle or dual cycles can be performed per hour. A single cycle is
measured as the average time required to pick up a load at the pickup station,
store the load in a rack location, and return to the pickup station. A dual cycle is
the time required to pick up a load at the input station, store the load in a rack
location, retrieve a load from another rack location, and deliver the load to the
output station. Obviously, there is considerable variation in cycle times due to
the number of different possi- ble rack locations that can be accessed. If the
AS/RS is a stand-alone system with no critical interface with another system,
average times are adequate for design- ing the system. If, however, the system
interfaces with other systems such as front-end or remote-picking stations, it is
important to take into account the vari- ability in cycle times.

13.6.1 Configuring an AS/RS

Configuring an AS/RS depends primarily on the storage/retrieval or throughput
activity that is required and the amount of storage space needed. Other consider-
ations are building constraints in length, width, and height (especially if it is an
existing facility); crane height limitations; and cost factors (a square building is
less costly than a rectangular one).
Configuring an AS/RS is essentially an iterative process that converges on a
solution that meets both total storage requirements and total throughput re-
quirements. Once the number of rack locations is calculated based on storage
requirements, an estimate of the number of aisles is made based on throughput
requirements. This usually assumes a typical throughput rate of, say, 20 dual
cycles per hour and assumes that one S/R machine is assigned to an aisle. If, for
example, the required throughput is 100 loads in and 100 loads out per hour, an
initial configuration would probably be made showing five aisles. If, however, it
was shown using an AS/RS simulator or other analytical technique that the
throughput capacity was only 15 cycles per hour due to the large number of rack
openings required, the number of aisles may be increased to seven or eight and
analyzed again. This process is repeated until a solution is found.
Occasionally it is discovered that the throughput requirement is extremely
low relative to the number of storage locations in the system. In such situations,
rather than have enormously long aisles, a person-aboard system will be used in
which operator-driven vehicles will be shared among several aisles, or perhaps
double-deep storage racks will be used.

Computerized Cycle Time Calculations

It is often thought necessary to simulate an AS/RS in order to determine
through- put capacity. This is because the S/R machine accesses random
bins or rack
Chapter 13 Modeling Material Handling Systems 345

locations, making the cycle time extremely difficult to calculate. The problem is
further compounded by mixed single (pickup and store or retrieve and deposit)
and dual (pickup, storage, retrieval, and deposit) cycles. Activity zoning, in
which items are stored in assigned zones based on frequency of use, also
complicates cycle time calculations. The easiest way to accurately determine
the cycle time for an AS/RS is by using a computer to enumerate the possible
movements of the S/R machine from the pickup and delivery (P&D) stand to
every rack or bin location. This produces an empirical distribution for the
single cycle time. For dual cycle times, an intermediate cycle time—the time to
go from any location to any other location—must be determined. For a rack
10 tiers high and 40 bays
long, this can be 400 × 400, or 160,000, calculations! Because of the
many calculations, sometimes a large sample size is used to develop the
distribution.
Most suppliers of automated storage/retrieval systems have computer programs
for calculating cycle times that can be generated based on a defined configuration
in a matter of minutes.

Analytical Cycle Time Calculations

Analytical solutions have been derived for calculating system throughput based
on a given aisle configuration. Such solutions often rely on simplified assump-
tions about the operation of the system. Bozer and White (1984), for example,
derive an equation for estimating single and dual cycle times assuming (1) ran-
domized storage, (2) equal rack opening sizes, (3) P&D location at the base level
on one end, (4) constant horizontal and vertical speeds, and (5) simultaneous
hor- izontal and vertical rack movement. In actual practice, rack openings are
seldom of equal size, and horizontal and vertical accelerations can have a
significant influence on throughput capacity.
While analytical solutions to throughput estimation may provide a rough
approximation for simple configurations, other configurations become extremely
difficult to estimate. In addition, there are control strategies that may improve
throughput rate, such as retrieving the load on the order list that is closest to the
load just stored or storing a load in an opening that is closest to the next load to
be retrieved. Finally, analytical solutions provide not a distribution of cycle
times but merely a single expected time, which is inadequate for analyzing
AS/RSs that interface with other systems.

AS/RS with Picking Operations

Whereas some AS/RSs (especially unit-load systems) have loads that are not
captive to the system, many systems (particularly miniload systems) deliver bins
or pallets either to the end of the aisle or to a remote area where material is
picked from the bin or pallet, which is then returned for storage. Remote picking
is usually achieved by linking a conveyor system to the AS/RS where loads are
delivered to remote picking stations. In this way, containers stored in any aisle
can be delivered to any workstation. This permits entire orders to be picked at a
single station and eliminates the two-step process of picking followed by order
consolidation.
346 Part I Study Chapters

Where picking takes place is an important issue achieving the highest pro-
ductivity from both AS/RS and picker. Both are expensive resources, and it is
undesirable to have either one waiting on the other.

13.6.2 Modeling AS/RSs

Simulation of AS/RSs has been a popular area of application for simulation. Ford
de- veloped a simulator called GENAWS as early as 1972. IBM developed one
in 1973 called the IBM WAREHOUSE SIMULATOR. Currently, most
simulation of AS/RSs is performed by vendors of the systems. Typical inputs for
precision model- ing of single-deep AS/RSs with each aisle having a captive S/R
machine include
• Number of aisles.
• Number of S/R machines.
• Rack configuration (bays and tiers).
• Bay or column width.
• Tier or row height.
• Input point(s).
• Output point(s).
• Zone boundaries and activity profile if activity zoning is utilized.
• S/R machine speed and acceleration/deceleration.
• Pickup and deposit times.
• Downtime and repair time characteristics.
At a simple level, an AS/RS move time may be modeled by taking a time from a
probability distribution that approximates the time to store or retrieve a load.
More precise modeling incorporates the actual crane (horizontal) and lift
(vertical) speeds. Each movement usually has a different speed and distance to
travel, which means that movement along one axis is complete before
movement along the other axis. From a modeling standpoint, it is usually
necessary to calculate and model only the longest move time.
In modeling an AS/RS, the storage capacity is usually not a consideration
and the actual inventory of the system is not modeled. It would require lots of
over- head to model the complete inventory in a rack with 60,000 pallet
locations. Because only the activity is of interest in the simulation, actual
inventory is ignored. In fact, it is usually not even necessary to model specific
stock keeping units (SKUs) being stored or retrieved, but only to distinguish
between load types insofar as they affect routing and subsequent operations.
Common performance measures that are of interest in simulating an AS/RS
include
• S/R machine utilization.
• Response time.
• Throughput capability.
 Chapter 13 Modeling Material Handling Systems 347

Decision variables on which the modeler conducts experiments include

• Rack configuration and number of aisles.
• Storage and retrieval sequence and priorities.
• First-in, first-out or closest item retrieval.
• Empty S/R machine positioning.
• Aisle selection (random, round robin, or another method).
Typical questions addressed in simulation of an AS/RS include
• What is the required number of aisles to handle the required activity?
• Should storage activity be performed at separate times from retrieval
activity, or should they be intermixed?
• How can dual cycling (combining a store with a retrieve) be maximized?
• What is the best stationing of empty S/R machines to minimize
response time?
• How can activity zoning (that is, storing fast movers closer than slow
movers) improve throughput?
• How is response time affected by peak periods?

13.7 Carousels
One class of storage and retrieval systems is a carousel. Carousels are essentially
moving racks that bring the material to the retriever (operator or robot) rather
than sending a retriever to the rack location.

13.7.1 Carousel Configurations

A carousel storage system consists of a collection of bins that revolve in either
a horizontal or vertical direction. The typical front-end activity on a carousel is
order picking. If carousels are used for WIP storage, bins might enter and
leave the carousel. The average time to access a bin in a carousel is usually
equal to one-half of the revolution time. If bidirectional movement is
implemented, average access time is reduced to one-fourth of the revolution
time. These times can be further re- duced if special storing or ordering schemes
are used to minimize access time.
A variation of the carousel is a rotary rack consisting of independently
operat- ing tiers. Rotary racks provide the added advantage of being able to
position another bin into place while the operator is picking out of a bin from a
different tier.

13.7.2 Modeling Carousels

Carousels are easily modeled by defining an appropriate response time
represent- ing the time for the carousel to bring a bin into position for picking. In
addition to
348 Part I Study Chapters

response times, carousels may have capacity considerations. The current

contents may even affect response time, especially if the carousel is used to store
multiple bins of the same item such as WIP storage. Unlike large AS/RSs,
storage capacity may be an important issue in modeling carousel systems.

13.8 Automatic Guided Vehicle Systems

An automatic guided vehicle system (AGVS) is a path network along which
computer-controlled, driverless vehicles transport loads. AGV systems are usu-
ally used for medium activity over medium distances. If parts are large, they are
moved individually; otherwise parts are typically consolidated into a container
or onto a pallet. Operationally, an AGVS is more flexible than conveyors, which
pro- vide fixed-path, fixed-point pickup and delivery. However, they cannot
handle the high activity rates of a conveyor. On the other extreme, an AGVS is
not as flexi- ble as industrial vehicles, which provide open-path, any-point
pickup and deliv- ery. However, an AGVS can handle higher activity rates and
eliminate the need for operators. AGVSs provide a flexible yet defined path of
movement and allow pickup and delivery between any one of many fixed points,
except for where cer- tain points have been specifically designated as pickup or
drop-off points.
AGVs are controlled by either a central computer, onboard computers, or a
combination of the two. AGVs with onboard microprocessors are capable of
having maps of the system in their memories. They can direct their own routing
and blocking and can communicate with other vehicles if necessary. Some
AGVs travel along an inductive guide path, which is a wire buried a few inches
beneath the floor. Newer systems are non-wire guided. Travel is generally
unidirectional to avoid traffic jams, although occasionally a path might be
bidirectional.
The AGVS control system must make such decisions as what vehicle to
dis- patch to pick up a load, what route to take to get to the pickup point, what to
do if the vehicle gets blocked by another vehicle, what to do with idle
vehicles, and how to avoid collisions at intersections.
AGVs have acceleration and deceleration, and speeds often vary depending
on whether vehicles are full or empty and whether they are on a turn or a stretch.
There is also a time associated with loading and unloading parts. Furthermore,
loaded vehicles may stop at points along the path for operations to be performed
while the load is on the vehicle. One or more vehicles may be in a system, and
more than one system may share common path segments. AGVs stop
periodically for battery recharging and may experience unscheduled failures.
One of the modeling requirements of AGVSs is to accurately describe
the method for controlling traffic and providing anticollision control. This is
usually ac- complished in one of two ways: (1) onboard vehicle sensing or (2)
zone blocking.
Onboard vehicle sensing works by having a sensor detect the presence of a
vehicle ahead and stop until it detects that the vehicle ahead has moved. This is
usually accomplished using a light beam and receiver on the front of each
vehicle with a reflective target on the rear of each.
 Chapter 13 Modeling Material Handling Systems 349

In zone blocking, the guide path is divided into various zones (segments)
that allow no more than one vehicle at a time. Zones can be set up using a
variety of different sensing and communication techniques. When one vehicle
enters a zone, other vehicles are prevented from entering until the current
vehicle occupying the zone leaves. Once the vehicle leaves, any vehicle waiting
for access to the freed zone can resume travel.

13.8.1 Designing an AGVS

When designing an AGV system, the first step is to identify all of the pickup
and drop-off points. Next the path should be laid out. In laying out the guide
path, sev- eral principles of good design should be followed (Askin and
Standridge 1993):
• Travel should be unidirectional in the form of one or more recirculating
loops unless traffic is very light. This avoids deadlock in traffic.
• Pickup stations should be downstream of drop-off stations. This enables
an AGV to pick up a load, if available, whenever a load is dropped off.
• Pickup and deposit stations should generally be placed on spurs unless
traffic is extremely light. This prevents AGVs from being blocked.
• Crossover paths should be used occasionally if measurable reductions in
travel times can be achieved.
Once the path has been configured, a rough estimate is made of the number of
AGVs required. This is easily done by looking at the total travel time required
per hour, dividing it by the number of minutes in an hour (60), and multiplying
it by 1 plus a traffic allowance factor:
Total AGV minutes
AGV = × (1 + Traffic allowance)
60 minutes/hour
The traffic allowance is a percentage factored into the vehicle requirements
to reflect delays caused by waiting at intersections, rerouting due to
congestion, or some other delay. This factor is a function of both poor path
layout and quantity of vehicles and may vary anywhere from 0 in the case of a
single-vehicle system to around 15 percent in congested layouts with
numerous vehicles (Fitzgerald 1985).
The total vehicle minutes are determined by looking at the average required
number of pickups and deposits per hour and converting this into the number of
minutes required for one vehicle to perform these pickups and drop-offs. It is
equal to the sum of the total empty move time, the total full move time, and the
total pickup and deposit time for every delivery. Assuming I pickup points and
J drop-off points, the total vehicle time can be estimated by l
I J
) ) Distance i j
Total vehicle minutes = 2× + Pickupi + Depositj
i =1 j =1 Avg. speedij
× Deliveriesi j
350 Part I Study Chapters

The expression Distancei j

2×
Avg. speedij
implies that the time required to travel to the point of pickup (empty travel time)
is the same as the time required to travel to the point of deposit (full travel time).
This assumption provides only an estimate of the time required to travel to a
point of pickup because it is uncertain where a vehicle will be coming from. In
most cases, this should be a conservative estimate because (1) vehicles usually
follow a work search routine in which the closest loads are picked up first
and (2) vehicles frequently travel faster when empty than when full. A more
accurate way of calcu- lating empty load travel for complex systems is to use
a compound weighted- averaging technique that considers all possible empty
moves together with their probabilities (Fitzgerald 1985).

13.8.2 Controlling an AGVS

A multivehicle AGVS can be quite complex and expensive, so it is imperative
that the system be well managed to achieve the utilization and level of
productiv- ity desired. Part of the management problem is determining the best
deployment strategy or dispatching rules used. Some of these operating
strategies are dis- cussed next.

AGV Selection Rules. When a load is ready to be moved by an AGV and more
than one AGV is available for executing the move, a decision must be made as
to which vehicle to use. The most common selection rule is a “closest rule” in
which the nearest available vehicle is selected. This rule is intended to minimize
empty vehicle travel time as well as to minimize the part waiting time.
Other less frequently used vehicle selection rules include longest idle vehicle
and least uti- lized vehicle.

Work Search Rules. If a vehicle becomes available and two or more parts are
waiting to be moved, a decision must be made as to which part should be moved
first. A number of rules are used to make this decision, each of which can be
effective depending on the production objective. Common rules used for dis-
patching an available vehicle include
• Longest-waiting load.
• Closest waiting load.
• Highest-priority load.
• Most loads waiting at a location.

Vehicle Parking Rules. If a transporter delivers a part and no other parts are
waiting for pickup, a decision must be made relative to the deployment of the
transporter. For example, the vehicle can remain where it is, or it can be sent to a
more strategic location where it is likely to be needed next. If several transport
Chapter 13 Modeling Material Handling Systems 351

vehicles are idle, it may be desirable to have a prioritized list for a vehicle to fol-
low for alternative parking preferences.

Work Zoning. In some cases it may be desirable to keep a vehicle captive to a

particular area of production and not allow it to leave this area unless it has work
to deliver elsewhere. In this case, the transporter must be given a zone boundary
within which it is capable of operating.

13.8.3 Modeling an AGVS

Modeling an AGVS is very similar to modeling an industrial vehicle (which it is
in a sense) except that the operation is more controlled with less freedom of
move- ment. Paths are generally unidirectional, and no vehicle passing is
allowed.
One of the challenges in modeling an AGVS in the past has been finding
the shortest routes between any two stops in a system. Current state-of-the-art
simu- lation software, like ProModel, provides built-in capability to
automatically de- termine the shortest routes between points in a complex
network. Alternatively, the modeler may want to have the capability to explicitly
define a set of paths for getting from one location to another.
Common performance measures that are of interest when modeling AGV
systems include
• Resource utilization.
• Load throughput rate.
• Response time.
• Vehicle congestion.
In addition to the obvious purpose of simulating an AGVS to find out if the
num- ber of vehicles is sufficient or excessive, simulation can also be used to
determine the following:
• Number of vehicles.
• Work search rules.
• Park search rules.
• Placement of crossover and bypass paths.
Typical questions that simulation can help answer include
• What is the best path layout to minimize travel time?
• Where are the potential bottleneck areas?
• How many vehicles are needed to meet activity requirements?
• What are the best scheduled maintenance/recharging strategies?
• Which task assignment rules maximize vehicle utilization?
• What is the best idle vehicle deployment that minimizes response time?
• Is there any possibility of deadlocks?
• Is there any possibility of collisions?
352 Part I Study Chapters

13.9 Cranes and Hoists

Cranes are floor-, ceiling-, or wall-mounted mechanical devices generally used
for short- to medium-distance, discrete movement of material. Cranes utilize a
hoist mechanism for attaching and positioning loads. Aside from bridge and
gantry cranes, most other types of cranes and hoists can be modeled as an
indus- trial vehicle. Since a gantry crane is just a simple type of bridge crane that
is floor- mounted, our discussion here will be limited to bridge cranes. A bridge
crane con- sists of a beam that bridges a bay (wall to wall). This beam or
bridge moves on two tracks mounted on either wall. A retracting hoist unit
travels back and forth under the bridge, providing a total of three axes of
motion (gantry cranes have similar movement, only the runway is floor-
mounted).

13.9.1 Crane Management

Managing crane movement requires an understanding of the priority of loads to
be moved as well as the move characteristics of the crane. One must find the
optimum balance of providing adequate response time to high-priority moves
while maxi- mizing the utilization of the crane. Crane utilization is maximized
when drop-offs are always combined with a nearby pickup. Crane
management becomes more complicated when (as is often the case) two or
more cranes operate in the same bay or envelope of space. Pritsker (1986)
identifies typical rules derived from practical experience for managing bridge
cranes sharing the same runway:
1. Cranes moving to drop points have priority over cranes moving to
pickup points.
2. If two cranes are performing the same type of function, the crane that
was assigned its task earliest is given priority.
3. To break ties on rules 1 and 2, the crane closest to its drop-off point is
given priority.
4. Idle cranes are moved out of the way of cranes that have been given
assignments.
These rules tend to minimize the waiting time of loaded cranes and maximize
crane throughput.

13.9.2 Modeling Bridge Cranes

For single cranes a simple resource can be defined that moves along a path that
is the resultant of the x and y movement of the bridge and hoist. For more
precise modeling or for managing multiple cranes in a runway, it is preferable
to utilize built-in crane constructs. ProModel provides powerful bridge crane
modeling ca- pabilities that greatly simplify bridge crane modeling.
Common performance measures when simulating a crane include
• Crane utilization.
• Load movement rate.
 Chapter 13 Modeling Material Handling Systems 353

• Response time.
• Percentage of time blocked by another crane.
Decision variables that become the basis for experimentation include
• Work search rules.
• Park search rules.
• Multiple-crane priority rules.
Typical questions addressed in a simulation model involving cranes include
• Which task assignment rules maximize crane utilization?
• What idle crane parking strategy minimizes response time?
• How much time are cranes blocked in a multicrane system?

13.10 Robot
Robots are programmable, multifunctional manipulators used for handling mate-
s rial or manipulating a tool such as a welder to process material. Robots are often
classified based on the type of coordinate system on which they are based: cylin-
drical, cartesian, or revolute. The choice of robot coordinate system depends on
the application. Cylindrical or polar coordinate robots are generally more appro-
priate for machine loading. Cartesian coordinate robots are easier to equip with
tactile sensors for assembly work. Revolute or anthropomorphic coordinate ro-
bots have the most degrees of freedom (freedom of movement) and are
especially suited for use as a processing tool, such as for welding or painting.
Because carte- sian or gantry robots can be modeled easily as cranes, our
discussion will focus on cylindrical and revolute robots. When used for
handling, cylindrical or revolute robots are generally used to handle a
medium level of movement activity over very short distances, usually to
perform pick-and-place or load/unload functions. Robots generally move parts
individually rather than in a consolidated load.
One of the applications of simulation is in designing the cell control logic
for a robotic work cell. A robotic work cell may be a machining, assembly,
inspec- tion, or a combination cell. Robotic cells are characterized by a robot
with 3 to 5 degrees of freedom surrounded by workstations. The workstation
is fed parts by an input conveyor or other accumulation device, and parts exit
from the cell on a similar device. Each workstation usually has one or more
buffer positions to which parts are brought if the workstation is busy. Like all
cellular manufactur- ing, a robotic cell usually handles more than one part
type, and each part type may not have to be routed through the same sequence
of workstations. In addi- tion to part handling, the robot may be required to
handle tooling or fixtures.

13.10.1 Robot Control

Robotic cells are controlled by algorithms that determine the sequence of activi-
ties for the robot to perform. This control is developed offline using algorithms
for
354 Part I Study Chapters

selecting what activity to perform. The sequence of activities performed by the

robot can be either a fixed sequence of moves that is continually repeated or a
dy- namically determined sequence of moves, depending on the status of the
cell. For fixed-sequence logic, the robot control software consists of a
sequence of com- mands that are executed sequentially. Dynamic sequence
selection is programmed using if–then statements followed by branches
dependent on the truth value of the conditional statement. System variables
must also be included in the system to keep track of system status, or else the
robot polls the sensors, and so on, of the system each time a status check is
needed.
In developing an algorithm for a cell controller to make these decisions,
the analyst must first decide if the control logic is going to control the robot, the
part, or the workstation. In a part-oriented system, the events associated with
the part determine when decisions are made. When a part finishes an operation,
a routing selection is made and then the robot is requested. In a robot-
oriented cell, the robot drives the decisions and actions so that when a part
completes an operation, it merely sends a signal or sets a status indicator
showing that it is finished. Then when the robot becomes available, it sees that
the part is waiting and, at that mo- ment, the routing decision for the part is
made.

13.10.2 Modeling Robots

In modeling robots, it is sometimes presumed that the kinematics of the robot
need to be simulated. Kinematic simulation is a special type of robot
simulation used for cycle time analysis and offline programming. For discrete
event simulation, it is necessary to know only the move times from every
pickup point to every de- posit point, which usually aren’t very many. This
makes modeling a robot no more difficult than modeling a simple resource.
The advantage to having a specific robot construct in a simulation product is
primarily for providing the graphic ani- mation of the robot. ProModel doesn’t
have a built-in construct specifically for ro- bots, although submodels have
been defined that can be used in other models.
Common performance measures when modeling robots include
• Robot utilization.
• Response time.
• Throughput.
Decision variables that come into play when simulating robots include
• Pickup sequence.
• Task prioritization.
• Idle robot positioning.
Typical questions that simulation can help answer are
• What priority of tasks results in the highest productivity?
• Where is the best position for the robot after completing each particular
drop-off?
 Chapter 13 Modeling Material Handling Systems 355

13.11 Summary
Material handling systems can be one of the most difficult elements to model
using simulation simply because of the sheer complexity. At the same time, the
material handling system is often the critical element in the smooth operation of
a manufacturing or warehousing system. The material handling system should
be designed first using estimates of resource requirements and operating
parameters (speed, move capacity, and so forth). Simulation can then help verify
design deci- sions and fine-tune the design.
In modeling material handling systems, it is advisable to simplify wherever
possible so models don’t become too complex. A major challenge in modeling
conveyor systems comes when multiple merging and branching occur. A chal-
lenging issue in modeling discrete part movement devices, such as AGVs, is
how to manage their deployment in order to get maximum utilization and meet
pro- duction goals.

13.12 Review Questions

1. What impact can the material handling system have on the performance
of a manufacturing system?
2. What is the essential difference between a conveyor and other transport
devices from a modeling standpoint?
3. In material handling simulation, should we be interested in modeling
individual parts or unit loads? Explain.
4. How is the capacity of a conveyor determined?
5. What is the difference between an accumulation and a nonaccumulation
conveyor?
6. What is the difference between fixed spacing and random spacing on a
conveyor?
7. Under what conditions could you model an accumulation conveyor as a
simple queue or buffer?
8. What are typical conveyor design decisions that simulation can help make?
9. What are typical simulation objectives when modeling an AS/RS?
10.When modeling an AS/RS, is there a benefit in modeling the
actual storage positions? Explain.
11.Conceptually, how would you model the movement of a carousel?
12.Draw a logic diagram of what happens from the time an AGV
deposits a load to the time it retrieves another load.
13.When modeling a robot in system simulation, is it necessary to model
the actual kinematics of the robot? Explain.
14.What are the unique characteristics of a bridge crane from a modeling
perspective?
356 Part I Study Chapters

References
Apple, J. M. Plant Layout and Material Handling. 3rd ed. N.Y.: Ronald Press, 1977.
Askin, Ronald G., and C. R. Standridge. Modeling and Analysis of Manufacturing
Systems.
New York: John Wiley & Sons, 1993.
“Automatic Monorail Systems.” Material Handling Engineering, May 1988, p. 95.
Bozer, Y. A., and J. A. White. “Travel-Time Models for Automated Storage/Retrieval
Systems.” IIE Transactions 16, no. 4 (1984), pp. 329–38.
Fitzgerald, K. R. “How to Estimate the Number of AGVs You Need.” Modern
Materials Handling, October 1985, p. 79.
Henriksen, J., and T. Schriber. “Simplified Approaches to Modeling Accumulation and
Non-Accumulating Conveyor Systems.” In Proceedings of the 1986 Winter Simula-
tion Conference, ed. J. Wilson, J. Henricksen, and S. Roberts. Piscataway, NJ: Insti-
tute of Electrical and Electronics Engineers, 1986.
Meyers, Fred E. Plant Layout and Material Handling. Englewood Cliffs, NJ: Regents/
Prentice Hall, 1993.
Pritsker, A. A. B. Introduction to Simulation and Slam II. West Lafayette, IN: Systems
Publishing Corporation, 1986, p. 600.
Tompkins, J. A.; J. A. White; Y. A. Bozer; E. H. Frazelle; J. M. A. Tanchoco; and
J. Trevino. Facilities Planning. 2nd ed. New York: John Wiley & Sons, 1996.
Zisk, B. “Flexibility Is Key to Automated Material Transport System for Manufacturing
Cells.” Industrial Engineering, November 1983, p. 60.
Harrell−Ghosh−Bo I. Study 14. Modeling © The
wden: Simulation Chapters Service McGraw−Hill
Using ProModel, Systems Companies,
Second Edition

C H A P T E R

14 MODELING SERVICE
SYSTEMS

“No matter which line you move to, the other line always moves faster.”
—Unknown

14.1 Introduction
A service system is a processing system in which one or more services are pro-
vided to customers. Entities (customers, patients, paperwork) are routed through
a series of processing areas (check-in, order, service, payment) where resources
(service agents, doctors, cashiers) provide some service. Service systems exhibit
unique characteristics that are not found in manufacturing systems. Sasser,
Olsen, and Wyckoff (1978) identify four distinct characteristics of services that
distin- guish them from products that are manufactured:
1. Services are intangible; they are not things.
2. Services are perishable; they cannot be inventoried.
3. Services provide heterogeneous output; output is varied.
4. Services involve simultaneous production and consumption; the service
is produced and used at the same time.
These characteristics pose great challenges for service system design and man-
agement, particularly in the areas of process design and staffing. Having dis-
cussed general modeling procedures common to both manufacturing and service
system simulation in Chapter 7, and specific modeling procedures unique to
manufacturing systems in Chapter 12, in this chapter we discuss design and
operating considerations that are more specific to service systems. A description
is given of major classes of service systems. To provide an idea of how simula-
tion might be performed in a service industry, a call center simulation example is
presented.

357
358 Part I Study Chapters

14.2 Characteristics of Service Systems

Service systems represent a class of processing systems where entities (cus-
tomers, orders, work, and so forth) are routed through a series of service stations
and waiting areas. Although certain characteristics of service systems are
similar to manufacturing systems, service systems have some unique
characteristics. The aspects of service systems that involve work-flow
processing (orders, paperwork, records, and the like) and product delivery are
nearly identical to manufacturing and will not be repeated here. Those aspects
of service systems that are most different from manufacturing systems are
those involving customer processing. Many of the differences stem from the
fact that in service systems, often both the entity being served and the
resource performing the service are human. Humans have much more
complex and unpredictable behavior than parts and machines. These special
characteristics and their implications for modeling are described here:

• Entities are capricious. System conditions cause humans to change their

minds about a particular decision once it has been made. Customer
reactions to dissatisfactory circumstances include balking, jockeying, and
reneging. Balking occurs when a customer attempts to enter a queue, sees
that it is full, and leaves. Jockeying is where a customer moves to another
queue that is shorter in hopes of being served sooner. Reneging, also
called abandonment, is where a customer enters a waiting line or area,
gets tired of waiting, and leaves. Modeling these types of situations can
become complex and requires special modeling constructs or the use of
programming logic to describe the behavior.
• Entity arrivals are random and fluctuate over time. Rather than
scheduling arrivals as in production, customers enter most service
systems randomly according to a Poisson process (interarrival times are
exponentially distributed). Additionally, the rate of arrivals often changes
depending on the time of day or the day of the week. The fluctuating
pattern of arrivals usually repeats itself daily, weekly, or sometimes
monthly. Accurate modeling of these arrival patterns and cycles is
essential to accurate analysis. Having a fluctuating arrival rate makes
most service simulations terminating simulations with focus on peak
activities and other changes of interest as opposed to steady-state
behavior.
• Resource decisions are complex. Typically resource allocation and task
selection decisions are made according to some general rule (like first-
come, first-served). In service systems, however, resources are intelligent
and often make decisions based on more state-related criteria. An
increase in the size of a waiting line at a cashier, for example, may
prompt a new checkout lane to open. A change in the state of an entity (a
patient in recovery requiring immediate assistance) may cause a resource
(a nurse or doctor) to interrupt its current task to service the entity. The
flexibility to respond to state changes is made possible because the
resources are
 Chapter 14 Modeling Service Systems 359

humans and therefore capable of making more complex decisions than

machines. Because service personnel are often cross-trained and activity
boundaries are flexible, resources can fill in for each other when needed.
Modeling the complex behavior of human resources often requires the
use of if–then logic to define decision rules.
• Resource work pace fluctuates. Another characteristic of human
resources is that work pace tends to vary with time of day or work
conditions.
A change in the state of a queue (like the number of customers in line)
may cause a resource (a cashier) to work faster, thereby reducing
processing time. A change in the state of the entity (such as the length
of waiting time) may cause a resource to work faster to complete the
professional service. A change in the state of the resource (like fatigue
or learning curve) may change the service time (slower in the case
of fatigue, faster in the case of a learning curve). To model this variable
behavior, tests must be continually made on state variables in the system
so that resource behavior can be linked to the system state.
• Processing times are highly variable. Service processes vary considerably
due to the nature of the process as well as the fact that the entity and the
server are both human. Consequently, processing times tend to be highly
variable. From a modeling standpoint, processing times usually need to
be expressed using some probability distribution such as a normal or beta
distribution.
• Services have both front-room and back-room activities. In front-room
activities, customer service representatives meet with customers to take
orders for a good or service. In the back room, the activities are carried
out for producing the service or good. Once the service or good is
produced, it is either brought to the customer who is waiting in the front
room or, if the customer has gone, it is delivered to a remote site.

14.3 Performance Measures

The ultimate objectives of a service organization might include maximizing
prof- its or maximizing customer satisfaction. However, these measures for
success are considered external performance criteria because they are not
completely deter- mined by any single activity. Simulation modeling and
analysis help evaluate those measures referred to as internal performance
criteria—measures tied to a specific activity. Simulation performance
measures are both quantitative and time-based and measure the efficiency and
the effectiveness of a system configu- ration and operating logic. Examples of
internal performance measures are wait- ing times, hours to process an
application, cost per transaction, and percentage of time spent correcting
transaction errors. Collier (1994) uses the term interlinking to define the
process of establishing quantitative, causal relationships such as these to
external performance measures. He argues that interlinking can be a
360 Part I Study Chapters

powerful strategic and competitive weapon. Here are some typical internal per-
formance measures that can be evaluated using simulation:
• Service time.
• Waiting time.
• Queue lengths.
• Resource utilization.
• Service level (the percentage of customers who can be promptly serviced,
without any waiting).
• Abandonment rate (the percentage of impatient customers who leave the
system).

14.4 Use of Simulation in Service Systems

The use of simulation in service industries has been relatively limited in the past,
despite the many areas of application where simulation has proven beneficial:
health care services (hospitals, clinics), food services (restaurants, cafeterias),
and financial services (banks, credit unions) to name a few. In health care
services, Zilm et al. (1983) studied the impact of staffing on utilization and
cost; and Hancock et al. (1978) employed simulation to determine the optimal
number of beds a facility would need to meet patient demand. In food
services, Aran and Kang (1987) designed a model to determine the optimal
seating configuration for a fast-food restaurant, and Kharwat (1991) used
simulation to examine restaurant and delivery operations relative to staffing
levels, equipment layout, work flow, customer service, and capacity. The use of
simulation in the service sector contin- ues to expand.
Even within manufacturing industries there are business or support
activities similar to those found in traditional service industries. Edward J.
Kane of IBM observed (Harrington 1991),

Just taking a customer order, moving it through the plant, distributing these require-
ments out to the manufacturing floor—that activity alone has thirty sub-process
steps to it. Accounts receivable has over twenty process steps. Information
processing is a whole discipline in itself, with many challenging processes
integrated into a single total activity. Obviously, we do manage some very complex
processes separate from the manufacturing floor itself.

This entire realm of support processes presents a major area of potential applica-
tion for simulation. Similar to the problem of dealing with excess inventory in
manufacturing systems, customers, paperwork, and information often sit idle in
service systems while waiting to be processed. In fact, the total waiting time for
entities in service processes often exceeds 90 percent of the total flow time.
The types of questions that simulation helps answer in service systems can
be categorized as being either design related or management related. Here are
some
Chapter 14 Modeling Service Systems 361

typical design and management decisions that can be addressed by simulation:

Design Decisions
1. How much capacity should be provided in service and waiting areas?
2. What is the maximum throughput capability of the service system?
3. What are the equipment requirements to meet service demand?
4. How long does it take to service a customer?
5. How long do customers have to wait before being serviced?
6. Where should the service and waiting areas be located?
7. How can work flow and customer flow be streamlined?
8. What effect would information technology have on reducing non-
value-added time?
Management Decisions
1. What is the best way to schedule personnel?
2. What is the best way to schedule appointments for customers?
3. What is the best way to schedule carriers or vehicles in transportation
systems?
4. How should specific jobs be prioritized?
5. What is the best way to deal with emergency situations when a needed
resource is unavailable?
Because service systems are nearly always in a state of transition, going
from one activity level to another during different periods of the day or week,
they rarely reach a steady state. Consequently, we are frequently interested in
analyzing the transient behavior of service systems. Questions such as “How
long is the transient cycle?” or “How many replications should be run?” become
very important. Over- all performance measures may not be as useful as the
performance for each partic- ular period of the transient cycle. An example
where this is true is in the analysis of resource utilization statistics. In the types
of service systems where arrival patterns and staff schedules fluctuate over the
activity cycle (such as by day or week), the av- erage utilization for the entire
cycle is almost meaningless. It is much more infor- mative to look at the
resource utilization for each period of the activity cycle.
Most design and management decisions in service systems involve
answering questions based on transient system conditions, so it is important that
the results of the simulation measure transient behavior. Multiple replications
should be run, with statistics gathered and analyzed for different periods of the
transient cycle. In an attempt to simplify a simulation model, sometimes there
is a temptation to model only the peak period, which is often the period of
greatest interest. What is overlooked is the fact that the state of the system
prior to each period and the length of each period significantly impact the
performance measures for any particular period, including the peak period.
ProModel provides a periodic reporting option that allows statistics to be
gathered by periods. This provides a more complete picture of system activity
over the entire simulation.
362 Part I Study Chapters

14.5 Applications of Simulation in Service Industries

Some of the primary applications of simulation in service industries are
process design, method selection, system layout, staff planning, and flow
control.

14.5.1 Process Design

Because of the number of options in customer or paper processing as well as the
flexibility of largely human resources, service systems can be quite fluid, allow-
ing them to be quickly and easily reconfigured. Simulation helps identify config-
urations that are more efficient. Consider a process as simple as a car wash
service that provides the following activities:
• Payment.
• Wash.
• Rinse.
• Dry.
• Vacuum.
• Interior cleaning.
How many ways can cars be processed through the car wash? Each activity
could be done at separate places, or any and even all of them could be combined
at a sta- tion. This is because of the flexibility of the resources that perform each
operation and the imparticularity of the space requirements for most of the
activities. Many of the activities could also be performed in any sequence.
Payment, vacuuming, and interior cleaning could be done in almost any
order. The only order that possibly could not change easily is washing,
rinsing, and drying. The other con- sideration with many service processes is
that not all entities receive the same services. A car wash customer, for
example, may forgo getting vacuum service or interior cleaning. Thus it is
apparent that the mix of activities in service processes can vary greatly.
Simulation helps in process design by allowing different processing
sequences and combinations to be tried to find the best process flow. Modeling
process flow is relatively simple in most service industries. It is only when
shifts, resource pools, and preemptive tasks get involved that it starts to become
more challenging.

14.5.2 Method Selection

Method selection usually accompanies process design. When determining what
activities will be performed and how the process should be broken up,
alternative methods for performing the activities are usually taken into
consideration. Some of the greatest changes in the methods used in service
industries have come about as a result of advances in information technology.
Routine banking is being replaced by automated teller machines (ATMs).
Shopping is being conducted over the Internet. Electronic document
management systems are replacing paper
 Chapter 14 Modeling Service Systems 363

document processing. Processing of orders and other documents that previously

took weeks now takes only days or hours.
Automation of service processes presents challenges similar to the
automation of manufacturing processes. If automating a service process speeds
up a particular activity but does not minimize the overall processing time, it is
not effective and may even be creating waste (such as large pools of waiting
entities).

14.5.3 System Layout

An important consideration in designing a service system is the layout of the fa-
cility, especially if the building construction is going to be based on the system
layout. For many service operations, however, the layout is easily changed as it
may involve only rearranging desks and changing offices. Human resources and
desktop computers are much easier to move around than an anchored 200-ton
press used in sheet-metal processing. Still, a good layout can help provide a
more streamlined flow and minimize the amount of movement for both
customers and personnel.
The way in which work areas are laid out can have a significant impact on
customer satisfaction and processing efficiency. In some systems, for example,
multiple servers have individual queues for customers to wait before being
served. This can cause customers to be served out of order of arrival and result
in jockeying and customer discontent. Other systems provide a single input
queue that feeds multiple servers (queuing for a bank teller is usually designed
this way). This ensures customers will be serviced in the order of arrival. It may
cause some reneging, however, if grouping all customers in a single queue
creates the percep- tion to an incoming customer that the waiting time is long.

14.5.4 Staff Planning

A major decision in nearly every service operation pertains to the level and type
of staffing to meet customer demand. Understaffing can lead to excessive
waiting times and lost or dissatisfied customers. Overstaffing can result in
needless costs for resources that are inadequately utilized.
Related to staffing levels is the staff type. In service operations, personnel
are frequently cross-trained so that alternative resources may perform any given
task. One objective in this regard is to make the best use of resources by
allowing higher-skilled resources to fill in occasionally when lower-skilled
workers are unavailable.
Modeling staffing requirements is done by defining the pattern of incoming
customers, specifying the servicing policies and procedures, and setting a trial
staffing level. If more than one skill level is capable of performing a task, the list
and priority for using these alternative resources need to be specified.
After running the simulation, waiting times, abandonment counts, and re-
source utilization rates can be evaluated to determine if the optimum conditions
have been achieved. If results are unacceptable, either the incoming pattern, the
364 Part I Study Chapters

service force, or the servicing policies and procedures can be modified to run
additional experiments.

14.5.5 Flow Control

Flow control is to service systems what production control is to
manufacturing systems. Service system operations planners must decide how to
allow customers, documents, and so on to flow through the system. As in
manufacturing systems, customers and information may be pushed or pulled
through the system. By lim- iting queue capacities, a pull system can reduce the
total number of customers or items waiting in the system. It also reduces the
average waiting time of customers or items and results in greater overall
efficiency.
Fast-food restaurants practice pull methods when they keep two or three
food items (like burgers and fries) queued in anticipation of upcoming orders.
When the queue limit is reached, further replenishment of that item is
suspended. When a server withdraws an item, that is the pull signal to the cook
to replenish it with another one. The lower the inventory of prepared food
items, the more tightly linked the pull system is to customer demand. Excessive
inventory results in de- teriorating quality (cold food) and waste at the end of the
day.

14.6 Types of Service Systems

Service systems cover a much broader range than manufacturing systems. They
range from a pure service system to almost a pure production system. Customers
may be directly involved in the service process or they may not be involved at
all. The classification of service systems presented here is based on operational
char- acteristics and is adapted, in part, from the classification given by
Schmenner (1994):
• Service factory.
• Pure service shop.
• Retail service store.
• Professional service.
• Telephonic service.
• Delivery service.
• Transportation service.
A description of each in terms of its operating characteristics is given next.

14.6.1 Service Factory

Service factories are systems in which customers are provided services using
equipment and facilities requiring low labor involvement. Consequently, labor
costs are low while equipment and facility costs are high. Service factories
 Chapter 14 Modeling Service Systems 365

usually have both front-room and back-room activities with total service being
provided in a matter of minutes. Customization is done by selecting from a
menu of options previously defined by the provider. Waiting time and service
time are two primary factors in selecting the provider. Convenience of location
is another important consideration. Customer commitment to the provider is
low because there are usually alternative providers just as conveniently located.
Examples include banks (branch operations), restaurants, copy centers, bar-
bers, check-in counters of airlines, hotels, and car rental agencies.

14.6.2 Pure Service Shop

In a pure service shop, service times are longer than for a service factory. Service
customization is also greater. Customer needs must be identified before service
can be provided. Customers may leave the location and return later for pickup,
check- ing on an order, payment, or additional service. Price is often determined
after the service is provided. Although front-room activity times may be short,
back-room activity times may be long, typically measured in hours or days. The
primary con- sideration is quality of service. Delivery time and price are of
secondary impor- tance. The customer’s ability to describe the symptoms
and possible service requirements are helpful in minimizing service and
waiting times.
When customers arrive, they usually all go through some type of check-in
activity. At this time, a record (paperwork or computer file) is generated for the
customer and a sequence of service or care is prescribed. The duration of the ser-
vice or the type of resources required may change during the process of
providing service because of a change in the status of the entity. After the
service is pro- vided, tests may be performed to make sure that the service is
acceptable before releasing the entity from the facility. If the results are
acceptable, the customer and the record are matched and the customer leaves
the system.
Examples include hospitals, repair shops (automobiles), equipment rental
shops, banking (loan processing), Department of Motor Vehicles, Social Security
offices, courtrooms, and prisons.

14.6.3 Retail Service Store

In retail services, the size of the facility is large in order to accommodate many
customers at the same time. Customers have many product options from which
to choose. Retail services require a high degree of labor intensity but a low
degree of customization or interaction with the customer. Customers are
influenced by price more than service quality or delivery time. Customers are
interested in convenient location, assistance with finding the products in the
store, and quick checkout. Total service time is usually measured in minutes.
When customers arrive in a retail shop, they often get a cart and use that
cart as a carrier throughout the purchasing process. Customers may need
assistance from customer service representatives during the shopping process.
Once the cus- tomer has obtained the merchandise, he or she must get in line
for the checkout
366 Part I Study Chapters

process. For large items such as furniture or appliances, the customer may have
to order and pay for the merchandise first. The delivery of the product may
take place later.
Examples include department stores, grocery stores, hardware stores, and
convenience stores.

14.6.4 Professional Service

Professional services are usually provided by a single person or a small group
of experts in a particular field. The service is highly customized and provided by
expensive resources. Duration of the service is long, extremely variable, and
difficult to predict because customer involvement during the process is highly
variable.
Processing may be performed by a single resource or multiple resources.
When the customer arrives, the first process is diagnostic. Usually an expert re-
source evaluates the service needed by the customer and determines the type of
service, the estimated service time, and the cost. This diagnosis then dictates
what resources are used to process the order. The duration of the service or the
type of resources required may change during the process of providing
service. This is usually a result of the customer’s review of the work. After the
service is provided, a final review with the customer may be done to make sure
that the service is ac- ceptable. If the results are acceptable, the customer and
the record are matched and the customer leaves the system.
Examples include auditing services, tax preparation, legal services, architec-
tural services, construction services, and tailor services.

14.6.5 Telephonic Service

Telephonic services or teleservicing are services provided over the telephone.
They are unique in that the service is provided without face-to-face contact
with the customer. The service may be making reservations, ordering from a
catalog, or pro- viding customer support. In a telephonic service system, there
are a number of issues to address, including
• Overflow calls—the caller receives a busy signal.
• Reneges—the customer gets in but hangs up after a certain amount of
time if no assistance is received.
• Redials—a customer who hangs up or fails to get through calls again.
The most important criterion for measuring effectiveness is delivery time. The
cus- tomer is interested in getting the service or ordering the product as quickly
as possi- ble. The customer’s ability to communicate the need is critical to the
service time.
Calls usually arrive in the incoming call queue and are serviced based on
the FIFO rule. Some advanced telephone systems allow routing of calls into
multiple queues for quicker service. Processing of a call is done by a single
resource. Service duration depends on the nature of the service. If the service is
an ordering
 Chapter 14 Modeling Service Systems 367

process, then the service time is short. If the service is a technical support
process, then the service time may be long or the call may require a callback
after some research.
Examples include technical support services (hotlines) for software or hard-
ware, mail-order services, and airline and hotel reservations.

14.6.6 Delivery Service

Delivery services involve the ordering, shipping, and delivery of goods, raw
materials, or finished products to points of use or sale. Customers may accept
deliveries only within certain time schedules. In practice, there are often other
constraints besides time windows. Certain sequences in deliveries may be
inflex- ible. Customers are interested in convenient, fast delivery. If the products
that are delivered are perishable or fragile goods, the quality of the products
delivered is also important to the customer.
Deliveries begin with the preparation of the product and loading of the
product on the delivery resources. Determination of the best routing decisions
for drivers may depend on the number or proximity of customers waiting for the
product.

14.6.7 Transportation Service

Transportation services involve the movement of people from one place to an-
other. A fundamental difference between transportation and delivery systems is
that people are being transported rather than goods. Another important
difference is that the routes in transportation services tend to be fixed, whereas
the routes in delivery services are somewhat flexible. Customers are interested
in convenient, fast transportation. Cost of transportation plays a significant role
in the selection of the service. Because set schedules and routes are used in
transportation, cus- tomers expect reliable service.
Two types of systems are used in transportation: (1) multiple pickup and
drop-off points and (2) single pickup and drop-off points. In multiple pickup and
drop-off point systems, customers enter and leave the transportation vehicle
inde- pendently. In single pickup and drop-off transportation, customers all enter
at one place and are dropped off at the same destination.
Examples include airlines, railroads, cruise lines, mass transit systems, and
limousine services.

14.7 Simulation Example: A Help Desk Operation

This section, based on an article by Singer and Gasparatos (1994), presents an
ex- ample of a simulation project performed to improve a help desk operation.
This project illustrates the flexibility of processing and how variable some of
the data can be. Even for existing service systems, radical changes can be made
with little disruption that can dramatically improve performance.
368 Part I Study Chapters

14.7.1 Background
Society Bank’s Information Technology and Operations (ITO) group offers a
“help desk” service to customers of the ITO function. This service is offered to
both in- ternal and external customers, handling over 12,000 calls per month.
The client services help desk provides technical support and information on a
variety of tech- nical topics including resetting passwords, ordering PC
equipment, requesting phone installation, ordering extra copies of internal
reports, and reporting main- frame and network problems. The help desk acts as
the primary source of commu- nication between ITO and its customers. It
interacts with authority groups within ITO by providing work and support when
requested by a customer.
The old client services help desk process consisted of (1) a mainframe help
desk, (2) a phone/local area network help desk, and (3) a PC help desk. Each of
the three operated separately with separate phone numbers, operators, and facili-
ties. All calls were received by their respective help desk operators, who
manually logged all information about the problem and the customer, and then
proceeded to pass the problem on to an authority group or expert for resolution.
Because of acquisitions, the increased use of information technologies, and
the passing of time, Society’s help desk process had become fragmented and
layered with bureaucracy. This made the help desk a good candidate for a
process redesign. It was determined that the current operation did not have a set
of clearly defined goals, other than to provide a help desk service. The
organizational boundaries of the current process were often obscured by the fact
that much of the different help desks’ work overlapped and was consistently
being handed off. There were no process per- formance measures in the old
process, only measures of call volume. A proposal was made to consolidate the
help desk functions. The proposal also called for the intro- duction of automation
to enhance the speed and accuracy of the services.

14.7.2 Model Description

The situation suggested a process redesign to be supported by simulation of the
business processes to select and validate different operational alternatives.
Detailed historical information was gathered on call frequencies, call arrival
patterns, and length of calls to the help desk. This information was obtained
from the help desk’s database, ASIM. Table 14.1 summarizes the call
breakdown by

TABLE 14.1 Types of Calls for Help Desk

Percen Percent Percent

Time Period Password Reset Device Reset Inquiries t Level Level Level 2
1 1A
7 A.M.–11 A.M. 11.7% 25.7% 8.2% 45.6% 4.6% 47.3%
11 A.M.–2 P.M. 8.8 29.0 10.9 48.7 3.6 44.3
2 P.M.–5 P.M. 7.7 27.8 11.1 46.6 4.4 45.8
5 P.M.–8 P.M. 8.6 36.5 17.8 62.9 3.7 32.2
Average 9.9% 27.5% 9.9% 47.3% 4.3% 48.4%
 Chapter 14 Modeling Service Systems 369

call level. Level 1 calls are resolved immediately by the help desk, Level 1A
calls are resolved later by the help desk, and Level 2 calls are handed off to an
author- ity group for resolution.
Historically, calls averaged 2.5 minutes, lasting anywhere from 30 seconds
to 25 minutes. Periodically, follow-up work is required after calls that ranges
from 1 to 10 minutes. Overall, the help desk service abandonment rate was 4 to
12 per- cent (as measured by the percentage of calls abandoned), depending on
staffing levels.
The help desk process was broken down into its individual work steps and
owners of each work step were identified. Then a flowchart that described the
process was developed (Figure 14.1). From the flowchart, a computer simulation
model was developed of the old operation, which was validated by comparing
actual performance of the help desk with that of the simulation’s output. During
the 10-day test period, the simulation model produced results consistent with
those of the actual performance. The user of the model was able to define such
model parameters as daily call volume and staffing levels through the use of the
model’s Interact Box, which provided sensitivity analysis.
Joint requirements planning (JRP) sessions allowed the project team to col-
lect information about likes, dislikes, needs, and improvement suggestions from
users, customers, and executives. This information clarified the target goals of
the process along with its operational scope. Suggestions were collected and
priori- tized from the JRP sessions for improving the help desk process. Internal
bench- marking was also performed using Society’s customer service help desk
as a ref- erence for performance and operational ideas.

FIGURE 14.1
Customer problem, Client notification
Flow diagram query, or change and escalation
of client
services.

Automated problem Automated warning

recognition Help
desk recognition

Customer self-service

Automated resolution

Qualified support assistance

Expert support assistance

370 Part I Study Chapters

A target process was defined as providing a single-source help desk (“one-

stop shopping” approach) for ITO customers with performance targets of
• 90 percent of calls to be answered by five rings.
• Less than 2 percent abandonment rate.
Other goals of the target process were to enhance the user’s perception of the
help desk and to significantly reduce the time required to resolve a customer’s
request. A combination of radical redesign ideas (reengineering) and
incremental change ideas (TQM) formed the nucleus of a target help desk
process. The redesigned process implemented the following changes:
• Consolidate three help desks into one central help desk.
• Create a consistent means of problem/request logging and resolution.
• Introduce automation for receiving, queuing, and categorizing calls for
resetting terminals.
• Capture information pertaining to the call once at the source, and, if the
call is handed off, have the information passed along also.
• Use existing technologies to create a hierarchy of problem resolution
where approximately 60 percent of problems can be resolved immediately
without using the operators and approximately 15 percent of the calls can
be resolved immediately by the operators.
• Create an automated warning and problem recognition system that detects
and corrects mainframe problems before they occur.
The original simulation model was revisited to better understand the current
customer service level and what potential impact software changes, automation,
and consolidation would have on the staffing and equipment needs and opera-
tional capacity. Simulation results could also be used to manage the expectations
for potential outcomes of the target process implementation.
Immediate benefit was gained from the use of this application of simulation
to better understand the old operational interrelationships between staffing, call
vol- ume, and customer service. Figure 14.2 shows how much the
abandonment rate
Calls abandoned

FIGURE 14.2 700 calls per day

0.20
Abandonment rates 0.18 650 calls per day
for alternative staffing 0.16 600 calls per day
levels. 0.14 550 calls per day
0.12 500 calls per day
0.10 450 calls per day
0.08 400 calls per day
0.06
0.04
0.02
05 6 7 8 9 10
Operators staffed
 Chapter 14 Modeling Service Systems 371

will change when the average daily call volume or the number of operators
varies. The importance of this graph is realized when one notices that it becomes
increas- ingly harder to lower the abandonment rate once the number of
operators increases above seven. Above this point, the help desk can easily
handle substantial increases in average daily call volume while maintaining
approximately the same abandonment rate.
After modeling and analyzing the current process, the project team
evaluated the following operational alternatives using the simulation model:
• The option to select from a number of different shift schedules so that
staffing can easily be varied from current levels.
• The introduction of the automated voice response unit and its ability to
both receive and place calls automatically.
• The ability of the automated voice response unit to handle device resets,
password resets, and system inquiries.
• The incorporation of the PC and LAN help desks so that clients with
PC-related problems can have their calls routed directly to an available
expert via the automated voice response unit.
• The ability to change the response time of the ASIM problem-
logging system.
Additionally, two alternative staffing schedules were proposed. The alterna-
tive schedules attempt to better match the time at which operators are available
for answering calls to the time the calls are arriving. The two alternative
schedules reduce effort hours by up to 8 percent while maintaining current
service levels.
Additional results related to the Alternative Operations simulation model were
• The automated voice response unit will permit approximately 75 percent
of PC-related calls to be answered immediately by a PC expert directly.
• Using Figure 14.2, the automated voice response unit’s ability to aid in
reducing the abandonment rate can be ascertained simply by estimating
the reduction in the number of calls routed to help desk operators and
finding the appropriate point on the chart for a given number of operators.
• Improving the response time of ASIM will noticeably affect the operation
when staffing levels are low and call volumes are high. For example, with
five operators on staff and average call volume of 650 calls per day, a
25 percent improvement in the response time of ASIM resulted in a
reduction in the abandonment rate of approximately 2 percent.

14.7.3 Results
The nonlinear relationship between the abandonment rate and the number of op-
erators on duty (see Figure 14.2) indicates the difficulty in greatly improving
per- formance once the abandonment rate drops below 5 percent. Results
generated from the validated simulation model compare the impact of the
proposed staffing changes with that of the current staffing levels. In addition,
the analysis of the
372 Part I Study Chapters

effect of the automated voice response unit can be predicted before implementa-
tion so that the best alternative can be identified.
The introduction of simulation to help desk operations has shown that it can
be a powerful and effective management tool that should be utilized to better
achieve operational goals and to understand the impact of changes. As the au-
tomation project continues to be implemented, the simulation model can greatly
aid management and the project team members by allowing them to intelligently
predict how each new phase will affect the help desk.

14.8 Summary
Service systems provide a unique challenge in simulation modeling, largely due
to the human element involved. Service systems have a high human content in
the process. The customer is often involved in the process and, in many cases, is
the actual entity being processed. In this chapter we discussed the aspects that
should be considered when modeling service systems and suggested ways
in which different situations might be modeled. We also discussed the
different types of service systems and addressed the modeling issues associated
with each. The ex- ample case study showed how fluid service systems can be.

14.9 Review Questions

1. What characteristics of service systems make them different from
manufacturing systems?
2. What internal performance measures are linked to customer satisfaction?
3. Why are service systems more reconfigurable than
manufacturing systems?
4. Identify a service system where the customer is not part of the process.
5. What is abandonment or reneging in simulation terminology?
6. Explain how simulation was used to create the abandonment rate chart
shown in Figure 14.2.
7. What are three questions that simulation might help answer in designing
bus routes for a city bus line?
8. Is a transportation system entity-driven or resource-driven? Explain.
9. Describe conceptually how you would model jockeying in a simulation
model.

References
Aran, M. M., and K. Kang. “Design of a Fast Food Restaurant Simulation Model.” Simu-
lation. Norcross, GA: Industrial Engineering and Management Press, 1987.
Collier, D. A. The Service/Quality Solution. Milwaukee: ASQC Quality Press, 1994.
Chapter 14 Modeling Service Systems 373

Hancock, W.; D. C. Magerlein; R. H. Stores; and J. B. Martin. “Parameters Affecting

Hospital Occupancy and Implications for Facility Sizing.” Health Services
Research 13, 1978: pp. 276–89.
Harrington, J. H. Business Process Improvement: The Breakthrough Strategy for Total
Quality, Productivity, and Competitiveness. New York: McGraw-Hill, 1991.
Harrington, J. H. Business Process Improvement. New York: McGraw-Hill, 1994.
Kharwat, A. K. “Computer Simulation: An Important Tool in the Fast Food Industry.”
Proceedings of the 1991 Winter Simulation Conference, eds. B. Nelson, W. D.
Kelton, and G. M. Clark. Piscataway, NJ: Institute of Electrical and Electronics
Engineers, 1991.
Sasser, W. E.; R. P. Olsen; and D. D. Wyckoff. Management of Service Operations.
Boston: Allyn & Bacon, 1978, pp. 8–21.
Schmenner, Roger W. Plant and Service Tours in Operations Management. 4th ed. New
York: MacMillan, 1994.
Singer, R., and A. Gasparatos. “Help Desks Hear Voice.” Software Magazine, February
1994, pp. 24–26.
Zilm, F., and R. Hollis. “An Application of Simulation Modeling to Surgical Intensive
Care Bed Needs Analysis.” Hospital and Health Services Administration, Sept/Oct.
1983, pp. 82–101.
Harrell−Ghosh−Bo II. 1. Introduction to © The
wden: Simulation Labs ProModel 6.0 McGraw−Hill
Using ProModel, Companies,
Second Edition

L A B

1 INTRODUCTION TO
PROMODEL 6.0

Imagination is the beginning of creation. You imagine what you desire, you will
what you imagine and at last you create what you will.
—George Bernard Shaw

ProModel (Production Modeler) by PROMODEL Corporation is a simulation tool

for modeling various manufacturing and service systems. Manufacturing systems
such as job shops, conveyors, transfer lines, mass production, assembly lines,
flexi- ble manufacturing systems, cranes, just-in-time systems, kanban systems,
and so forth can be modeled by ProModel. Service systems such as hospitals, call
centers, warehouse operations, transportation systems, grocery/department stores,
informa- tion systems, customer service management, supply chains, logistic
systems, and other business processes also can be modeled efficiently and quickly
with ProModel. ProModel is a powerful tool in the hands of engineers and
managers to test various alternative designs, ideas, and process maps before
actual implementa- tion. Improvements in existing systems or the design of new
systems can be mod- eled and tested before committing any money, time, or
other resources. Various operating strategies and control alternatives can be
compared and analyzed. Typ- ically, most people use simulation tools to
accurately predict and improve system performance by modeling the actual
location (such as a plant floor, a bank lobby, or an emergency room) or an
abstract process. Through testing various what-if
scenarios, one can determine the best (optimum) way to conduct operations.
ProModel concentrates on resource utilization, production capacity, produc-
tivity, inventory levels, bottlenecks, throughput times, and other performance
measures.
ProModel is a discrete event simulator and is intended to model discrete
sys- tems. Also, it is designed to model systems where events happen at definite
points in time. The time resolution is controllable and ranges from 0.01 hours to
0.00001 seconds.

377
378 Part II Labs

ProModel uses a graphical user interface (GUI). It is a true Windows (XP,

Me, 2000, 98, 95, or NT) based simulation tool and utilizes all the Windows fea-
tures such as a standard user interface, multitasking, built-in printer drivers, and
“point and click” operation. ProModel has an online help system and a trainer.
Background graphics in .BMP, .PCX, .WMF, and .GIF formats can be im-
ported into ProModel. Input data from spreadsheets can be seamlessly read into
ProModel for quick and easy updates. Also, multiple-scenario analysis is
possible using various input data files with the same model. Other model data
may be read
from or written to general text files.

L1.1 ProModel 6.0 Opening Screen

ProModel can be installed in one of the following ways:
a. Runtime/evaluation package.
b. Standard package.
c. Student package.
d. Network package.
FIGURE L1.1
ProModel opening screen (student package).
 Lab 1 Introduction to ProModel 6.0 379

ProModel’s opening screen (student package) is shown in Figure L1.1. There are
six items (buttons) in the opening menu:
1. Open a model: Allows models created earlier to be opened.
2. Install model package: Copies to the specified destination directory all of
the files contained in a model package file.
3. Run demo model: Allows one of several example models packed
with the software to be run.
4. www.promodel.com: Allows the user to connect to the PROMODEL
Corporation home page on the World Wide Web.
5. SimRunner: This new addition to the ProModel product line evaluates
your existing simulation models and performs tests to find better ways
to achieve desired results. A design of experiment methodology is
used in SimRunner. For a detailed description of SimRunner, please
refer to Lab 11.
6. Stat::Fit: This module allows continuous and/or discrete distributions
to be fitted to a set of input data automatically. For a detailed discussion
on the modeling of input data distribution, please refer to Lab 6.

L1.2 Simulation in Decision Making

ProModel is an excellent decision support tool and is used to help plan and
make improvements in many areas of manufacturing and service industries.
Click on Run demo model from the shortcut panel and select any model that
looks interesting to run. You can also use the main menu to select File → Open
and then choose a model from the Demos subdirectory. To run a model, select
Simulation → Run. To stop a simulation prematurely, select Simulation → End
Simulation.

Problem Statement
At a call center for California Cellular, customer service associates are
employed to respond to customer calls and complaints. On average, 10
customers call per hour. The time between two calls is exponentially
distributed with a mean of six minutes. Responding to each call takes a time
that varies from a low of 2 min- utes to a high of 10 minutes, with a mean of
6 minutes. If the company had a policy that
a. The average time to respond to a customer call should not be any more
than six minutes, how many customer service associates should be
employed by the company?
b. The maximum number of calls waiting should be no more than five,
how many customer service associates should be employed by the
company?
380 Part II Labs

L1.2.1 Average Waiting Time

First we build a simulation model with one customer service associate
answering all customer calls (Figure L1.2). The average time a customer has to
wait before reaching the customer service associate is 18.92 minutes (Figure
L1.3). This is a much longer wait than the company policy of six minutes
(average).
If we employ two customer service associates (Figure L1.4), we would like
to figure out what the average wait would be. The average wait drops down to
5.9 minutes (Figure L1.5), which is clearly a much more acceptable result.
Hence the decision recommended to management will be to hire two associates.

FIGURE L1.2
California Cellular with one customer service agent.

FIGURE L1.3
Customer waiting time statistics with one customer service agent.

FIGURE L1.4
California Cellular with two customer service agents.
 Lab 1 Introduction to ProModel 6.0 381

FIGURE L1.5
Customer waiting time statistics with two customer service agents.

FIGURE L1.6
Number of calls waiting with one customer service agent.

FIGURE L1.7
Number of calls waiting with two customer service agents.

L1.2.2 Maximum Queue Length

Now we want to evaluate the policy of no more than five calls waiting for re-
sponse at any time. First we look at the results (Figure L1.6) of having one cus-
tomer service associate working at a time. The maximum number of customers
waiting for response is 18. This is clearly not an acceptable situation.
If we change the number of associates to two, the results obtained are given
in Figure L1.7. The maximum number of calls waiting is five. This is acceptable
according to the company policy of no more than five calls waiting. When we
graph the number of incoming calls waiting for the duration of the simulation
run of 500 hours (Figure L1.8), there were only three occasions of five calls
waiting. Hence, we recommend to management to hire two associates.
382 Part II Labs

FIGURE L1.8
Graph of number of customers waiting versus simulation run time.

L1.3 Exercises
1. How do you open an existing simulation model?
2. What is SimRunner? How can you use it in your simulation analysis?
3. What does the Stat::Fit package do? Do you need it when building a
simulation model?
4. At the most, how many locations, entities, and types of resources can be
modeled using the student version of ProModel?
5. Open the Manufacturing Cost model from the Demos subdirectory and
run the model three different times to find out whether one, two, or three
operators are optimal for minimizing the cost per part (the cost per part is
displayed on the scoreboard during the simulation). Selecting Model
Parameters, you can change the number of operators from the Simulation
menu by double-clicking on the first parameter (number of operators)
and entering 1, 2, or 3. Then select Run from the Model Parameters
dialog. Each simulation will run for 15 hours.
6. Without knowing how the model was constructed, can you give a
rational explanation for the number of operators that resulted in the least
cost?
7. Go to the ProModel website on the Internet (www.promodel.com). What
are some of the successful real-world applications of the ProModel
software? Is ProModel applied only to manufacturing problems?
Harrell−Ghosh−Bo II. 2. ProModel World © The
wden: Simulation Labs View, Menu, and McGraw−Hill
Using ProModel, Tutorial Companies,
Second Edition

L A B

2 PROMODEL WORLD
VIEW, MENU,
AND TUTORIAL

I only wish that ordinary people had an unlimited capacity for doing harm; then
they might have an unlimited power for doing good.
—Socrates (469–399 B.C.)

In this lab, Section L2.1 introduces you to various commands in the ProModel
menu. In Section L2.2 we discuss the basic modeling elements in a ProModel
model file. Section L2.3 discusses some of the innovative features of ProModel.
Section L2.4 refers to a short tutorial on ProModel in a PowerPoint presentation
format. Some of the material describing the use and features of ProModel
has been taken from the ProModel User Guide as well as ProModel’s online help
system.

L2.1 Introduction to the ProModel Menu

In this section we introduce you to the title bar and various actions and
commands in the ProModel menu bar. In subsequent chapters we will use many
of these com- mands in various examples and you will have an opportunity to
master them. We encourage you to use the ProModel’s online help to learn more
about all the menu bar commands.

L2.1.1 The Title and the Menu Bars

The title bar at the top of the screen (Figure L2.1) holds the name of the model
doc- ument currently being created. Until the document is given a name, the
title bar shows “ProModel”. Once the document is given a title (like Paula’s
Production Shop) in the general information dialog box, the title bar shows
“ProModel— (Paula’s Production Shop).”

383
384 Part II Labs

FIGURE L2.1
The title and the
menu bars.

FIGURE L2.2
The File
menu.

The menu bar, just below the title bar (Figure L2.1), is used to call up
menus, or lists of tasks. The menu bar of the ProModel screen displays the
commands you use to work with ProModel. Some of the items in the menu, like
File, Edit, View, Tools, Window, and Help, are common to most Windows
applications. Others such as Build, Simulation, and Output provide commands
specific to program- ming in ProModel. In the following sections we describe
all the menu commands and the tasks within each menu.

L2.1.2 File Menu

The File menu (Figure L2.2) allows the user to open a new model, open an exist-
ing model, merge two or more submodels into one, save the current model, and
import models created in earlier versions of ProModel. It also allows you to
view a text version of the model and print either the model text file or the
graphic layout of the model. The printer setup can be modified from this menu.
Model packages can be created for distribution to others and can also be
installed using this menu. The last item on this menu allows the user to exit the
ProModel environment and go back to the Windows (XP, Me, 2000, 98, 95, or
NT) environment.

L2.1.3 Edit Menu

The Edit menu (Figure L2.3) contains selections for editing the contents of edit
tables and logic windows. The selections available from this menu will change
according to the module from which the Edit menu is selected. The selections
also
 Lab 2 ProModel World View, Menu, and Tutorial 385

FIGURE L2.3 FIGURE L2.4

The Edit The Build menu.
menu.

vary according to the currently selected window. The Edit menu is active only
when a model file is open.

L2.1.4 Build Menu

The Build menu (Figure L2.4) consists of all of the modules for creating and edit-
ing a model, which include the following basic and optional modules:

Basic Modules
Locations Processing
Entities Arrivals

Optional Modules
Path Networks Macros
Resources Subroutines
Shifts Arrival Cycles
Cost Table Functions
Attributes User Distributions
Variables External Files
Arrays Streams
386 Part II Labs

FIGURE L2.5
General Information dialog box.

In addition, two more modules are available in the Build menu: General
Informa- tion and Background Graphics.

General Information. This dialog box (Figure L2.5) allows the user to specify
the name of the model, the default time unit, the distance unit, and the graphic
library to be used. The model’s initialization and termination logic can also be
specified using this dialog box. A Notes window allows the user to save
informa- tion such as the analyst’s name, the revision date, any assumptions
made about the model, and so forth. These notes can also be displayed at the
beginning of a sim- ulation run.

Background Graphics. The Background Graphics module (Figure L2.6) allows

the user to create a unique background for the model using the tools in the
graph- ics editor. An existing background can also be imported from another
application such as AutoCAD.
Generally, most graphics objects are laid out in front of the grid. Large ob-
jects as well as imported backgrounds are placed behind the grid.

L2.1.5 Simulation Menu

The Simulation menu (Figure L2.7) controls the execution of a simulation and
contains options for running a model, defining model parameters, and defining
and running scenarios.
ProModel also has an add-on feature: SimRunner.
 Lab 2 ProModel World View, Menu, and Tutorial 387

FIGURE L2.6
Background Graphics dialog box.

FIGURE L2.8 FIGURE L2.9

FIGURE L2.7
The Output The Tools menu.
The Simulation menu.
menu.

L2.1.6 Output Menu

The Output menu (Figure L2.8) starts the ProModel Output Processor for
viewing model statistics. It also allows the user to view the trace, which was
generated dur- ing simulation model runtime.

L2.1.7 Tools Menu

The Tools menu (Figure L2.9) contains various utilities as follows:
• Graphics Editor: For creating, editing, and modifying graphic icons.
• Stat::Fit: For fitting empirical distributions to a set of user data.
388 Part II Labs

• Expression Search: A search-and-replace feature for finding or

replacing expressions throughout a model.
• Options: The paths for model files, the graphic library, output results, and
auto saves are specified in this dialog box. The time between auto saves
is also specified here.
• Customize: With this utility one can add any tools (viz. Dashboard, MPA,
ProClare, Prosetter, ProStat, or Quick Bar), or any other Windows
executable files to the Tools Menu.
• QuickBar: QuickBar is a versatile tool that can make your work in
ProModel much faster. It allows you to remove buttons, add custom
ProModel buttons, or add custom buttons launching other applications.

L2.1.8 View Menu

The View menu (Figure L2.10) contains selections for setting up the model view-
ing environment. These settings are used whenever ProModel is started.
The Zoom submenu (Figure L2.11) allows the model to be displayed from
25 percent magnification to 400 percent magnification or any other user-
specified custom magnification.
The Layout Settings submenu is shown in Figure L2.12. The grid settings
allow the properties of the grids to be changed. The background and routing path
colors can also be changed using this submenu. The various editing preferences
are shown in the Edit Tables submenu (Figure L2.13).

FIGURE L2.10 FIGURE L2.11

The View menu. The Zoom menu.
 Lab 2 ProModel World View, Menu, and Tutorial 389

FIGURE L2.12 FIGURE L2.13

The Layout Settings submenu. Editing preferences in ProModel.

FIGURE L2.14 FIGURE L2.15

The Help menu.
The Window menu.

L2.1.9 Window Menu

The Window menu (Figure L2.14) allows you to arrange the windows (or
iconized windows) that are currently displayed on the screen so that all windows
are visible at once. It also lets you bring any individual window to the front of
the display.

L2.1.10 Help Menu

The Help menu (Figure L2.15) accesses the ProModel Online Help System
and provides access to the ProModel Tutorial (getting started). Access to the
PROMODEL Corporation website is also provided here. The index is an alpha-
betic list of all the help topics in the online help system. The main help topics
are categorized as follows:
• Common procedures.
• Overview of ProModel.
• Main menus.
• Shortcut menu.
• Model elements (entities, resources, locations, path networks, and so on).
• Logic elements (variables, attributes, arrays, expressions, and so forth).
• Statements (GET, JOIN, and the like).
390 Part II Labs

• Functions.
• Customer support—telephone, pager, fax, e-mail, online file transfer,
and so on.
To quickly learn what is new in ProModel Version 6.0, go to the Help →
Index menu and type “new features” for a description of the latest features of the
product.

L2.2 Basic Modeling Elements

In this section we introduce the various basic modeling elements in ProModel.
In Lab 3 you will actually build your first ProModel simulation model. The
basic modeling elements in ProModel are
a. Locations
b. Entities
c. Arrivals
d. Processing
Click Build from the menu bar to access these modeling elements (Figure L2.4).
The ProModel Student Version 6.0 limits the user to no more than 20 loca-
tions, five entity types, five resource types, five attributes, and 10 RTI parameters
in a simulation model. If more capability is required for special projects, ask your
instructor to contact the PROMODEL corporation about faculty or network ver-
sions of the software.

L2.2.1 Locations
Locations represent fixed places in the system where entities are routed for pro-
cessing, delay, storage, decision making, or some other activity. We need some
type of receiving locations to hold incoming entities. We also need processing
locations where entities have value added to them. To build locations:
a. Left-click on the desired location icon in the Graphics toolbox. Left-click
in the layout window where you want the location to appear.
b. A record is automatically created for the location in the Locations
edit table (Figure L2.16).
c. Clicking in the appropriate box and typing in the desired changes can
now change the name, units, capacity, and so on. Note that in Lab 3 we
will actually fill in this information for an example model.

L2.2.2 Entities
Anything that a model can process is called an entity. Some examples are parts
or widgets in a factory, patients in a hospital, customers in a bank or a grocery
store, and travelers calling in for airline reservations.
 Lab 2 ProModel World View, Menu, and Tutorial 391

FIGURE L2.16
The Locations edit screen.

To build entities:
a. Left-click on the desired entity graphic in the Entity Graphics toolbox.
b. A record will automatically be created in the Entities edit
table (Figure L2.17).
c. Moving the slide bar in the toolbox can then change the name. Note that
in Lab 3 we will actually fill in this information for an example model.

L2.2.3 Arrivals
The mechanism for defining how entities enter the system is called arrivals.
Enti- ties can arrive singly or in batches. The number of entities arriving at a
time is called the batch size (Qty each). The time between the arrivals of
successive enti- ties is called interarrival time (Frequency). The total number of
batches of arrivals is termed Occurrences. The batch size, time between
successive arrivals, and total number of batches can be either constants or
random (statistical distributions). Also, the first time that the arrival pattern is to
begin is termed First Time.
To create arrivals:
a. Left-click on the entity name in the toolbox and left-click on the location
where you would like the entities to arrive (Figure L2.18).
b. Enter the various required data about the arrival process. Note that in
Lab 3 we will actually fill in this information for an example model.
392 Part II Labs

FIGURE L2.17
The Entities edit table.

FIGURE L2.18
The Arrivals edit table.

L2.2.4 Processing
Processing describes the operations that take place at a location, such as the
amount of time an entity spends there, the resources it needs to complete
process- ing, and anything else that happens at the location, including selecting
an entity’s next destination.
 Lab 2 ProModel World View, Menu, and Tutorial 393

FIGURE L2.19
The Process edit
table.

To create processing we need to do the following:

a. Left-click on the entity name in the toolbar and then left-click on the
desired beginning location (Figure L2.19).
b. Left-click on the destination location. A processing record is created.
c. To add multiple routing lines to the same record, left-click on the
Add Routing button in the toolbox.
d. To route the part to exit, left-click on the Route to Exit button in the
toolbox. Note that in Lab 3 we will actually fill in this information for an
example model.

L2.3 Innovative Features in ProModel

In this section we describe some of the innovative features in ProModel. These
features help automate the model-building process, eliminate the need to remem-
ber command syntax, and all but eliminate unintentional errors.

L2.3.1 Logic Builder

The Logic Builder (Figure L2.20) is a tool that makes it easier to create valid
logic statements without having to remember keywords, syntax, required
arguments, or model element names. It takes you through the process of
creating statements or expressions, as well as providing point-and-click access
to every element defined in your model. The Logic Builder knows the syntax of
every statement and func- tion, allowing you to define logic simply by filling in
the blanks.
394 Part II Labs

FIGURE L2.20
The Logic Builder tool
menu.

When the Logic Builder is open from a logic window, it remains on the
screen until you click the Close button or close the logic window or table from
which it was invoked. This allows you to enter multiple statements in a logic
window and even move around to other logic windows without having to
constantly close and reopen the Logic Builder. However, the Logic Builder
closes automatically after pasting to a field in a dialog box or edit table or to an
expression field because you must right-click anyway to use the Logic Builder in
another field.
You can move to another logic window or field while the Logic Builder is
still up by right clicking in that field or logic window. The Logic Builder is then
reset with only valid statements and elements for that field or window, and it
will paste the logic you build into that field or window. Some of the commonly
used logic statements available in ProModel are as follows:
• WAIT: Used for delaying an entity for a specified duration at a location,
possibly for processing it.
• STOP: Terminates the current replication and optionally displays a message.
• GROUP: Temporarily consolidates a specified quantity of similar entities
together.
• LOAD: Temporarily attaches a specified quantity of entities to the current
entity.
 Lab 2 ProModel World View, Menu, and Tutorial 395

• INC: Increments a variable, array element, or attribute by the value of a

specified numeric expression.
• UNGROUP: Separates entities that were grouped using the GROUP statement.
• MOVE: Moves the entity to the end of the queue in the specified time.
• VIEW: Changes the view of the layout window.
• GRAPHIC: Changes the entity’s current picture (graphic).
• IF THEN ELSE: Executes a block of statements if the condition is true.
• WAIT UNTIL: Delays the processing of the current logic until the condition
is true.
• MOVE FOR: Moves the entity to the next location, in the specified time.
• SPLIT: Splits the entity into a specified number of entities.
• PAUSE: Causes the execution of simulation to pause until the user selects
the Resume option.

L2.3.2 Dynamic Plots

Dynamic plots enable you to graphically observe and record statistical informa-
tion about the performance of model elements during run time. When the
simula- tion model is running, it needs to be paused (Simulation → Pause
Simulation). With the model in the pause mode select Dynamic Plots → New
from the Infor- mation menu as in Figure L2.21.
The dynamic plots dialog contains a factors list, four panels, and several
but- ton controls. The factors list (Figure L2.22) provides each of the available
model factors from your model, and the panels (Figure L2.23) display
performance graphs for the factors you select (ProModel Help, 2001
PROMODEL Corporation).

Button Controls
• Save: Saves a copy of all model data—from the time you start the graphic
display to when you click save—to an Excel spreadsheet.
• Snapshot: Saves a copy of currently displayed, graphed model data to
an Excel spreadsheet.
• Grid: Turns the main panel grid lines on and off.
• Multi-line: Displays a combined graph of panels 1, 2, and 3.
• Refresh: Redraws the graph.

FIGURE L2.21
Dynamic Plots menu.
396 Part II Labs

FIGURE L2.22
Dynamic Plot edit
table.

FIGURE L2.23
Dynamic Plot of the
current value of WIP.
Lab 2 ProModel World View, Menu, and Tutorial 397

Right-Click Menus
The right-click menu for the graphic display is available for panels 1, 2, and 3,
and the main panel. When you right-click in any of these panels, the right-click
menu appears.

Panels 1, 2, and 3
• Move Up: Places the graph in the main panel.
• Clear Data: Removes the factor and its graph from panel 1, 2, or 3 and
the main panel. If you created a multi-line graph, Clear Data removes
the selected line from the graph and does not disturb the remaining graph
lines.
• Line Color: Allows you to assign a specific line color to the graph.
• Background Color: Allows you to define a specific background color
for panels 1, 2, and 3.

Main Panel
• Clear All Data: Removes all factors and graphs from panels 1, 2, 3,
and the main panel.
• Remove Line 1, 2, 3: Deletes a specific line from the main panel.
• Line Color: Allows you to assign a specific line color to the graph.
• Background Color: Allows you to define a specific background color
for panels 1, 2, and 3.
• Grid Color: Allows you to assign a specific line color to the grid.

L2.3.3 Customize
Customize
You can add direct links to applications and files right on your ProModel toolbar.
Create a link to open a spreadsheet, a text document, or your favorite calculator
(Figure L2.24).
To create or modify your Custom Tools menu, select Tools → Customize
from your ProModel menu bar. This will pull up the Custom Tools dialog
window. The Custom Tools dialog window allows you to add, delete, edit, or
rearrange the menu items that appear on the Tools drop-down menu in
ProModel.

L2.3.4 Quick Bar

Overview
QuickBar is a versatile tool that can make your work in ProModel much faster
(Figure L2.25). This tool is similar to the Windows Taskbar. You can move the
bar around your screen or dock it on one side. Each button on the toolbar
resembles an associated action in ProModel. You can jump straight to the Build
Locations module, or open a new model with the click of a button.
398 Part II Labs

FIGURE L2.24
Adding Calculator to the Customized Tools menu.

FIGURE L2.25
The QuickBar task bar.

QuickBar is fully customizable. QuickBar allows you to remove buttons,

add custom ProModel buttons, or add custom buttons launching other
applications (ProModel Help, 2001 PROMODEL Corporation).

System Button
Selecting the System button brings up a menu with the following options:
• Auto-Hide: The Auto-Hide feature is used when QuickBar is in the
docked state. If docked, and the Auto-Hide is on, QuickBar will shrink, so
that only a couple of pixels show. When your pointer touches these visible
pixels, the QuickBar will appear again.
• Docking Position: The Docking Position prompt allows you to “dock” the
QuickBar along one side of your screen, or leave it floating.
• Customize: Access the customize screen by clicking the System button,
then choose “Customize. . . .” Once in the Customize dialog, you can add
or remove toolbars, add or remove buttons from the toolbars, show or
hide toolbars, or move buttons up or down on the toolbar.
 Lab 2 ProModel World View, Menu, and Tutorial 399

• About: The About option will display information about QuickBar.

• Close QuickBar: The Close QuickBar option will close QuickBar, but
will not change any customizing you may have made to QuickBar.

L2.4 A Tutorial on ProModel 6.0

A tutorial on ProModel is included in the accompanying CD along with the
ProModel software (Figure L2.26). Click on the lower right button to run the
ProModel tutorial. Microsoft PowerPoint is needed to view the tutorial.
This tutorial is meant to familiarize the user with various features of Pro-
Model and its strengths. The file named tutorial.ppt is in a PowerPoint presenta-
tion format and will execute by itself. The tutorial takes approximately 20
minutes to run and is divided into 10 major steps. Slides for each of the 10
steps also include animation that shows the model-building process clearly:
1. Start new model
2. Background graphic
3. Locations
4. Entities
5. Path networks

FIGURE L2.26
Tutorial on ProModel.
400 Part II Labs

6. Resources
7. Processing
8. Arrivals
9. Run simulation
10.View output

L2.5 Exercises
1. Identify the ProModel menu where you will
find the following items:
a. Save As
b. Delete
c. View Trace
d. Shifts
e. Index
f. General Information
g. Options
h. Printer Setup
i. Processing
j. Scenarios
k. Tile
l. Zoom
2. Which of the following is not a valid
ProModel menu or submenu item?
a. AutoBuild
b. What’s This?
c. Merge
d. Merge Documents
e. Snap to Grid
f. Normal
g. Paste
h. Print Preview
i. View Text
3. Some of the following are not valid ProModel
element names. Which ones?
a. Activities
b. Locations
c. Conveyors
d. Queues
e. Shifts
f. Station
g. Server
h. Schedules
i. Arrivals
j. Expressions
 Lab 2 ProModel World View, Menu, and Tutorial 401

k. Variables
l. Create
4. What are some of the valid logic statements used in ProModel?
5. What are some of the differences between the following logic
statements:
a. Wait versus Wait Until.
b. Move versus Move For.
c. Pause versus Stop.
d. View versus Graphic.
e. Split versus Ungroup.
6. Describe the functions of the following items in the ProModel Edit menu:
a. Delete
b. Insert
c. Append
d. Move
e. Move to
f. Copy Record
g. Paste Record
7. Describe the differences between the following items in the ProModel
View menu:
a. Zoom vs. Zoom to Fit Layout
b. Show Grid vs. Snap to Grid
Harrell−Ghosh−Bo II. 3. Running a © The
wden: Simulation Labs ProModel McGraw−Hill
Using ProModel, Simulation Companies,
Second Edition

L A B

3 RUNNING A PROMODEL
SIMULATION

As far as the laws of mathematics refer to reality, they are not certain; and as far
as they are certain, they do not refer to reality.
—Albert Einstein

Lab 3 provides some experience running ProModel simulations before building

your first simulation model using ProModel in Lab 4. The example model used
in this lab is of the ATM system that was simulated in Chapter 3 with a
spreadsheet. Lab 3 demonstrates the efficiency with which systems can be
simulated with ProModel.

L3.1 ATM System Specifications and Problem Statement

In a moment you will load and run a ProModel simulation of an automatic teller
machine (ATM) system described as follows:
Customers arrive to use an ATM at an average interarrival time of 3.0 minutes expo-
nentially distributed. When customers arrive to the system, they join a queue to wait
for their turn on the ATM. The queue has the capacity to hold an infinite number of
cus- tomers. Customers spend an average of 2.4 minutes, exponentially distributed,
at the ATM to complete their transactions, which is called the service time at the
ATM.

The objective is to simulate the system to determine the expected waiting time
for customers in the queue (the average time customers wait in line for the ATM)
and the expected time in the system (the average time customers wait in the
queue plus the average time it takes them to complete their transaction at the
ATM).
This is the same ATM system simulated by spreadsheet in Chapter 3 but
with a different objective. The Chapter 3 objective was to simulate only the first
25 cus- tomers arriving to the system. Now no such restriction has been applied.
This new

403
404 Part II Labs

objective provides an opportunity for comparing the simulated results with those
computed using queuing theory, which was presented in Section 2.9.3.
Queuing theory allows us to compute the exact values for the expected time
that customers wait in the queue and in the system. Given that queuing theory
can be used to get exact answers, why are we using simulation to estimate the
two ex- pected values? There are two parts to the answer. First, it gives us an
opportunity to measure the accuracy of simulation by comparing the
simulation output with the exact results produced using queuing theory. Second,
most systems of interest are too complex to be modeled with the mathematical
equations of queuing the- ory. In those cases, good estimates from simulation
are valuable commodities when faced with expensive decisions.

L3.1.1 Queuing Theory’s Answer to the ATM System

We learned in Chapter 2 that queuing theory can be used to calculate the steady-
state or long-term expected values of particular performance measures. A
system reaches steady state after it has been running awhile with no changes in
the con- ditions influencing the system. After a stream of customers arrives to
the ATM over time, the system will begin to reach steady state, which means
that the sta- tistical distributions that describe the output of the system stabilize.
The steady- state topic is covered in detail in Chapter 9.
Using the queuing theory equations from Section 2.9.3, the expected time
customers wait in the queue is 9.6 minutes and the expected amount of time cus-
tomers spend in the system is 12.0 minutes. Let’s use a ProModel simulation to
estimate these values.

L3.1.2 ProModel’s Answer to the ATM System

The ProModel model of the ATM system is provided with the Student ProModel
CD accompanying the textbook. Load the ATM system simulation model using
the File option on the ProModel menu bar across the top of the screen. Click on
File and Open, and then select the Lab3_1_2 ATM System.mod file from the CD.
Begin the simulation by pressing the F10 function key. The animation is very
informative and is more interesting to watch than was the Excel spreadsheet sim-
ulation of Chapter 3 (Figure L3.1).
The ProModel simulation is programmed to pause the simulation and
display progress messages. To continue the simulation after reading a message,
press the OK button at the bottom of the message (Figures L3.2 and L3.3).
The simulation results of an average 9.47 minutes in the queue and an aver-
age of 11.86 minutes in the system (Figure L3.4) are close to the steady-state
expected values of 9.6 minutes in the queue and 12.0 minutes in the system
computed using queuing theory. You can get closer to the exact values if needed.
Chapter 9 discusses how to achieve a desired level of accuracy.
ProModel displays a prompt at the end of the simulation asking if you want
to collect statistics; select “No” for now (Figure L3.5). ProModel automatically
 Lab 3 Running a ProModel Simulation 405

FIGURE L3.1
ATM simulation in
progress. System
events are animated
and key performance
measures are
dynamically updated.

FIGURE L3.2
The simulation
clock shows 1 hour
and 20 minutes (80
minutes) to process
the first 25 customers
arriving to the system.
The simulation takes
only a second of your
time to process 25
customers.

FIGURE L3.3
ATM simulation on its
15,000th customer and
approaching steady
state.
406 Part II Labs

FIGURE L3.4
ATM simulation after
reaching steady
state.

FIGURE L3.5
ATM simulation at
its end.

collects a multitude of statistics over the course of the simulation. You will learn
this feature in Lab 4.
The simulation required only a minute of your time to process 19,496 cus-
tomers. In Lab 4, you will begin to see how easy it is to build models using Pro-
Model as compared to building them with spreadsheets.

L3.2 Exercises
1. The values obtained for average time in queue and average time in
system from the ATM ProModel simulation of the first 25 customers
processed represent a third set of observations that can be combined
with the observations for the same performance measures presented in
Table 3.3 of Section 3.5.3 in Chapter 3 that were derived from two
 Lab 3 Running a ProModel Simulation 407

replications of the spreadsheet simulation. The ProModel output

represents a third replication of the simulation.
a. What must be true in order for the ProModel output to be counted as
a third replication?
b. Compute new estimates for the average time in queue and average
time in system for the first 25 customers processed by combining the
appropriate observations from the three replications (two spreadsheet
replications and one ProModel replication). Do you think your new
estimates are better than the previous estimates of 1.39 minutes for
the average time in queue and 3.31 minutes for average time in
system from Table 3.3? Why?
2. Select Locations from the ProModel Build menu with the Lab3_1_2 ATM System.mod file loaded.
Notice that the Capacity (Cap.) field for the ATM_Queue location is set to INFINITY in the Locations
Edit Table. The Cap. field defines the maximum number of entities that can simultaneously occupy the
location. In this case, an infinite number of entities can occupy the location. Also, notice that FIFO (first-
in, first-out) appears in the Rules field for the ATM_Queue location. FIFO indicates that entities waiting
for the ATM are processed through the ATM_Queue in the order that they arrived to the location. Are
these assumptions of queuing theory? Which assumption is the least realistic? What would you program
into the ProModel model to make it a more realistic simulation of an ATM system?
3. Select Arrivals from the ProModel Build menu with the Lab3_1_2 ATM System.mod file loaded. The
first two fields in the Arrivals Edit Table declare which entities are to arrive into the simulation and
where they are to arrive. In this case, the entities are named ATM_Customer. They arrive to the
ATM_Queue location. Notice that the Frequency field is set to E(3.0). The Frequency field controls the
interarrival time of entities, which is exponentially distributed with a mean of 3.0 minutes, E(3.0), for
the ATM system. Which column in Table 3.2 of the spreadsheet simulation in Chapter 3 corresponds to
this Frequency field?
4. Select Processing from the ProModel Build menu with the Lab3_1_2 ATM System.mod file loaded.
After the ATM_Customer arrives to the ATM_Queue and waits for its turn at the automatic teller
machine, it is routed to the ATM location. The customer’s transaction time at the ATM is modeled with
the Wait E(2.4) statement under the Operation field of the processing record for the ATM_Customer
at the ATM location. Which column in Table 3.2 of the spreadsheet simulation in Chapter 3 corresponds
to this Wait E(2.4) statement in the Operation field?
Harrell−Ghosh−Bo II. 4. Building © The
wden: Simulation Labs Your First McGraw−Hill
Using ProModel, Model Companies,
Second Edition

L A B

4 BUILDING YOUR
FIRST MODEL

Knowing is not enough; we must apply. Willing is not enough; we must do.
—Johann von Goethe

In this lab we build our first simulation model using ProModel. In Section L4.1
we describe some of the basic concepts of building your first ProModel
simulation model. Section L4.2 introduces the concept of queue in ProModel.
Section L4.3 lets us build a model with multiple locations and multiple entities.
In Section L4.4 we show how to modify an existing model and add more
locations to it. Finally, in Section L4.5 we show how variability in arrival time
and customer service time affect the performance of the system.

L4.1 Building Your First Simulation Model

In this section we describe how you can build your very first simulation model
using ProModel software. We introduce the concepts of locations, entities, entity
arrivals, processes, and routing.
Customers visit the neighborhood barbershop Fantastic Dan for a haircut.
The customer interarrival time is exponentially distributed with an average of
10 minutes. Dan (the barber) takes anywhere from 8 to 10 minutes, uniformly
dis- tributed (mean and half-width of 9 and 1 minute respectively) for each
haircut. This time also includes the initial greetings and the transaction of
money at the end of the haircut. Run the simulation model for one day (480
minutes). Find these answers:
a. About how many customers does Dan process per day?
b. What is the average number of customers waiting to get a haircut?
What is the maximum?

409
410 Part II Labs

FIGURE L4.1
General Information
for the Fantastic
Dan simulation
model.

c. What is the average time spent by a customer in the

salon?
d. What is the utilization of Barber Dan?
e. What is the maximum and average
number of customers waiting for a
haircut?
From the menu bar select File → New. In the General Information panel
(Figure L4.1) fill in the title of the simulation model as “Fantastic Dan.” Fill in
some of other general information about the model like the time and distance
units. Click OK to proceed to define the locations.
From the menu bar select Build → Locations. Define two locations—
Waiting_for_Barber and Barber_Dan (Figure L4.2). Note that the first location
is actually a region (it is the icon that looks like a square box). A region is a
boundary used to represent a location’s area. When the model is running the
region is not visible. The icon selected for the second location is actually called
operator. We changed its name to Barber_Dan (Name column in the Location
table).
Check off the New button on the Graphics panel (Figure L4.3) and click the
button marked Aa. Click on the location icon in the Layout panel. The name of
the location (Barber_Dan) appears on the location icon.
Define the entity (Figure L4.4) and change its name to Customer. Define
the processes and the routings (Figures L4.5 and L4.6) the customers go
through at the barbershop. All customers arrive and wait at the location
Waiting_for_Barber. Then they are routed to the location Barber_Dan. At this
location the barber performs the haircut, which takes an amount of time
uniformly distributed between 8 and 10 minutes or Uniform (9,1). Use the step-
by-step procedure detailed in section L2.2.4 to create the process and routing
tables graphically.
 Lab 4 Building Your First Model 411

FIGURE L4.2
Defining locations Waiting_ for_Barber and BarberDan.

FIGURE L4.3
The Graphics panel.
412 Part II Labs

FIGURE L4.4
Define the entity—Customer.

FIGURE L4.5
Process and Routing tables for Fantastic Dan model.

FIGURE L4.6
Process and Routing tables for Fantastic Dan model in text format.

To define the haircut time, click Operation in the Process table. Click the
but- ton with the hammer symbol. A new window named Logic Builder
opens up. Select the command Wait. The ProModel expression Wait causes the
customer (en- tity) to be delayed for a specified amount of time. This is how
processing times are modeled.
Click Build Expression. In the Logic window, select Distribution Function
(Figure L4.7). In the Distribution Function window, select Uniform distribution.
Click Mean and select 9. Click Half-Range and select 1. Click Return. Click
Paste. Close the Logic Builder window. Close the Operation window.
Finally the customers leave the barbershop. They are routed to a default lo-
cation called EXIT in ProModel. When entities (or customers) are routed to the
EXIT location, they are in effect disposed from the system. All the information
as- sociated with the disposed entity is deleted from the computer’s memory to
con- serve space.
 Lab 4 Building Your First Model 413

FIGURE L4.7
The Logic
Builder menu.

TABLE L4.1 Commonly Used Distribution Functions

Distribution ProModel Expression

Uniform U (mean, half-range)

Triangular T (minimum, mode, maximum)
Exponential E (mean)
Normal N (mean, std. dev.)

The distribution functions are built into ProModel and generate random val-
ues based on the specified distribution. Some of the commonly used distribution
functions are shown in Table 4.1.
Now we will define the entity arrival process, as in Figure L4.8.
Next we will define some of the simulation options—that is, run time, num-
ber of replications, warm-up time, unit of time, and clock precision (Figure
L4.9). The run time is the number of hours the simulation model will be run.
The num- ber of replications refers to number of times the simulation model
will be run (each time the model will run for an amount of time specified by run
hours). The
414 Part II Labs

FIGURE L4.8
Customer arrival
table.

FIGURE L4.9
Definition of
simulation run
options.

warm-up time refers to the amount of time to let the simulation model run to
achieve steady-state behavior. Statistics are usually collected after the warm-up
period is over. The run time begins at the end of the warm-up period. The unit of
time used in the model can be seconds, minutes, or hours. The clock precision
refers to the precision in the time unit used to measure all simulation event
timings.
Let us select the Run option from the Simulation Options menu (or click
F10). Figure L4.10 shows a screen shot during run time. The button in the
middle of the scroll bar at the top controls the speed of the simulation run. Pull it
right to increase the speed and left to decrease the speed.
After the simulation runs to its completion, the user is prompted, “Do you
want to see the results?” (Figure L4.11). Click Yes. Figures L4.12 and L4.13 are
part of the results that are automatically generated by ProModel in the 3DR
(three-dimensional report) Output Viewer.
 Lab 4 Building Your First Model 415

FIGURE L4.10
Screen shot at run
time.

FIGURE L4.11
Simulation complete
prompt.

FIGURE L4.12
The 3DR Output
Viewer for the
Fantastic Dan model.

Note that the average time a customer spends waiting for Barber
Dan is 22.95 minutes. The average time spent by a customer in the
barbershop is
32.28 minutes. The utilization of the Barber is 89.15 percent. The number of
customers served in 480 minutes (or 8 hours) is 47. On average 5.875 customers
are served per hour. The maximum number of customers waiting for a haircut is
8, although the average number of customers waiting is only 2.3.
416 Part II Labs

FIGURE L4.13
Results of the Fantastic Dan simulation model.

L4.2 Building the Bank of USA ATM Model

In this section we describe how you can build a simplified version of the auto-
matic teller machine (ATM) system model described in Lab 3, Section L3.1,
using ProModel software. We also introduce the concept of a queue.
Customers arrive to use a Bank of USA ATM. The average customer inter-
arrival time is 3.0 minutes exponentially distributed. When customers arrive to
the system they join a queue to wait for their turn on the ATM. The queue has
the capacity to hold an infinite number of customers. Customers spend an
average of
 Lab 4 Building Your First Model 417

2.4 minutes exponentially distributed at the ATM to complete their transactions,

which is called the service time at the ATM. Build a simulation model of the
Bank of USA ATM. Run the simulation model for 980 hours.
a. About how many customers are served per hour?
b. What is the average customer waiting time in the queue?
c. What is the average time spent by a customer in the system?
d. What is the utilization of the ATM?
e. What are the maximum and average numbers of customers waiting in the
ATM queue?
From the menu bar select File → New. In the General Information panel
(Figure L4.14) fill in the title of the simulation model as “Bank of USA ATM.”
Fill in some of the other general information about the model like the time
and distance units. Click OK to proceed to define the locations.
From the menu bar select Build → Locations. Define two locations—
ATM and ATM_Queue (Figure L4.15). The icon selected for the first location is
actually called brake. We changed its name to ATM (Name column in the
Location table). The icon for the second location (a queue) is selected from
the graphics panel. The icon (third from top) originally looks like a “ladder on
its side.” To place it in our model layout first, left-click the mouse at the start
location of the queue. Then drag the mouse pointer to the end of the queue and
right-click. Change the name of this queue location from Loc1 → ATM_Queue.
Now double-click the ATM_Queue icon on the layout. This opens another
window as follows (Figure L4.16). Make sure to click on the Queue option in
the Conveyor/Queue options window. Change the length of the queue to be
exactly 31.413 feet.

FIGURE L4.14
General Information
for the Bank of USA
ATM simulation
model.
418 Part II Labs

FIGURE L4.15
Defining locations ATM_Queue and ATM.

FIGURE L4.16
Click on the Queue
option in the
Conveyor/Queue
options window.
 Lab 4 Building Your First Model 419

Check off the New button on the graphics panel (Figure L4.15) and click
the button marked Aa (fourth icon from top). Click on the location icon in the
layout panel. The name of the location (ATM) appears on the location icon. Do
the same for the ATM_Queue location.
Define the entity (Figure L4.17) and change its name to ATM_Customer.
Define the processes and the routings (Figures L4.18 and L4.19) the customers
go through at the ATM system. All customers arrive and wait at the location
ATM_Queue. Then they are routed to the location ATM. At this location the
customers deposit or withdraw money or check their balances, which takes an
average of 2.4 minutes exponentially distributed. Use the step-by-step procedure
detailed in section L2.2.4 to create the process and routing tables graphically.
To define the service time at the ATM, click Operation in the Process table.
Click the button with the hammer symbol. A new window named Logic
Builder opens up. Select the command Wait. The ProModel expression Wait
causes the ATM customer (entity) to be delayed for a specified amount of time.
This is how processing times are modeled.

FIGURE L4.17
Define the entity—ATM_Customer.

FIGURE L4.18
Process and Routing tables for Bank of USA ATM model.

FIGURE L4.19
Process and Routing tables for Bank of USA ATM model in text format.
420 Part II Labs

FIGURE L4.20
The Logic Builder
menu.

FIGURE L4.21
Customer arrival table.

Click Build Expression. In the Logic window, select Distribution Functions

(Figure L4.20). In the Distribution Functions window, select Exponential distrib-
ution. Click Mean and select 2.4. Click Return. Click MIN. Click Paste. Close
the Logic Builder window. Close the Operation window.
Finally the customers leave the Bank of USA ATM. They are routed to a de-
fault location called EXIT in ProModel. When entities (or customers) are routed
to the EXIT location, they are in effect disposed from the system. All the infor-
mation associated with the disposed entity is deleted from the computer’s mem-
ory to conserve space.
Now we will define the entity arrival process, as in Figure L4.21.
Next we will define some of the simulation options—that is, run time,
number of replications, warm-up time, unit of time, and clock precision (Figure
L4.22). The run time is the number of hours the simulation model will be run. In
this example
 Lab 4 Building Your First Model 421

FIGURE L4.22
Definition of
simulation run
options.

we are going to model 980 hours of operation of the ATM system. The number of
replications refers to the number of times the simulation model will be run (each
time the model will run for an amount of time specified by run hours). The
warm-up time refers to the amount of time to let the simulation model run to
achieve steady- state behavior. Statistics are usually collected after the warm-up
period is over. The run time begins at the end of the warm-up period. For a more
detailed discussion on warm-up time, please refer to Chapter 9, Section 9.6.1 and
Lab 9. The unit of time used in the model can be seconds, minutes, or hours. The
clock precision refers to the precision in the time unit used to measure all
simulation event timings.
Let us select the Run option from the Simulation Options menu (or click
F10). Figure L4.23 shows a screen shot during run time. The button in the
middle of the scroll bar at the top controls the speed of the simulation run. Pull it
right to increase the speed and left to decrease the simulation execution speed.
After the simulation runs to its completion, the user is prompted, “Do you
want to see the results?” (Figure L4.24). Click Yes. Figures L4.25 and L4.26 are
part of the results that are automatically generated by ProModel in the Output
Viewer.
Note that the average time a customer spends waiting in the ATM Queue
is 9.62 minutes. The average time spent by a customer in the ATM system is
12.02 minutes. The utilization of the ATM is 79.52 percent. Also, 20,000
customers are served in 60,265.64 minutes or 19.91 customers per hour. The
maximum num- ber of customers waiting in the ATM Queue is 31, although the
average number of
422 Part II Labs

FIGURE L4.23
Screen shot at run time.

FIGURE L4.24
Simulation complete
prompt.

FIGURE L4.25
The output viewer for
the Bank of USA
ATM model.
 Lab 4 Building Your First Model 423

FIGURE L4.26
Results of the Bank of USA ATM simulation model.

customers waiting is only 3.19. This model is an enhancement of the ATM

model in Lab 3, Section L3.1.2. Results will not match exactly as some realism
has been added to the model that cannot be addressed in queuing theory.

L4.3 Locations, Entities, Processing, and Arrivals

In Sections L4.1 and L4.2 we have used the basic elements of ProModel. In this
section we incorporate locations, entities, arrivals, processing, and routing
logic into another simulation model example.
424 Part II Labs

Problem Statement—Multiple Locations, Multiple Entities

Wooden logs are received at the receiving dock of the Poly Furniture Factory
at the rate of one every 10 minutes. Logs go to the splitter, where four pieces
are made from each log. The splitting time is Normal (4,1) minutes. The
individual pieces go to the lathe, where they are turned for another Triangular
(3,6,9) minutes and made into rounds. The rounds go on to a paint booth,
where they are con- verted into painted logs. Painting takes Exponential (5)
minutes. Painted logs go to the store. Consider a material handling time of
one minute between each process. Make a simulation model and run the
simulation for 10 hours.
We are going to use AutoBuild, the automatic model-building feature of
ProModel, to help us build this simulation model step by step. Click AutoBuild
from the Tools menu. Fill in some of the general information about the model
(Figure L4.27). Define the locations (Figure L4.28)—receiving dock, splitter
saw, lathe, paint booth, and painted logs store. Note that the capacity of the
receiving dock location has been changed to infinity (INF) to make sure that all
incoming entities (raw material) are allowed into the manufacturing facility.
Define the entities (Figure L4.29)—logs, piece, rounds, and painted logs.
Define the entity arrival process (Figure L4.30)—logs arriving to the location
receiving dock at the rate of one every 10 minutes.
Define the processes and the routings (Figure L4.31). All logs arrive at the
re- ceiving dock. From there they go to the splitter. At the splitter each log is
made into four pieces. To be able to model this, click on the Rule button in the
routing table. Change the quantity to four. This models the process of one log
going into the location splitter saw and four pieces coming out. Pieces are
routed to the lathe, where they become rounds. Rounds are routed to the paint
booth, where they be- come painted logs. Painted logs are sent to the painted
log store. Finally, the painted logs are sent to the default location EXIT for
disposal.

FIGURE L4.27
General information
for the Poly Furniture
Factory simulation.
 Lab 4 Building Your First Model 425

FIGURE L4.28
Locations in the Poly Furniture Factory.

FIGURE L4.29
Entities in the Poly Furniture Factory.

FIGURE L4.30
Entity arrivals in the Poly Furniture Factory.
426 Part II Labs

FIGURE L4.31
Processes and routings in the Poly Furniture Factory.

FIGURE L4.32
Simulation options in
the Poly Furniture
Factory.

The time to move material between processes is modeled in the Move Logic
field of the Routing table. Four choices of constructs are available in the Move
Logic field:
• MOVE—to move the entity to the end of a queue or conveyor.
• MOVE FOR—to move the entity to the next location in a specific time.
• MOVE ON—to move the entity to the next location using a specific path
network.
• MOVE WITH—to move the entity to the next location using a specific
resource (forklift, crane).
Define some of the simulation options: the simulation run time (in hours),
the number of replications, the warm-up time (in hours), and the clock
precision (Figure L4.32).
Now we go on to the Simulation menu. Select Save & Run. This will save
the model we have built so far, compile it, and also run it. When the simulation
model finishes running, we will be asked if we would like to view the results.
Select Yes. A sample of the results is shown in Figure L4.33.
 Lab 4 Building Your First Model 427

FIGURE L4.33
Sample of the results of the simulation run for the Poly Furniture Factory.
428 Part II Labs

L4.4 Add Location

Now let us add a location to an existing model. For the Poly Furniture Factory
ex- ample in Section L4.3, we will add an oven after the painting booth for
drying the painted logs individually. The drying takes a time that is normally
distributed with a mean of 20 minutes and standard deviation of 2 minutes.
After drying, the painted logs go on to the painted logs store.
To add an additional location to the model, select Locations from the Build
menu. With the mouse, first select the appropriate resource icon from the
Graphics toolbar (left-click), then left-click again in the Layout window. Change
the name of the location (in the Locations table) from Loc1 to Oven (Figure
L4.34).
Locations can also be added from the Edit menu. Select Append from the
Edit menu. A new location called Loc1 is appended to the end of the Locations
table. Change the name to Oven. Deselect the New option in the Graphics
toolbar. Select an appropriate icon from the Graphics toolbar. Click in the
Layout window.
To display the names of each location in the Layout window, first select a
loca- tion (left-click). Next deselect the New option in the graphics toolbar. Left-
click on the command button Aa in the Graphics toolbar (left column, fourth
from top). Finally, left-click on the location selected. The name of the location
will appear in the Layout window. Now it can be repositioned and its fonts and
color changed.
The complete simulation model layout is shown in Figure L4.35. Note that
the capacity of the oven as well as the paint booth has been changed to 10. The
processes and routings are created as shown in Figure L4.36. At this point it is
worthwhile to note the differences between the capacity and the units of a
location.
• Capacity: This is the number of units of entities that the location can
hold simultaneously. The default capacity of a location is one.
• Units: A multiunit location consists of several identical units that are
referenced as a single location for processing and routing purposes. A
multiunit location eliminates the need to create multiple locations and
multiple processes for locations that do the same thing. The default
number of units of a location is one.

FIGURE L4.34
Locations at the Poly Furniture Factory with oven.
 Lab 4 Building Your First Model 429

FIGURE L4.35
Simulation model layout of the Poly Furniture Factory.

FIGURE L4.36
Processes and routings at the Poly Furniture Factory.

The contents of a location can be displayed in one of the following two alter-
native ways:
a. To show the contents of a location as a counter, first deselect the New
option from the Graphics toolbar. Left-click on the command button 00
in the Graphics toolbar (left column, top). Finally, left-click on the
location selected (Oven). The location counter will appear in the
Layout window next to the location Oven (Figure L4.35).
b. To show the contents of a location (Paint Booth) as a gauge, first deselect
the New option from the Graphics toolbar. Left-click on the second
command button from the top in the left column in the Graphics toolbar.
430 Part II Labs

The gauge icon will appear in the Layout window next to the location
Paint Booth (Figure L4.35). The fill color and fill direction of the gauge
can now be changed if needed.

L4.5 Effect of Variability on Model Performance

Variability in the data makes a big impact on the performance of any system. Let
us take the example of Fantastic Dan, the barbershop in Section L4.1. Assume
that one customer arrives for getting a haircut every 10 minutes. Also, Dan
takes ex- actly nine minutes for each haircut.
Let us modify the model of Section L4.1 to reflect the above changes. The
ar- rival table is changed as shown in Figure L4.37 and the process table is
changed as shown in Figure L4.38. The results of the model with and without
variability are compared and shown in Table L4.2.

FIGURE L4.37
Customer arrival for haircut.

FIGURE L4.38
Processing of customers at the barbershop.

TABLE L4.2 Comparison of the Barbershop Model with and without

Variability

With Variability Without Variability

Average customer time at the barbershop 32.27 min. 9 min.

Average waiting in line for barber 22.95 min. 10 m
in.
 Lab 4 Building Your First Model 431

L4.6 Blocking
With respect to the way statistics are gathered, here are the rules that are used in
ProModel (see the ProModel Users Manual, p. 636):
1. Average < time > in system: The average total time the entity spends
in the system, from the time it arrives till it exits the system.
2. Average < time > in operation: The average time the entity spends
in processing at a location (due to a WAIT statement) or traveling on
a conveyor or queue.
3. Average < time > in transit: The average time the entity spends
traveling to the next location, either in or out of a queue or with a
resource. The move time in a queue is decided by the length of the
queue (defined in the queue dialog, Figure L4.16) and the speed of the
entity (defined in the entity dialog, Figure L4.4 or L4.17).
4. Average < time > wait for resource, etc.: The average time the entity
spends waiting for a resource or another entity to join, combine, or the
like.
5. Average < time > blocked: The average time the entity spends waiting
for a destination location to become available. Any entities held up
behind another blocked entity are actually waiting on the blocked entity,
so they are reported as “time waiting for resource, etc.”

Example
At the SoCal Machine Shop (Figure L4.39) gear blanks arriving to the shop wait
in a queue (Incoming_Q) for processing on a turning center and a mill, in that

FIGURE L4.39
The Layout of the SoCal Machine Shop.
432 Part II Labs

order. A total of 100 gear blanks arrive at the rate of one every eight minutes.
The processing times on the turning center and mill are eight minutes and nine
min- utes, respectively. Develop a simulation model and run it.
To figure out the time the “gear blanks” are blocked in the machine shop,
waiting for a processing location, we have entered “Move for 0” in the operation
logic (Figure L4.40) of the Incoming_Q. Also, the decision rule for the queue
has been changed to “No Queuing” in place of FIFO (Figure L4.41). This way
all the entities waiting in the queue for the turning center to be freed up are
reported as blocked. When you specify FIFO as the queuing rule for a location,
only the lead entity is ever blocked (other entities in the location are waiting for
the lead entity and are reported as “wait for resource, etc.”).

FIGURE L4.40
Process and Routing tables for SoCal Machine Shop.

FIGURE L4.41
Decision rules for Incoming_Q.
 Lab 4 Building Your First Model 433

FIGURE L4.42
Entity activity statistics at the SoCal Machine Shop.

FIGURE L4.43
Entity activity statistics at the SoCal Machine Shop with two mills.

From the entity activity statistics (Figure L4.42) in the output report we can
see the entities spend on average or 66.5 minutes in the system, of which 49.5
minutes are blocked (waiting for another process location) and 17 minutes are
spent in op- eration (eight minutes at the turning center and nine minutes at the
mill). Blocking as a percentage of the average time in system is 74.44 percent.
The utilization of the turning center and the mill are 98.14 percent and 98.25
percent, respectively.
In general, the blocking time as a percentage of the time in system increases
as the utilization of the processing locations increases. To reduce blocking in the
ma- chine shop, let us install a second mill. In the location table, change the
number of units of mill to 2. The entity activity statistics from the resulting
output report are shown in Figure L4.43. As expected, the blocking time has
been reduced to zero.

L4.7 Exercises
1. Run the Tube Distribution Supply Chain example model (logistics.mod)
from the demos subdirectory for 40 hours. What are the various entities
modeled in this example? What are the various operations and
processes modeled in this example? Look at the results and find
a. The percentage utilization of the locations “Mill” and the “Process
Grades Threads.”
b. The capacities of Inventory, and Inventory 2–6; the maximum
contents of Inventory and Inventory 2–6.
434 Part II Labs

c. The idle time percentage of the location “Mill.”

d. The percentage utilization of the resources Transport 1–5 and Fork Lift 1–6.
e. What are the various states (in percentages) of the location “Process Grades Threads”?
2. Run the Tube Distribution Supply Chain example model (logistics.mod) for 40 hours.
a. What are the utilizations of the five transport resources? Is anyone overutilized?
b. How well utilized are the six fork trucks? Can we reduce the fleet of fork trucks without much
loss in the level of service?
3. Run the Warehouse model (deaerco.mod) from the demos subdirectory for 100 hours. Run only
Scenario 1. Go into the Simulation → Options menu and change the Run Hours from 10 to 100.
a. What are the average value of inventory of Inventory Aisle 1–12?
b. What are the averages for Time to Fill, Box, and Check?
c. What is the Average Time in System?
d. What are the cost of customer order, receiving order, and the sum total of cost per order?
e. What are the percentage idle times for Checker 1 and Checker 2?
f. What are the utilizations of Boxers 1–4 and the average utilization of all the Boxers?
4. Run the Aircraft Fuselage Mating example model (assembly.mod) from the Student subdirectory
for 80 hours. Answer the following questions:
a. What are the utilizations of the Drill and the Cutter?
b. What percentage of time were the Paint, Assembly Jig Q, and KittingQ fully occupied?
c. What is the percentage utilization of the Crane?
d. What is the average time a Fuselage spends in the system?
5. Run the Book Storage (Booksmod.mod) example model from the Student subdirectory for eight
hours. Answer the following questions.
a. What are the utilizations of the forklift (JACK) and the material handler (MTHDLR)?
b. What is the average time spent in the system by order A, order B, order C, and order D?
c. What is the percentage of time the orders are waiting for a resource? Which resource? What if
any are the problems? What can you suggest to improve the situation?
6. For the example in Section L4.1 (Fantastic Dan), run the simulation model for a whole year (250
days, eight hours each day) and answer the following questions:
a. On average, how many customers does Dan serve each day?
b. What is the average number of customers waiting to get a haircut? What is the maximum?
 Lab 4 Building Your First Model 435

c. What is the average time spent by a customer in the salon?

d. How busy is Dan on average? Is this satisfactory?
e. How many chairs should Dan have for customers waiting for a haircut?
7. If Dan could take exactly nine minutes for each haircut, will it improve the situation? Rework
Question 1 and answer parts a through e.
8. For the example in Section L4.1, what will happen if we change the capacity of the location
Waiting_for_Barber to one? Is this change desirable? What are the implications? Make the
appropriate change in the model and show the results to support your argument.
9. For the Bank of USA ATM example in Section L4.2, run the model with and without any variability in
the customer interarrival time and service time. Compare the average time in system and the average
time in queue based on 1000 hours of simulation runs.
10. For the SoCal Machine Shop in Section L4.6 assume the length of the
Incoming_Q is 30 feet, and the speed of the arriving Gear_Blanks is 10 feet/minute. Delete the
statement Move for 0 in the operation logic of the Incoming_Q. Change the queuing rule to FIFO.
Answer the following questions and explain why.
a. What is the average time in operation?
b. What is the average time waiting for resource?
c. What is the average time blocked?
11.In the Arrivals element (table), what are the differences between Occurrences and Frequency? What
is the significance of the Qty each column?
12. In the Locations element (table), what are the differences between Cap
and Units?
13. What are the various time units that can be used while developing a
model? Where is this information provided? If one forgets to specify the time unit in the model, what
time unit is used by ProModel?
14. The Processing element has two tables that need to be edited. What
are their names and their functions?
15. When an entity has completed all the processing in the system, what
should we do with it? Where should it be routed?
16.Differentiate between the following:
a. Entity versus locations.
b. Locations versus resources.
c. Attributes versus variables.
d. Save versus Save As.
e. Move, Move For, Move On, Move With.
f. Wait versus Wait Until.
g. Stop versus End.
17. Increased utilization of processing locations or resources lead
to increased levels of blocking in the system. Explain why.
Harrell−Ghosh−Bo II. 5. ProModel’s © The
wden: Simulation Labs Output Module McGraw−Hill
Using ProModel, Companies,
Second Edition

L A B

5 PROMODEL’S
OUTPUT MODULE

I am not discouraged, because every wrong attempt discarded is another

step forward.
—Thomas Edison

In this chapter we discuss ProModel’s Output Program Manager in detail with

examples.

L5.1 The Output Program Manager

The ProModel Output Program Manager, also called Output Viewer 3DR (three-
dimensional report), can be run either as a stand-alone application by choosing
View Statistics from the Output menu or from within the Windows Program
Man- ager by choosing Results Viewer. This allows us to view ProModel output
files at any time, with or without starting ProModel. The Results Viewer has
two options—3DR, and Classic. The default output viewer can be selected
in the Tools → Options menu in ProModel. The Classic output viewer uses a
propri- etary binary file format that works faster. However, the 3DR output
viewer produces much nicer output. Some examples of the output view in the
3DR mode are shown in Figures L4.13, L4.26, and L4.33. The output viewer
simplifies the process of generating and charting graphs and reports and
analyzing the output data. We encourage you to use the ProModel’s online help
to learn more about the Output Program Manager.
The File menu (Figure L5.1) allows the user to open one or more output
data- bases for review, analysis, and comparison. It also allows the user to
export raw data to a common delimited format (*.CSV), to keep reports and
graphs for all subsequent runs, to print, and to set up printing.

437
438 Part II Labs

FIGURE L5.1
File menu in the
3DR Output Viewer.

FIGURE L5.2
Output menu options
in ProModel.

FIGURE L5.3
View menu in the
3DR Output Viewer.

The Output menu in ProModel (Figure L5.2) has the following options:
• View Statistics: Allows the user to view the statistics generated from
running a simulation model. Selecting this option loads the Output Viewer
3DR.
• View Trace: Allows the user to view the trace file generated from running
a simulation model. Sending a trace listing to a text file during runtime
generates a trace. Please refer to Lab 8, section L8.2, for a more complete
discussion of tracing a simulation model.
The View menu (Figure L5.3) allows the user to select the way in which
out- put data, charts, and graphs can be displayed. The View menu has the
following options:
a. Report d. Histogram
b. Category Chart e. Time Plot
c. State Chart f. Sheet Properties
 Lab 5 ProModel’s Output Module 439

FIGURE L5.4
3DR Report view of the results of the ATM System in Lab3.

L5.1.1 Report View

The report view (Figure L5.4) of the Output Viewer 3DR is similar to the
Classic view of the output report. A major difference is that there are tabs for
various parts of the report as follows:
a. General i. Entity Activity
b. Locations j. Entity States
c. Location States Multiunit k. Variables
d. Location States Single/Tank l. Location Costing
e. Resources m. Resource Costing
f. Resource States n. Entity Costing
g. Node Entries o. Logs
h. Failed Arrivals

L5.1.2 Category Chart

The category chart (Figure L5.5) is a graphical representation of the status of the
category of data selected at the end of the simulation run. Here are some of the
data categories available for charting:
a. Entity Activity d. Locations
i. Total exits i. Total entries
ii. Current quantity in ii. Average contents
system e. Logs
iii.Average time in system i. Minimum
value (Figure L5.6) ii. Average value
b. Location States Multi f. Resource States
i. Pct. empty i. Pct. idle
ii. Pct. full ii. Pct. in use
c. Location States Single g. Variables
i. Pct. idle i. Minimum value
ii. Pct. waiting ii. Average value
iii.Pct. blocked iii. Maximum contents
440 Part II Labs

FIGURE L5.5
Categories of charts
available in the
Category Chart
Selection menu.

FIGURE L5.6
An example of a category chart presenting entity average time in system.
 Lab 5 ProModel’s Output Module 441

FIGURE L5.7
Categories of charts
available in the State
Chart Selection
menu.

L5.1.3 State Chart

In ProModel the state and utilization graphs produce an averaged state summary
for multiple replications or batches. By selecting State or Utilization Summary, it
is possible to select the type of graph in the dialog shown in Figure L5.7.
The Output Program allows you to create seven different types of state and
utilization graphs to illustrate the percentage of time that locations and resources
were in a particular state: operation, waiting, blocked, down, or the like.
• Location Utilization: Location Utilization graphs show the percentage of
time that each location in the system was utilized. ProModel allows you
to see this information for all of the locations in the system at once
(Figure L5.8).
• Location State: Single and Multiple Capacity Location State graphs show
the percentage of time that each location in the system was in a particular
state, such as idle, in operation, waiting for arrivals, blocked or down
(Figure L5.9). ProModel shows this information for all of the locations
in the system at once. For further enhancement of a particular location
you can create a pie chart. To create a pie chart from a state graph double
click on one of the state bars (alternatively you can right-click on a bar
and select Create Pie Chart from the pop-up menu) for that location
(Figure L5.10).
442 Part II Labs

FIGURE L5.8
State chart representation of location utilization.

FIGURE L5.9
A state chart
representation of all
the locations’ states.

• Multiple Capacity Location Downtime: Multiple Capacity Location

Down- time graphs show the percentage of time that each multicapacity
location in the system was down. A pie chart can be created for any one of
the locations.
• Resource Blocked in Travel: Resource Blocked in Travel graphs show the
percentage of time a resource was blocked. A resource is blocked if it is
unable to move to a destination because the next path node along the
route of travel was blocked (occupied).
 Lab 5 ProModel’s Output Module 443

FIGURE L5.10
A pie chart
representing the states
of the location
Inspect.

• Resource Utilization: Resource Utilization graphs show the percentage of

time that each resource in the system was utilized. A resource is utilized
when it is transporting or processing an entity or servicing a location or
other resource. ProModel shows this information for all resources in the
system at once.
• Resource State: The following information is contained in the report for
each resource (Figure L5.11).
Resource Name The name of the resource.
Scheduled Hours The total number of hours the resource was
scheduled to be available, which excludes off-shift
time and scheduled downtime.
Pct. in Use The percentage of time the resource spent
transporting or processing an entity, or servicing a
location or other resource.
Pct. Travel to Use The percentage of time the resource spent traveling
to a location or resource to transport, process, or
service an entity, location, or resource. This also
includes pickup and deposit time.
Pct. Travel to Park The percentage of time the resource spent traveling
to a path node to park.
Pct. Idle The percentage of time the resource was available
but not in use.
Pct. Down The percentage of time the resource was unavailable
due to unscheduled downtime.
444 Part II Labs

FIGURE L5.11
State chart for the Cell Operator resource states.

FIGURE L5.12
State chart representation of entity states.
Lab 5 ProModel’s Output Module 445

• Entity State: The following information is given for each entity

type (Figure L5.12)
Pct. in Move Logic The percentage of time the entity spent traveling to
the next location, either in or out of a queue or with
a resource.
Pct. Wait for Res The percentage of time the entity spent waiting for
a resource or another entity to join, combine, or
the like.
Pct. in Operation The percentage of time the entity spent in process-
ing at a location or traveling on a conveyor.
Pct. Blocked The percentage of time the entity spent waiting for
a freed destination.

L5.1.4 Histogram and Time Plot

Time series statistics can be collected for locations, entities, resources, and
variables. By selecting one of the Time Series menu item choices, one can select
the values to graph and the options to customize the appearance of the graph
(Figure L5.13).
• Time series histogram (Figure L5.14): Selecting Edit from the Options
menu displays the Graph Options dialog that lets you select time units,
bar width, and other options to modify the look of the graph.
• Time plots: Time plots (Figure L5.15) give a different perspective
from histograms. One can track global variables such as total work-in-
process inventory, contents of a queue or location, and total items
produced. Figure L5.15 is a time plot of the status of the work-in-
process inventory over 900 minutes of simulation of the mfg_cost.mod
model in the Demo subdirectory. Figure L5.16 is a time plot of the
contents of the Part_Conveyor over about 515 minutes of simulation of
the pracmod.mod model in the Training subdirectory.
Notice by clicking on the time-plot menu, there are actually three
different types of values that can be plotted over time. One is Time-
weighted values in which the values that are plotted are weighted by time.
So if you want to display the contents of a location for each 15-minute
interval of the simulation, it will plot the time-weighted average value for
each 15-minute interval. The other two are Simple Values which takes a
simple average when plotting by time interval, and Counts which plots
the number of times a value changed per time interval.
• Export plots/histograms: When you plot one or more model elements
using a plot or histogram, ProModel allows you to export these data to an
Excel spreadsheet. When you export the plot or histogram data,
ProModel creates a new spreadsheet and defines a new layer for each data
element.
446 Part II Labs

FIGURE L5.13
Dialog box for plotting a histogram.

FIGURE L5.14
A time-weighted histogram of the contents of the Bearing Queue.
 Lab 5 ProModel’s Output Module 447

FIGURE L5.15
A time series plot of the Bearing Queue contents over time.

FIGURE L5.16
A time series plot of WIP.
448 Part II Labs

FIGURE L5.17
Sheet Properties
menu in the Output
Viewer.

L5.1.5 Sheet Properties

The Sheet Properties menu in the View menu allows the user to customize the
columns in the report view (Figure L5.17). The headings and gridlines can be
turned on and off. The font type, size, and color of the column headings can be
selected here. The time unit of the columns with time values can be selected as
seconds, minutes, hours, days, or weeks.

L5.2 Classic View

The output view in the Classic mode for the example in Section L4.3 is shown in
Figure L5.18. The View menu in the Classic output viewer consists of the
follow- ing options (Figure L5.19):
a. General Stats: Creates a general summary report. If there are only
one scenario, one replication, and one report period, the report will be
generated automatically.
b. Selected Stats: The Selected Stats report allows you to create a
replication, batch mean, or periodic report with only the specific
statistics and elements you want in the report. The Selected Stats
report is available only if there are multiple replications, periods, or
batches.
 Lab 5 ProModel’s Output Module 449

FIGURE L5.18
The results of Poly
Furniture Factory
(with Oven) in
Classic view.
450 Part II Labs

FIGURE L5.19
View menu in the
Classic output viewer.

c. State or Utilization Summary: In ProModel,

the state and utilization graphs produce an
averaged state summary for multiple
replications or batches.
d. Time Series Plot/Histogram: In previous
versions, time series plots and histograms were
known as throughput, content, value, and
duration plots and histograms. These charts can
now be combined on one chart for improved
comparisons. You must specify Time Series
statistics for the desired model element to view
this information.
The Options menu in the Classic output viewer allows the user to display
the dialog box for various options pertaining to the current report or graphs.
Also, the most recently viewed reports and graphs can be automatically opened.

L5.2.1 Time Series Plot

The numbers of customers waiting for Barber Dan in Lab 4, Section L4.1, over
the eight-hour simulation period are shown in Figure L5.20 as a time series
plot. The number of customers waiting for a haircut varies between zero and
one for the first hour. In the second hour, the number of customers waiting
grows to as many as four. After dropping back to zero, the number of customers
waiting grows again to as many as eight. However, it drops down to zero again
toward the end of the day.

L5.2.2 Time Series Histogram

The number of customers waiting for a haircut at Fantastic Dan (Lab 4, Sec-
tion L4.1) is shown in Figure L5.21 as a histogram. For about 63 percent of the
time (simulation run time) the number of customers waiting varies from zero to
three, and for 20 percent of the time this number varies from three to six. For
about 17 percent of the time the number of customers waiting for haircuts
varies from six to nine.

L5.2.3 Location State Graphs

The utilization of all the locations at the Poly Furniture Factory in Lab 4, Sec-
tion L4.3, with unit capacity is shown in Figure L5.22. The different location
 Lab 5 ProModel’s Output Module 451

FIGURE L5.20
Time series plot of customers waiting for Barber Dan.

FIGURE L5.21
Time series histogram
of customers waiting
for Barber Dan.

states are Operation, Setup, Idle, Waiting, Blocked, and Down. The location
states for the Splitter Saw are shown in Figure L5.23 as a pie graph. The
utilization of multiple capacity locations at Poly Furniture Factory is shown in
Figure L5.24. All the states the entity (Painted_Logs) is in are shown in Figure
L5.25 as a state graph and in Figure L5.26 as a pie chart. The different states are
move, wait for re- source, and operation.
452 Part II Labs

FIGURE L5.22
State graphs for
the utilization of
single capacity
locations.

FIGURE L5.23
Pie chart for
the utilization
of the Splitter
Saw.

FIGURE L5.24
State graphs for the
utilization of multiple
capacity locations.

FIGURE L5.25
Graph of the
states of the entity
Painted_Logs.
 Lab 5 ProModel’s Output Module 453

FIGURE L5.26
Pie graph of the
states of the entity
Painted_Logs.

L5.3 Exercises
1. Customers arrive at the Lake Gardens post office for buying stamps,
mailing letters and packages, and so forth. The interarrival time is
exponentially distributed with a mean of 2 minutes. The time to
process each customer is normally distributed with a mean of 10
minutes and a standard deviation of 2 minutes.
a. Make a time series plot of the number of customers waiting in line at
the post office in a typical eight-hour day.
b. How many postal clerks are needed at the counter so that there are
no more than 15 customers waiting in line at the post office at any
time? There is only one line serving all the postal clerks. Change the
number of postal clerks until you find the optimum number.
2. The Lake Gardens postmaster in Exercise 1 wants to serve his customers
well. She would like to see that the average time spent by a postal
customer at the post office is no more than 15 mins. How many postal
clerks should she hire?
3. For the Poly Furniture Factory example in Lab 4, Section L4.3,
a. Make a state graph and a pie graph for the splitter and the lathe.
b. Find the percentage of time the splitter and the lathe are idle.
4. For the Poly Furniture Factory example in Lab 4, Section L4.4,
a. Make histograms of the contents of the oven and the paint booth.
Make sure the bar width is set equal to one. What information
can you gather from these histograms?
b. Plot a pie chart for the various states of the entity Painted_Logs.
What percentage of time the Painted_Logs are in operation?
c. Make a time series plot of the oven and the paint booth contents. How
would you explain these plots?
454 Part II Labs

5. For the Bank of USA ATM example in Lab 4, Section L4.2,

a. Plot a pie chart for the various states of the ATM customer.
b. What is the percentage of time the ATM customer is in process (using the ATM)?
6. Run the Tube Distribution Supply Chain example model (logistcs.mod from the Demo
subdirectory) for 40 hours. What are the various entities modeled in this example? What are the
various operations and processes modeled in this example?
Look at the results and find
a. The percentage utilization of the locations Mill and the Process Grades Threads.
b. The capacities of Inventory and Inventory 2–6. The maximum contents of Inventory and
Inventory 2–6.
c. The idle time percent of the location Mill.
d. The percent utilization of the resources Transport 1–5 and Fork Lift 1–6.
e. What are the various states (in percentages) of the location Process Grades Threads?
7. Run the Warehouse model (deaerco.mod from the Demo subdirectory) for 100 hours. Run only
Scenario 1. Go into the Simulation → Options menu and change the Run Hours from 10 to 100.
a. What are the average values of inventory of Inventory Aisle 1–12?
b. What is the average Time to Fill, Box, and Check?
c. What is the Average Time in System?
d. What are the cost of customer order, receiving order, and the sum total of cost per order?
e. What are the percentage idle times for Checker 1 and Checker 2?
f. What are the utilizations of Boxers 1–4 and the average utilization of all the Boxers?
8. Run the Aircraft Fuselage Mating example model (assembly.mod from the Student subdirectory)
for 80 hours. Answer the following questions:
a. What are the utilizations of the Drill and the Cutter?
b. What percentage of time were the Paint, Assembly Jig Q, and Kitting Q fully occupied?
c. What is the percentage utilization of the Crane?
d. What is the average time a Fuselage spends in the system?
Harrell−Ghosh−Bo II. 6. Fitting © The
wden: Simulation Labs Statistical McGraw−Hill
Using ProModel, Distributions to Companies,
Second Edition

L A B

6 FITTING STATISTICAL
DISTRIBUTIONS
TO INPUT DATA

There are three kinds of lies: lies, damned lies, and statistics.
—Benjamin Disraeli

Input data drive our simulation models. Input data can be for interarrival times,
material handling times, setup and process times, demand rates, loading and un-
loading times, and so forth. The determination of what data to use and where to
get the appropriate data is a complicated and time-consuming task. The quality
of data is also very important. We have all heard the cliché “garbage in,
garbage out.” In Chapter 6 we discussed various issues about input data
collection and analysis. We have also described various empirical discrete and
continuous distri- butions and their characteristics. In this lab we describe how
ProModel helps in fitting empirical statistical distributions to user input data.

L6.1 An Introduction to Stat::Fit

Stat::Fit is a utility packaged with the ProModel software, which is available from
the opening screen of ProModel (Figure L1.1) and also from the Windows Start
→ Pro- grams menu. The Stat::Fit opening screen is shown in Figure L6.1.
Stat::Fit can be used for analyzing user-input data and fitting an appropriate
empirical distribution. The empirical distribution can be either continuous or
discrete. If there are enough data points, say 100 or more, it may be appropriate
to fit an empirical distribution to the data using conventional methods. ProModel
offers built-in capability to perform input data analysis with the tool Stat::Fit.
Stat::Fit fits probability distributions to empirical data. It allows comparison
among various distribution functions. It per- forms goodness-of-fit tests using
chi-square, Kolmogorov–Smirnov, and Anderson– Darling procedures. It
calculates appropriate parameters for distributions. It provides distribution
expressions for use in the simulation model. When the amount of data is

455
456 Part II Labs

FIGURE L6.1
Stat::Fit opening
screen.

FIGURE L6.2
Stat::Fit opening menu.

small, the goodness-of-fit tests are of little use in selecting one distribution over
an- other because it is inappropriate to fit one distribution over another in such a
situation. Also, when conventional techniques have failed to fit a distribution, the
empirical distribution is used directly as a user distribution (Chapter 6, Section
6.9).
The opening menu of Stat::Fit is shown in Figure L6.2. Various options are
available in the opening menu:
1. File: File opens a new Stat::Fit project or an existing project or data file.
The File menu is also used to save a project.
2. Edit:
3. Input:
4. Statistics:
5. Fit: The Fit menu provides a Fit Setup dialog and a Distribution Graph
dialog. Other options are also available when a Stat::Fit project is
opened. The Fit Setup dialog lists all the distributions supported by
Stat::Fit and the relevant choices for goodness-of-fit tests. At least one
distribution must be chosen before the estimate, test, and graphing
commands become available. The Distribution Graph command uses
the distribution and parameters provided in the Distribution Graph
dialog to create a graph of any analytical distribution supported by
Stat::Fit. This graph is not connected to any input data or document.
 Lab 6 Fitting Statistical Distributions to Input Data 457

6. Utilities: The Replications command allows the user

to calculate the number of independent data points
or replications of an experiment necessary to
provide a given range or confidence interval for the
estimate of a parameter. The confidence interval is
given for the confidence level specified. The default
is a 95 percent confidence interval. The resulting
number of replications is calculated using the t
distribution.
7. View:
8. Window: The Window menu is used to either
cascade or tile various windows opened while
working on the Stat::Fit projects.
9. Help:
FIGURE L6.3
Document Figure L6.3 shows the data/document input screen. Figure L6.4 shows the various
input screen. data input options available in Stat::Fit. The type of distribution is also specified

FIGURE L6.4
Stat::Fit data
input options.
458 Part II Labs

here. The Input Options command can be accessed from the Input menu as well as
the Input Options button on the Speed Bar.

L6.2 An Example Problem

Problem Statement
The time between arrivals of cars at San Dimas Gas Station were collected as
shown in Table L6.1. This information is also saved and available in an Excel
work- sheet named L6.2_Gas Station Time Between Arrival. Use Stat::Fit to
analyze the data and fit an appropriate continuous distribution to the data. Figure
L6.5 shows part of the actual data of times between arrival of cars in minutes.
The sample data have 30 data points. Figure L6.6 shows the histogram of the
input data, while Figure L6.7 shows some of the descriptive statistics generated
by Stat::Fit.

TABLE L6.1 Times between Arrival of Cars at San Dimas Gas Station

Number Times between Arrival, Minutes

1 12.36
2 5.71
3 16.79
4 18.01
5 5.12
6 7.69
7 19.41
8 8.58
9 13.42
10 15.56
11 10.
12 18.
13 16.75
14 14.13
15 17.46
16 10.72
17 11.53
18 18.03
19 13.45
20 10.54
21 12.53
22 8.91
23 6.78
24 8.54
25 11.23
26 10.1
27 9.34
28 6.53
29 14.35
30 18.45
 Lab 6 Fitting Statistical Distributions to Input Data 459

FIGURE L6.5
Times between arrival
of cars at San Dimas
Gas Station.

FIGURE L6.6
Histogram of the times
between arrival data.
460 Part II Labs

FIGURE L6.7
Descriptive statistics
for the input data.

L6.3 Auto::Fit Input Data

Automatic fitting of continuous distributions can be performed by clicking on
the Auto::Fit icon or by selecting Fit from the Menu bar and then Auto::Fit from
the Submenu (Figure L6.8).
This command follows the same procedure as discussed in Chapter 6 for
manual fitting. Auto::Fit will automatically choose appropriate continuous
distri- butions to fit to the input data, calculate Maximum Likelihood Estimates
for those distributions, test the results for Goodness of Fit, and display the
distributions in order of their relative rank. The relative rank is determined
by an empirical method, which uses effective goodness-of-fit calculations.
While a good rank usu- ally indicates that the fitted distribution is a good
representation of the input data, an absolute indication of the goodness of fit is
also given.
The Auto::Fit dialog allows the number of continuous distributions to be
lim- ited by choosing only those distributions with a lower bound or by forcing a
lower bound to a specific value as in Fit Setup. Also, the number of distributions
will be limited if the skewness of the input data is negative; many continuous
distributions with lower bounds do not have good parameter estimates in this
situation.
The acceptance of fit usually reflects the results of the goodness-of-fit tests
at the level of significance chosen by the user. However, the acceptance may
be modified if the fitted distribution would generate significantly more data
points in the tails of the distribution than are indicated by the input data.
The Auto::Fit function forces the setup of the document so that only
continu- ous distributions will be used. Figure L6.9 shows various continuous
distributions fitted to the input data of the San Dimas Gas Station (Section
L6.2) and their
 Lab 6 Fitting Statistical Distributions to Input Data 461

FIGURE L6.8
The Auto::Fit
submenu.

FIGURE L6.9
Various distributions fitted to the input data.

rank in terms of the amount of fit. Both the Kolmogorov–Smirnov and the
Anderson–Darling goodness-of-fit tests will be performed on the input data as
shown in Figure L6.10. The Maximum Likelihood Estimates will be used with
an accuracy of at least 0.00003. The actual data and the fitted uniform
distribution are compared and shown in Figure L6.11.
462 Part II Labs

FIGURE L6.10
Goodness-of-fit tests
performed on the input
data.

FIGURE L6.11
Comparison of actual data and fitted uniform distribution.
 Lab 6 Fitting Statistical Distributions to Input Data 463

Because the Auto::Fit function requires a specific setup, the Auto::Fit view
can be printed only as the active window or part of the active document, not as
part of a report. The Auto::Fit function will not fit discrete distributions. The
man- ual method, previously described, should be used instead.

L6.4 Exercises

1. Consider the operation of a fast-food restaurant where customers arrive

for ordering lunch. The following is a log of the time (minutes) between
arrivals of 40 successive customers. Use Stat::Fit to analyze the data and
fit an appropriate continuous distribution. What are the parameters of
this distribution?

11 11 12 8 15 14 15 13
9 13 14 9 14 9 13 7
12 12 7 13 12 16 7 10
8 8 17 15 10 7 16 11
11 10 16 10 11 12 14 15

2. The servers at the restaurant in Question 1 took the following time (minutes) to serve food to these
40 customers. Use Stat::Fit to analyze the data and fit an appropriate continuous distribution. What
are the parameters of this distribution?

11 11 12 8 15 14 15 13
9 13 14 10 14 9 13 12
12 12 11 13 12 16 11 10
10 8 17 12 10 7 13 11
11 10 13 10 11 12 14 15

3. The following are the numbers of incoming calls (each hour for 80 successive hours) to a call center
set up for serving customers of a certain Internet service provider. Use Stat::Fit to analyze the data
and fit an appropriate discrete distribution. What are the parameters of this distribution?

12 12 11 13 12 16 11 10
9 13 14 10 14 9 13 12
12 12 11 13 12 16 11 10
10 8 17 12 10 7 13 11
11 11 12 8 15 14 15 13
9 13 14 10 14 9 13 12
12 12 11 13 12 16 11 10
10 8 17 12 10 7 13 11
11 10 13 10 11 12 14 15
10 8 17 12 10 7 13 11
464 Part II Labs

4. Observations were taken on the times to serve online customers at a stockbroker’s site
(STOCK.com) on the Internet. The times (in seconds) are shown here, sorted in ascending order.
Use Stat::Fit and fit an appropriate distribution to the data. What are the parameters of this
distribution?

1.39 21.47 39.49 58.78 82.10

3.59 22.55 39.99 60.61 83.52
7.11 28.04 41.42 63.38 85.90
8.34 28.97 42.53 65.99 88.04
11.14 29.05 47.08 66.00 88.40
11.97 35.26 51.53 73.55 88.47
13.53 37.65 55.11 73.81 92.63
16.87 38.21 55.75 74.14 93.11
17.63 38.32 55.85 79.79 93.74
19.44 39.17 56.96 81.66 98.82

5. Forty observations for a bagging operation was shown in Chapter 6, Table 6.5. Use Stat::Fit to find
out what distribution best fits the data. Compare your results with the results obtained in Chapter 6
(Suggestion: In Chapter 6 five equal probability cells were used for the chi-square goodness of fit
test. Use same number of cells in Stat::Fit to match the results).
Harrell−Ghosh−Bo II. 7. Basic © The
wden: Simulation Labs Modeling McGraw−Hill
Using ProModel, Concepts Companies,
Second Edition

L A B

7 BASIC MODELING
CONCEPTS

Imagination is more important than knowledge.

—Albert Einstein

In this chapter we continue to describe other basic features and modeling

concepts of ProModel. In Section L7.1 we show an application with multiple
locations and multiple entity types. Section L7.2 describes modeling of
multiple parallel loca- tions. Section L7.3 shows various routing rules. In
Section L7.4 we introduce the concept of variables. Section L7.5 introduces the
inspection process, tracking of de- fects, and rework. In Section L7.6 we show
how to assemble nonidentical entities and produce assemblies. In Section L7.7
we show the process of making temporary entities through the process of
loading and subsequent unloading. Section L7.8 describes how entities can be
accumulated before processing. Section L7.9 shows the splitting of one entity
into multiple entities. In Section L7.10 we introduce various decision
statements with appropriate examples. Finally, in Section L7.11 we show you
how to model a system that shuts down periodically.

L7.1 Multiple Locations, Multiple Entity Types

Problem Statement
In one department at Pomona Electronics, three different printed circuit boards
are assembled. Each board is routed through three assembly areas. The routing
order is different for each of the boards. Further, the time to assemble a board
de- pends on the board type and the operation. The simulation model is
intended to determine the time to complete 500 boards of each type. The
assembly time for each board is exponentially distributed with the mean times
shown in Table L7.1. Define three locations (Area1, Area2, and Area3) where
assembly work is done and another location, PCB_Receive, where all the
printed circuit boards

465
466 Part II Labs

FIGURE L7.1
The three processing locations and the receiving dock.

FIGURE L7.2
Layout of Pomona
Electronics.

TABLE L7.1 Assembly Times for the Printed Circuit Boards

Printed Circuit Board 1 Printed Circuit Board 2 Printed Circuit Board 3

Area Mean Time Area Mean Time Area Mean Time

1 10 2 5 3 12
2 12 1 6 2 14
3 15 3 8 1 15

arrive (Figure L7.1). Assume each of the assembly areas has infinite capacity.
The layout of Pomona Electronics is shown in Figure L7.2. Note that we used
Background Graphics → Behind Grid, from the Build menu, to add the Pomona
Electronics logo on the simulation model layout. Add the robot graphics (or
some- thing appropriate). Define three entities as PCB1, PCB2, and PCB3
(Figure L7.3).
 Lab 7 Basic Modeling Concepts 467

FIGURE L7.3
The three types of circuit boards.

FIGURE L7.4
The arrival process for all circuit boards.

FIGURE L7.5
Processes and routings for Pomona Electronics.

Define the arrival process (Figure L7.4). Assume all 1500 boards are in
stock when the assembly operations begin. The process and routing tables are
devel- oped as in Figure L7.5.
Run the simulation model. Note that the whole batch of 1500 printed circuit
boards (500 of each) takes a total of 2 hours and 27 minutes to be processed.
468 Part II Labs

L7.2 Multiple Parallel Identical Locations

Location: Capacity versus Units
Each location in a model has associated with it some finite capacity. The
capacity of a location refers to the maximum number of entities that the
location can hold at any time. The reserved word INF or INFINITE sets the
capacity to the maximum allowable value. The default capacity for a location is
one unless a counter, con- veyor, or queue is the first graphic assigned to it. The
default capacity in that case is INFINITE.
The number of units of a location refers to the number of identical, inter-
changeable, and parallel locations referenced as a single location for routing and
processing. A multiunit location eliminates the need to create multiple locations
and multiple processes for locations that do the same thing. While routings to
and from each unit are the same, each unit may have unique downtimes.
A multiunit location is created by entering a number greater than one as the
number of units for a normal location. A corresponding number of locations
will appear below the original location with a numeric extension appended to
each copied location name designating the unit number of that location. The
original location record becomes the prototype for the unit records. Each unit
will inherit the prototype’s characteristics unless the individual unit’s
characteristics are changed. Downtimes, graphic symbols, and, in the case of
multicapacity loca- tions, capacities may be assigned to each unit. As the
number of units of a location is changed, the individual unit locations are
automatically created or destroyed accordingly.
The following three situations describe the advantages and disadvantages of
modeling multicapacity versus multiunit locations.

• Multicapacity locations. Locations are modeled as a single unit with

multicapacity (Figure L7.6). All elements of the location perform
identical operations. When one element of the location is unavailable
due to downtime, all elements are unavailable. Only clock-based
downtimes are allowed.
• Multiunit locations. Locations are modeled as single capacity but multiple
units (Figure L7.7). These are locations consisting of two or more parallel
and interchangeable processing units. Each unit shares the same sources
of input and the same destinations for output, but each may have
independent operating characteristics. This method provides more
flexibility in the assignment of downtimes and in selecting an individual
unit to process a particular entity.
• Multiple, single-capacity locations. Locations are modeled as individual
and single capacity (Figure L7.8). Usually noninterchangeable locations
are modeled as such. By modeling as individual locations, we gain the
flexibility of modeling separate downtimes for each element. In addition,
we now have complete flexibility to determine which element will
process a particular entity.
 Lab 7 Basic Modeling Concepts 469

FIGURE L7.6
Single unit of multicapacity location.

FIGURE L7.7
Multiple units of single-capacity locations.

FIGURE L7.8
Multiple single-capacity locations.

Problem Statement
At San Dimas Electronics, jobs arrive at three identical inspection machines ac-
cording to an exponential distribution with a mean interarrival time of 12
minutes. The first available machine is selected. Processing on any of the
parallel machines is normally distributed with a mean of 10 minutes and a
standard deviation of 3 minutes. Upon completion, all jobs are sent to a
fourth machine, where they queue up for date stamping and packing for
shipment; this takes five minutes nor- mally distributed with a standard
deviation of two minutes. Completed jobs then leave the system. Run the
simulation for one month (20 days, eight hours each). Calculate the average
utilization of the four machines. Also, how many jobs are processed by each of
the four machines?
Define a location called Inspect. Change its units to 3. Three identical
parallel locations—that is, Inspect.1, Inspect.2, and Inspect.3—are thus created.
Also, de- fine a location for all the raw material to arrive (Material_Receiving).
Change the capacity of this location to infinite. Define a location for Packing
(Figure L7.9). Select Background Graphics from the Build menu. Make up a
label “San Dimas Electronics.” Add a rectangular border. Change the font and
color appropriately.
470 Part II Labs

FIGURE L7.9
The locations and the layout of San Dimas Electronics.

FIGURE L7.10
Arrivals of PCB at San Dimas Electronics.

Define an entity called PCB. Define the frequency of arrival of the entity
PCB as exponential with a mean interarrival time of 12 minutes (Figure L7.10).
Define the process and routing at San Dimas Electronics as shown in Figure
L7.11.
In the Simulation menu select Options. Enter 160 in the Run Hours box.
Run the simulation model. The average utilization and the number of jobs
processed at the four locations are given in Table L7.2.
 Lab 7 Basic Modeling Concepts 471

FIGURE L7.11
Process and routing tables at San Dimas Electronics.

TABLE L7.2 Summary of Results of the Simulation Run

Average Utilization Number of Jobs Processed

Inspector1 49.5 437

Inspector2 29.7 246
Inspector3 15.9 117
Packing 41.5 798

L7.3 Routing Rules

Routing rules are used in selecting among competing downstream processes for
routing an entity. Sometimes customers prefer one downstream resource to
another. The selection among several competing resources may follow one of
these rules:
• FIRST available: Select the first location that has available capacity.
• MOST available: Select the location that has the most available capacity.
• By TURN: Rotate the selection among two or more available locations.
• RANDOM: Select randomly among two or more available locations.
• If JOIN request: Select the location that satisfies a JOIN request (see the
JOIN statement).
• If LOAD request: Select the location that satisfies a LOAD request (see the
LOAD statement).
• If SEND request: Select the location that satisfies a SEND request (see the
SEND statement).
• Longest: Select the location that has been unoccupied the longest.
• Unoccupied until FULL: Continue to select the same location until it
is full.
• If EMPTY: Select the location only when empty and continue to select until
it is full.
472 Part II Labs

• Probabilistic: Select based on the probability specified (such as .75).

• User condition: Select the location that satisfies the Boolean condition
specified by the user (such as AT2>5). Conditions may include any
numeric expression except for location attributes, resource-specific
functions, and downtime-specific functions.
• CONTINUE: Continue at the same location for additional operations.
CONTINUE is allowed only for blocks with a single routing.
• As ALTERNATE to: Select as an alternate if available and if none of
the above rules can be satisfied.
• As BACKUP: Select as a backup if the location of the first preference is down.
• DEPENDENT: Select only if the immediately preceding routing was processed.
If only one routing is defined for a routing block, use the first available, join,
load, send, if empty, or continue rule. The most available, by turn, random,
longest un- occupied, until full, probabilistic, and user condition rules are
generally only use- ful when a block has multiple routings.

Problem Statement
Amar, Akbar, and Anthony are three tellers in the local branch of Bank of India.
Figure L7.12 shows the layout of the bank. Assume that customers arrive at the
bank according to a uniform distribution (mean of five minutes and half-width of
four minutes). All the tellers service the customers according to another uniform

FIGURE L7.12
Layout of the Bank of
India.
 Lab 7 Basic Modeling Concepts 473

FIGURE L7.13
Locations at the Bank of India.

FIGURE L7.14
Queue menu.

distribution (mean of 10 minutes and half-width of 6 minutes). However, the cus-

tomers prefer Amar to Akbar, and Akbar over Anthony. If the teller of choice is
busy, the customers choose the first available teller. Simulate the system for 200
customer service completions. Estimate the teller’s utilization (percentage of
time busy).
The locations are defined as Akbar, Anthony, Amar, Teller_Q, and Enter as
shown in Figure L7.13. The Teller_Q is exactly 100 feet long. Note that we have
checked the queue option in the Conveyor/Queue menu (Figure L7.14). The
474 Part II Labs

FIGURE L7.15
Customer arrival at the Bank of India.

FIGURE L7.16
Process and routing tables at the Bank of India.

TABLE L7.3 Utilization of Tellers at the Bank of India

% Utilization

Selection in Order Selection by

Tellers of Preference Turn

Amar 79 63.9
Akbar 64.7 65.1
Anthony 46.9 61.5

customer arrival process is shown in Figure L7.15. The processes and routings
are shown in Figure L7.16. Note that the customers go to the tellers Amar,
Akbar, and Anthony in the order they are specified in the routing table.
The results of the simulation model are shown in Table L7.3. Note that
Amar, being the favorite teller, is much more busy than Akbar and Anthony.
If the customers were routed to the three tellers in turn (selected in rotation),
the process and routing tables would be as in Figure L7.17. Note that By Turn
was selected from the Rule menu in the routing table. These results of the
simulation model are also shown in Table L7.3. Note that Amar, Akbar, and
Anthony are now utilized almost equally.
 Lab 7 Basic Modeling Concepts 475

FIGURE L7.17
Process and routing tables for tellers selected by turn.

L7.4 Variables
Variables are placeholders for either real or integer numbers that may change
during the simulation. Variables are typically used for making decisions or for
gathering data. Variables can be defined to track statistics and monitor other
activities during a simulation run. This is useful when the built-in statistics don’t
capture a particular performance metric of interest. Variables might be defined
to track
• The number of customers waiting in multiple queues.
• Customer waiting time during a specific time period.
• Customer time in the bank.
• Work-in-process inventory.
• Production quantity.
In ProModel two types of variables are used—local variables and global variables.
• Global variables are accessible from anywhere in the model and at any
time. Global variables are defined through the Variables(global) editor
in the Build menu. The value of a global variable may be displayed
dynamically during the simulation. It can also be changed interactively.
Global variables can be referenced anywhere a numeric expression is
valid.
• Local variables are temporary variables that are used for quick
convenience when a variable is needed only within a particular operation
(in the Process table), move logic (in the Routing table), logic (in the
Arrivals, Resources, or Subroutine tables), the initialization or termination
logic (in the General Information dialog box), and so forth. Local
variables are available only within the logic in which they are declared
476 Part II Labs

and are not defined in the Variables edit table. They are created for each
entity, downtime occurrence, or the like executing a particular section of
logic. A new local variable is created for each entity that encounters an
INT or REAL statement. It exists only while the entity processes the
logic that declared the local variable. Local variables may be passed to
subroutines as parameters and are available to macros.
A local variable must be declared before it is used. To declare a local
variable, use the following syntax:
INT or REAL <name1>{= expression}, <name2>{= expression}
Examples:
INT HourOfDay, WIP
REAL const1 = 2.5, const2 = 5.0
INT Init_Inventory = 170
In Section L7.11 we show you how to use a local variable in your simulation
model logic.

Problem Statement—Tracking Work in Process and Production

In the Poly Casting Inc. machine shop, raw castings arrive in batches of four
every hour. From the raw material store they are sent to the mill, where they un-
dergo a milling operation that takes an average of three minutes with a standard
deviation of one minute (normally distributed). The milled castings go to the
grinder, where they are ground for a duration that is uniformly distributed (mini-
mum four minutes and maximum six minutes) or U(5,1). After grinding, the
ground pieces go to the finished parts store. Run the simulation for 100 hours.
Track the work-in-process inventory and the production quantity.
The complete simulation model layout is shown in Figure L7.18. The loca-
tions are defined as Receiving_Dock, Mill, Grinder, and Finish_Parts_Store
(Figure L7.19). Castings (entity) are defined to arrive in batches of four
(Qty each) every 60 minutes (Frequency) as shown in Figure L7.20. The
processes and routings are shown in Figure L7.21.
Define a variable in your model to track the work-in-process inventory
(WIP) of parts in the machine shop. Also define another variable to track the
production (PROD_QTY) of finished parts (Figure L7.22). Note that both of these
are integer type variables.
In the process table, add the following operation statement in the Receiving
location (Figure L7.21).
WIP = WIP + 1
Add the following operation statements in the outgoing Finish_Parts_Store loca-
tion (Figure L7.21):
WIP = WIP - 1
PROD_QTY = PROD_QTY + 1
Alternatively, these three statements could be written as INC WIP, DEC WIP, and
INC PROD_QTY.
 Lab 7 Basic Modeling Concepts 477

FIGURE L7.18
Layout of Poly Casting Inc.

FIGURE L7.19
Locations at Poly Casting Inc.

FIGURE L7.20
Arrival of castings at Poly Casting Inc.
478 Part II Labs

FIGURE L7.21
Processes and routings for the Poly Casting Inc. model.

FIGURE L7.22
Variables for the Poly Casting Inc. model.

L7.5 Uncertainty in Routing—Track Defects and Rework

Sometimes an entity needs to be routed to a destination from a list of available
lo- cations on a probabilistic basis. The location to which a specific entity is
routed remains uncertain. A certain percentage of entities will be routed to a
specific des- tination. The total of these percentages, however, should be 100
percent.
After processing is completed, a workpiece is frequently inspected and
checked for correctness. If found to be good, the workpiece moves on to the next
operation. If found to be defective, it is either scrapped or reworked. For rework,
the workpiece is sent to one of the earlier operations. The inspection process is
carried out either on all workpieces or on a sample of workpieces.

Problem Statement
Poly Casting Inc. in Section L7.4 decides to add an inspection station at the end
of the machine shop, after the grinding operation. After inspection, 30 percent
of the widgets are sent back to the mill for rework, 10 percent are sent back to
the grinder for rework, and 5 percent are scrapped. The balance, 55 percent,
pass inspection and go on to the finished parts store. The inspection takes a
time that is triangularly distributed with a minimum of 4, mode of 5, and
maximum of 6 minutes. The process times for rework are the same as those for
new jobs. Track the amount of rework at the mill and the grinder. Also
track the amount of scrapped parts and finished production. Run the simulation
for 100 hours.
The locations are defined as mill, grinder, inspection, finish parts store,
receiv- ing dock, scrap parts, mill rework, and grind rework as shown in
Figure L7.23.
 Lab 7 Basic Modeling Concepts 479

FIGURE L7.23
Simulation model layout for Poly Castings Inc. with inspection.

FIGURE L7.24
Variables for the Poly Castings Inc. with inspection model.

The last four locations are defined with infinite capacity. The arrivals of
castings are defined in batches of four every hour. Next we define five vari-
ables (Figure L7.24) to track work in process, production quantity, mill
rework, grind rework, and scrap quantity. The processes and routings are
defined as in Figure L7.25.
480 Part II Labs

FIGURE L7.25
Processes and routings for the Poly Castings Inc. with inspection model.

L7.6 Batching Multiple Entities of Similar Type

L7.6.1 Temporary Batching—GROUP/UNGROUP
Frequently we encounter a situation where widgets are batched and processed
to- gether. After processing is over, the workpieces are unbatched again. For
exam- ple, an autoclave or an oven is fired with a batch of jobs. After heating,
curing, or bonding is done, the batch of jobs is separated and the individual
jobs go their way. The individual pieces retain their properties during the
batching and pro- cessing activities.
For such temporary batching, use the GROUP statement. For unbatching, use
the UNGROUP statement. One may group entities by individual entity type by
defining a process record for the type to group, or group them irrespective of
entity type by defining an ALL process record. ProModel maintains all of the
characteristics and properties of the individual entities of the grouped entities
and allows them to re- main with the individual entities after an UNGROUP
command. Note that the capacity of the location where Grouping occurs must be
at least as large as the group size.

Problem Statement
El Segundo Composites receive orders for aerospace parts that go through cut-
ting, lay-up, and bonding operations. Cutting and lay-up take uniform (20,5)
min- utes and uniform (30,10) minutes. The bonding is done in an autoclave in
batches of five parts and takes uniform (100,10) minutes. After bonding, the
parts go to the shipment clerk individually. The shipment clerk takes normal
(20,5) minutes to get each part ready for shipment. The orders are received on
average once every 60 minutes, exponentially distributed. The time to transport
these parts from one machine to another takes on average 15 minutes. Figure out
the amount of WIP in the shop. Simulate for six months or 1000 working hours.
 Lab 7 Basic Modeling Concepts 481

The locations are defined as Ply_Cutting, LayUp, Oven, Order_Q,

Ship_Clerk, and Ship_Q. The layout of El Segundo Composites is shown in
Figure L7.26. The processes and the routings are shown in Figure L7.27. A
vari- able WIP is defined to keep track of the amount of work in process in the
shop. The WIP value history over the simulated 1000 hours is shown in Figure
L7.28. Note that the average WIP in the shop has been around 7, although on
rare occa- sions the WIP has been as much as 23.

FIGURE L7.26
Layout of El Segundo Composites.

FIGURE L7.27
Process and routing tables for El Segundo Composites.
482 Part II Labs

FIGURE L7.28
Work in process value history.

L7.6.2 Permanent Batching—COMBINE

In some situations, multiple entities of the same type or different types are
batched together permanently. After batching, a single batch entity is formed,
alternatively with a different name. In such permanent batching, the characteris-
tics of the individual entities are lost; that is, the individual entities cannot be
ungrouped later.
When defining the location, the capacity of the location where you use the
COMBINE statement should be at least as large as the combined quantity.

Problem Statement
At the Garden Reach plant of the Calcutta Tea Company, the filling machine
fills empty cans with 50 bags of the best Darjeeling tea at the rate of one can
every 1±0.5 seconds uniformly distributed. The tea bags arrive to the packing
line with a mean interarrival time of one second exponentially distributed. The
filled cans go to a packing machine where 20 cans are combined into one box.
The packing operation takes uniform (20±10) seconds. The boxes are shipped
to the dealers. This facility runs 24 hours a day. Simulate for one day.
The various locations at the Calcutta Tea Company plant are shown in Fig-
ure L7.29. Three entities (Teabag, Can, and Box) are defined next. Teabags are
defined to arrive with exponential interarrival time with a mean of one second.
The processes and routing logic are shown in Figure L7.30. The layout of the
Calcutta Tea Company plant is shown in Figure L7.31.
 Lab 7 Basic Modeling Concepts 483

FIGURE L7.29
Locations at the Calcutta Tea Company.

FIGURE L7.30
Process and routing tables at the Calcutta Tea Company.

FIGURE L7.31
Layout of the Calcutta
Tea Company.
484 Part II Labs

L7.7 Attaching One or More Entities to Another Entity

L7.7.1 Permanent Attachment—JOIN
Sometimes one or more entities are attached permanently to another entity, as in
an assembly operation. The assembly process is a permanent bonding: the
assem- bled entities lose their separate identities and properties. The individual
entities that are attached cannot be separated again.
The join process is used to permanently assemble two or more individual
en- tities together. For every JOIN statement, there must be a corresponding If
Join Request rule. Joining is a two-step process:
1. Use the JOIN statement at the designated assembly location.
2. Use the join routing rule for all joining entities.
One of the joining entities, designated as the “base” entity, issues the JOIN
state- ment. All other joining entities must travel to the assembly location on an
If Join Request routing rule.

Problem Statement
At Shipping Boxes Unlimited computer monitors arrive at Monitor_Q at the
rate of one every 15 minutes (exponential) and are moved to the packing table.
Boxes arrive at Box_Q, at an average rate of one every 15 minutes (exponential)
and are also moved to the packing table. At the packing table, monitors are
packed into boxes. The packing operation takes normal (5,1) minutes. Packed
boxes are sent to the inspector (Inspect_Q). The inspector checks the contents
of the box and tallies with the packing slip. Inspection takes normal (4,2)
minutes. After inspec- tion, the boxes are loaded into trucks at the shipping
dock (Shipping_Q). The loading takes uniform (5,1) minutes. Simulate for 100
hours. Track the number of monitors shipped and the WIP of monitors in the
system.
The locations at Shipping Boxes Unlimited are defined as Monitor_Q,
Box_Q, Shipping_Q, Inspect_Q, Shipping_Dock, Packing_Table, and Inspector.
All the queue locations are defined with a capacity of infinity. Three entities
(Monitor, Empty Box, and Full_Box) are defined next. The arrivals of monitors
and empty boxes are shown in Figure L7.32. The processes and routings
are shown in Figure L7.33. A snapshot of the simulation model is captured in

FIGURE L7.32
Arrival of monitors and empty boxes at Shipping Boxes Unlimited.
 Lab 7 Basic Modeling Concepts 485

FIGURE L7.33
Processes and routings for Shipping Boxes Unlimited.

FIGURE L7.34
A snapshot of the simulation model for Shipping Boxes Unlimited.

Figure L7.34. The plot of the work-in-process inventory for the 100 hours of
sim- ulation run is shown in Figure L7.35. Note that the work-in-process
inventory rises to as much as 12 in the beginning. However, after achieving
steady state, the WIP inventory stays mostly within the range of 0 to 3.
486 Part II Labs

FIGURE L7.35
Time-weighted plot of the WIP inventory at Shipping Boxes Unlimited.

L7.7.2 Temporary Attachment—LOAD/UNLOAD

Sometimes one or more entities are attached to another entity temporarily,
processed or moved together, and detached later in the system. In ProModel, we
use the LOAD and UNLOAD statements to achieve that goal. The properties of the
in- dividual attached entities are preserved. This of course requires more
memory space and hence should be used only when necessary.

Problem Statement
For the Shipping Boxes Unlimited problem in Section L7.7.1, assume the in-
spector places (loads) a packed box on an empty pallet. The loading takes any-
where from two to four minutes, uniformly distributed. The loaded pallet is sent
to the shipping dock and waits in the shipping queue. At the shipping dock, the
packed boxes are unloaded from the pallet. The unloading time is also uniformly
distributed; U(3,1) min. The boxes go onto a waiting truck. The empty pallet is
re- turned, via the pallet queue, to the inspector. One pallet is used and
recirculated in the system. Simulate for 100 hours. Track the number of
monitors shipped and the WIP of monitors.
The locations defined in this model are Monitor_Q, Box_Q, Inspect_Q,
Ship- ping_Q, Pallet_Q, Packing_Table, Inspector, and Shipping_Dock (Figure
L7.36). All queue locations have infinite capacity. The layout of Shipping
Boxes Unlim- ited is shown in Figure L7.37. Five entities are defined:
Monitor, Box, Empty_Box, Empty_Pallet, and Full_Pallet as shown in
Figure L7.38. The
 Lab 7 Basic Modeling Concepts 487

FIGURE L7.36
The locations at Shipping Boxes Unlimited.

FIGURE L7.37
Boxes loaded on
pallets at Shipping
Boxes Unlimited.

arrivals of monitors, empty boxes, and empty pallets are shown in Figure L7.39.
The processes and routings are shown in Figure L7.40. Note that comments can
be inserted in a line of code as follows (Figure L7.40):
/* inspection time */

The plot of thein work-in-process

is∼ presented Figure L7.41. inventory
Note thatforafter
the 100
the hours
initial oftransient
simulation run
period
( =1200
minutes), the work-in-process inventory drops and stays mostly in a range of 0–2.
488 Part II Labs

FIGURE L7.38
Entities at Shipping Boxes Unlimited.

FIGURE L7.39
Arrival of monitors, empty boxes, and empty pallets at Shipping Boxes Unlimited.

FIGURE L7.40
Process and routing tables at Shipping Boxes Unlimited.
 Lab 7 Basic Modeling Concepts 489

FIGURE L7.41
Time-weighted plot of the WIP inventory at Shipping Boxes Unlimited.

L7.8 Accumulation of Entities

Sometimes we need to hold entities at a location until a certain number accumu-
late. Once this critical limit is reached, the entities are released for further pro-
cessing downstream. This allows us to model a certain type of batching that in-
volves simply the accumulation of parts and their subsequent release—all at a
single location. The capacity of the location at which the accumulation takes
place must be at least as large as the accumulation limit or the amount of
accumulation.

Problem Statement
Visitors arrive at California Adventure Park in groups that vary in size from
two to four (uniformly distributed). The average time between arrival of two
successive groups is five minutes, exponentially distributed. All visitors wait
in front of the gate until five visitors have accumulated. At that point the gate
opens and allows the visitors to enter the park. On average, a visitor spends
20±10 minutes (uniformly distributed) in the park. Simulate for 1000 hours.
Track how many visitors are waiting outside the gate and how many are in
the park.
Three locations (Gate_In, Walk_In_Park, and Gate_Out) are defined in this
model. Visitor is defined as the entity. The processes and the layout of the adven-
ture park are shown in Figures L7.42 and L7.43.
490 Part II Labs

FIGURE L7.42
Process and routing tables for California Adventure Park.

FIGURE L7.43
Layout of California Adventure Park.

L7.9 Splitting of One Entity into Multiple Entities

When a single incoming entity is divided into multiple entities at a location and
processed individually, we can use the SPLIT construct. The SPLIT
command splits the entity into a specified number of entities, and optionally
assigns them a new name. The resulting entities will have the same attribute
values as the origi- nal entity. Use SPLIT to divide a piece of raw material into
components, such as a silicon wafer into silicon chips or six-pack of cola into
individual cans.

Problem Statement
The cafeteria at San Dimas High School receives 10 cases of milk from a
vendor each day before the lunch recess. On receipt, the cases are split open and
individual
 Lab 7 Basic Modeling Concepts 491

cartons (10 per case) are stored in the refrigerator for distribution to students
dur- ing lunchtime. The distribution of milk cartons takes triangular(.1,.15,.2)
minute per student. The time to split open the cases takes a minimum of 5
minutes and a maximum of 7 minutes (uniform distribution) per case. Moving
the cases from re- ceiving to the refrigerator area takes five minutes per case,
and moving the cartons from the refrigerator to the distribution area takes 0.2
minute per carton. Students wait in the lunch line to pick up one milk carton
each. There are only 100 students at this high school. Students show up for
lunch with a mean interarrival time of 1 minute (exponential). On average, how
long does a carton stay in the cafeteria before being distributed and consumed?
What are the maximum and the minimum times of stay? Simulate for 10 days.
The layout of the San Dimas High School cafeteria is shown in Figure
L7.44. Three entities—Milk_Case, Milk_Carton, and Student—are defined.
Ten milk cases arrive with a frequency of 480 minutes. One hundred students
show up for lunch each day. The arrival of students and milk cases is shown in
Figure L7.45. The processing and routing logic is shown in Figure L7.46.

FIGURE L7.44
Layout of the San Dimas High School cafeteria.

FIGURE L7.45
Arrival of milk and students at the San Dimas High School cafeteria.
492 Part II Labs

FIGURE L7.46
Process and routing logic at the San Dimas High School cafeteria.

L7.10 Decision Statements

In ProModel you can make use of several general control statements for decision
making. ProModel meets the modern standards of structured program design.
Al- though there is no formal definition, computer scientists agree that a
structured program should have modular design and use only the following
three types of logical structures: sequences, decisions, and loops.
• Sequences: Program statements are executed one after another.
• Decisions: One of two blocks of program code is executed based on a
test for some condition.
• Loops: One or more statements are executed repeatedly as long as
a specified condition is true.
All the control statements available in ProModel are shown in Figure L7.47.
In this section we introduce you to some of these statements with examples.

L7.10.1 IF-THEN-ELSE Statement

An IF block allows a program to decide on a course of action based on whether
a certain condition is true or false. A program block of the form
IF condition THEN
action1
ELSE action2

causes the program to take action1 if condition is true and action2 if condition is
false. Each action consists of one or more ProModel statements. After an action
is taken, execution continues with the line after the IF block.

Problem Statement
The Bombay Restaurant offers only a drive-in facility. Customers arrive at the
rate of six each hour (exponential interarrival time). They place their orders at
the first window, drive up to the next window for payment, pick up food from
the last window, and then leave. The activity times are given in Table L7.4. The
drive-in facility can accommodate 10 cars at most. However, customers
typically leave
 Lab 7 Basic Modeling Concepts 493

FIGURE L7.47
Control statements
available in
ProModel.

TABLE L7.4 Process Times at the Bombay Restaurant

Activity Process Time (minutes)

Order food Normal (5,1)

Make payment Normal (7,2)
Pick up food Normal (10,2)

and go to the Madras Café across the street if six cars are waiting in line when
they arrive. Simulate for 100 days (8 hours each day). Estimate the number of
cus- tomers served each day. Estimate on average how many customers are lost
each day to the competition.
An additional location (Arrive) is added to the model. After the customers
ar- rive, they check if there are fewer than six cars at the restaurant. If yes, they
join the line and wait; if not, they leave and go across the street to the Madras
Café. An IF-THEN-ELSE statement is added to the logic window in the
processing table (Figure L7.48). A variable (Customer_Lost) is added to the
model to keep track of the number of customers lost to the competition. The
layout of the Bombay
494 Part II Labs

FIGURE L7.48
Process and routing logic at the Bombay Restaurant.

FIGURE L7.49
Layout of the Bombay
Restaurant.

Restaurant is shown in Figure L7.49. Note that Q_1 and Q_2 are each 100 feet
long and Q_3 is 200 feet long.
The total number of customers lost is 501 in 100 days. The number of
customers served in 100 days is 4791. The average cycle time per customer is
36.6 minutes.

L7.10.2 WHILE-DO Loop

The WHILE-DO block repeats a group of statements continuously while a condition
remains true. If the condition is false, the loop is bypassed.
 Lab 7 Basic Modeling Concepts 495

FIGURE L7.50
An example of the WHILE-DO logic for Shipping Boxes Unlimited.

Problem Statement
The inspector in Section L7.7.2 is also the supervisor of the shop. As such, she
inspects only when at least five full boxes are waiting for inspection in the
Inspect_Q. A WHILE-DO loop is used to check if the queue has five or more
boxes waiting for inspection (Figure L7.50). The loop will be executed
every hour. Figure L7.51 shows a time-weighted plot of the contents of the
inspection queue. Note how the queue builds up to 5 (or more) before the
inspector starts inspecting the full boxes.

L7.10.3 DO-WHILE Loop

The DO-WHILE block repeats a group of statements continuously while a
condition remains true. This loop will be executed at least once; use it for
processes that will be executed at least once and possibly more.

Problem Statement
For the Poly Casting Inc. example in Section L7.4, we would like to assign
an upper limit to the work-in-process inventory in the shop. A DO-WHILE loop
will be used to check if the level of WIP is equal to or above five; if so, the
incoming castings will wait at the receiving dock (Figure L7.52). The loop will
be executed once every hour to check if the level of WIP has fallen below five.
Figure L7.53 show a time-weighted plot of the value of WIP at Poly Castings
Inc. Note that the level of WIP is kept at or below five.
496 Part II Labs

FIGURE L7.51
A plot of the contents of the inspection queue.

FIGURE L7.52
An example of a DO-WHILE loop.

L7.10.4 GOTO Statement

The GOTO block jumps to the statement identified by the designated label. A
label should follow the normal rules for names. A colon follows a label.
Problem Statement
The Indian Bank has acquired the Bank of India in Section L7.3. Anthony has
been given a golden handshake (that is, fired). As a result of new training
provided to the two remaining tellers (Amar and Akbar) there has been a
change in their customer service time. Whenever more than three customers are
waiting for ser- vice, the service time is reduced to an average of five minutes
and a standard de- viation of two minutes (normally distributed). The layout of
the new Indian Bank is shown in Figure L7.54. A GOTO statement is used to
jump to the appropriate wait statement depending on the number of
customers waiting for service in the Teller_Q, as shown in Figure L7.55.
 Lab 7 Basic Modeling Concepts 497

FIGURE L7.53
A plot of the value of WIP at Poly Castings Inc.

FIGURE L7.54
The layout of the
Indian Bank.
498 Part II Labs

FIGURE L7.55
An example of a GOTO statement.

L7.11 Periodic System Shutdown

Some service systems periodically stop admitting new customers for a given du-
ration to catch up on the backlog of work and reduce the congestion. Some auto-
mobile service centers, medical clinics, restaurants, amusement parks, and banks
use this strategy. The modulus mathematical operator in ProModel is useful for
simulating such periodic shutdowns.

Problem Statement
The Bank of India in Section L7.3 opens for business each day for 8 hours (480
minutes). Assume that the customers arrive to the bank according to an
exponen- tial distribution (mean of 4 minutes). All the tellers service the
customers accord- ing to a uniform distribution (mean of 10 minutes and half-
width of 6 minutes). Customers are routed to the three tellers in turn (selected in
rotation).
Each day after 300 minutes (5 hours) of operation, the front door of the
bank is locked, and any new customers arriving at the bank are turned away.
Customers already inside the bank continue to get served. The bank reopens
the front door 90 minutes (1.5 hours) later to new customers. Simulate the
system for 480 min- utes (8 hours). Make a time-series plot of the Teller_Q to
show the effect of lock- ing the front door on the bank.
The logic for locking the front door is shown in Figure L7.56. The
simulation clock time clock(min) is a cumulative counter of hours elapsed since
the start of the simulation run. The current time of any given day can be
determined by mod- ulus dividing the current simulation time, clock(min), by
480 minutes. If the re- mainder of clock(min) divided by 480 minutes is
between 300 minutes (5 hours) and 390 minutes (6.5 hours), the arriving
customers are turned away (disposed). Otherwise, they are allowed into the
bank. An IF-THEN-ELSE logic block as de- scribed in Section L7.10.1 is used
here.
A time-series plot of the contents of the Teller_Q is shown in Figure L7.57.
This plot clearly shows how the Teller_Q (and the whole bank) builds up during
 Lab 7 Basic Modeling Concepts 499

FIGURE L7.56
Process and routing logic for the Bank of India.

FIGURE L7.57
Time-series plot of Teller_Q at the Bank of India.
500 Part II Labs

FIGURE L7.58
Histogram of Teller_Q contents at the Bank of India.

the day; then, after the front door is locked at the fifth hour (300 minutes) into
the simulated day, customers remaining in the queue are processed and the
queue length decreases (down to zero in this particular simulation run). The
queue length picks back up when the bank reopens the front door at simulation
time 6.5 hours (390 minutes).
The histogram of the same queue (Figure L7.58) shows that approximately
49% of the time the queue was empty. About 70% of the time there are 3 or
fewer customers waiting in line. What is the average time a customer spends
in the bank? Would you recommend that the bank not close the door after 5
hours of op- eration (customers never liked this practice anyway)? Will the
average customer stay longer in the bank?

L7.12 Exercises
1. Visitors arrive at Kid’s World entertainment park according to an
exponential interarrival time distribution with mean 2.5 minutes.
The travel time from the entrance to the ticket window is normally
distributed with a mean of three minutes and a standard deviation of
1.5 minute. At the ticket window, visitors wait in a single line until one
 Lab 7 Basic Modeling Concepts 501

of four cashiers is available to serve them. The time for the purchase of
tickets is normally distributed with a mean of five minutes and a
standard deviation of one minute. After purchasing tickets, the visitors
go to their respective gates to enter the park. Create a simulation model,
with animation, of this system. Run the simulation model for 200 hours
to determine
a. The average and maximum length of the ticketing queue.
b. The average number of customers completing ticketing per hour.
c. The average utilization of the cashiers.
d. Whether management should add more cashiers.
2. A consultant for Kid’s World recommended that four individual queues be formed at the ticket window
(one for each cashier) instead of one common queue. Create a simulation model, with animation, of this
system. Run the simulation model for 200 hours to determine
a. The average and maximum length of the ticketing queues.
b. The average number of customers completing ticketing per hour.
c. The average utilization of the cashiers.
d. Whether you agree with the consultant’s decision. Would you
recommend a raise for the consultant?
3. At the Kid’s World entertainment park in Exercise 1, the operating hours are 8 A.M. till 10 P.M. each
day (all week). Simulate for a whole year (365 days) and answer questions a– d as given in Exercise
1.
4. At Southern California Airline’s traveler check-in facility, three types of customers arrive: passengers
with e-tickets (Type E), passengers with paper tickets (Type T), and passengers that need to purchase
tickets (Type P). The interarrival distribution and the service times for these passengers are given in
Table L7.5. Create a simulation model, with animation, of this system. Run the simulation model for
2000 hours.
If separate gate agents serve each type of passenger, determine the
following:
a. The average and maximum length of the three queues.
b. The average number of customers of each type completing check-in
procedures per hour.
c. The average utilization of the gate agents.

TABLE L7.5 Interarrival and Service Time Distributions at Southern

California Airline

Type of Traveler Interarrival Distribution Service Time Distribution

Type E Exponential (mean 5.5 min.) Normal (mean 3 min., std. dev. 1 min.)
Type T Exponential (mean 10.5 min.) Normal (mean 8 min., std. dev. 3 min.)
Type P Exponential (mean 15.5 min.) Normal (mean 12 min., std. dev. 3
min.)
502 Part II Labs

d. The percentage of time the number of customers (of each

type of customer) waiting in line is ≤ 2.
e. Would you recommend one single line for check-in for all three types
of travelers? Discuss the pros and cons of such a change.
5. Raja & Rani, a fancy restaurant in Santa Clara, holds a maximum of 15 diners. Customers arrive
according to an exponential distribution with a mean of 5 minutes. Customers stay in the restaurant
according to a triangular distribution with a minimum of 45 minutes, a maximum of 60 minutes, and
a mode of 75 minutes. Create a simulation model, with animation, of this system. The restaurant
operating hours are 3 P.M. till 12 P.M. Run the simulation model for 50 replications of 9 hours each.
a. Beginning empty, how long (average and standard deviation)
does it take for the restaurant to fill?
b. What is the total number of diners (average and standard
deviation) entering the restaurant before it fills?
c. What is the total number of guests (average and standard
deviation) served per night?
d. What is the average utilization of the restaurant?
6. Woodland Nursing Home has six departments—initial exam, X ray, operating room, cast-fitting
room, recovery room, and checkout room. The probabilities that a patient will go from one
department to another are given in Table L7.6. The time patients spend in each department is given
in Table L7.7. Patients arrive at the average rate of 5 per hour (exponential interarrival time). The
nursing home remains open 24/7.

TABLE L7.6 Probabilities of Patient Flow

From To Probability

Initial exam X ray .35

Operating room .20
Recovery room .15
Checkout room .30
X ray Operating room .15
Cast-fitting room .25
Recovery room .40
Checkout room .20
Operating room Cast-fitting room .30
Recovery room .65
Checkout room .05
Cast-fitting room Recovery room .55
X ray .10
Checkout room .35
Recovery room Operating room .10
X ray .20
Checkout room .70
 Lab 7 Basic Modeling Concepts 503

TABLE L7.7 Patient Processing Time

Department Patient Time in Department

Initial exam Normal (5,2) minutes

X ray Uniform (6,1) minutes
Operating room Normal (30,5) minutes
Cast-fitting room Uniform (10,4) minutes
Recovery room Normal (8,2) minutes

TABLE L7.8 Process Time Distributions at

United Electronics

Assembly Uniform (13.5±1.5) minutes

Soldering Normal (36,10) minutes
Painting Uniform (55±15) minutes
Inspection Exponential (8) minutes

However, every seven hours (420 minutes) the front door is locked for
an hour (60 minutes). No new patients are allowed in the nursing home
during this time. Patients already in the system continue to get served.
Simulate for one year (365 days, 24 hours per day).
a. Figure out the utilization of each department.
b. What are the average and maximum numbers of patients in each
department?
c. Which is the bottleneck department?
d. What is the average time spent by a patient in the nursing home?
7. United Electronics manufactures small custom electronic assemblies. Parts must be processed through
four stations: assembly, soldering, painting, and inspection. Orders arrive with an exponential
interarrival distribution (mean 20 minutes). The process time distributions are shown in Table L7.8.
The soldering operation can be performed on three jobs at a time.
Painting can be done on four jobs at a time. Assembly and inspection
are performed on one job at a time. Create a simulation model, with
animation, of this system. Simulate this manufacturing system for
100 days, eight hours each day. Collect and print statistics on the
utilization of each station, associated queues, and the total number
of jobs manufactured during each eight-hour shift (average).
8. In United Electronics in Exercise 7, 10 percent of all finished assemblies are sent back to soldering
for rework after inspection, five percent are sent back to assembly for rework after inspection, and one
504 Part II Labs

percent of all assemblies fail to pass and are scrapped. Create a

simulation model, with animation, of this system. Simulate this
manufacturing system for 100 days, eight hours each day. Collect and
print statistics on the utilization of each station, associated queues, total
number of jobs assembled, number of assemblies sent for rework to
assembly and soldering, and the number of assemblies scrapped during
each eight-hour shift (average).
9. Small toys are assembled in four stages (Centers 1, 2, and 3 and Inspection) at Bengal Toy Company.
After each assembly step, the appliance is inspected or tested; if a defect is found, it must be
corrected and then checked again. The assemblies arrive at a constant rate of one assembly every two
minutes. The times to assemble, test, and correct defects are normally distributed. The means and
standard deviations of the times to assemble, inspect, and correct defects, as well as the likelihood of
an assembly error, are shown in Table L7.9. If an assembly is found defective, the defect is corrected
and it is inspected again. After a defect is corrected, the likelihood of another defect being found is
the same as during the first inspection. We assume in this model that an assembly defect is eventually
corrected and then it is passed on to the next station. Simulate for one year (2000 hours) and
determine the number of good toys shipped in a year.
10. Salt Lake City Electronics manufactures small custom communication
equipment. Two different job types are to be processed within the following manufacturing cell. The
necessary data are given in
Table L7.10. Simulate the system to determine the average number of
jobs waiting for different operations, number of jobs of each type
finished each day, average cycle time for each type of job, and the
average cycle time for all jobs.
11. Six dump trucks at the DumpOnMe facility in Riverside are used to
haul coal from the entrance of a small mine to the railroad. Figure L7.59 provides a schematic of the
dump truck operation. Each truck is loaded by one of two loaders. After loading, a truck immediately
moves

TABLE L7.9 Process Times and Probability of Defects at Bengal

Toy Company

Assembly Time Inspect Time Correct Time

Standard Standard Standard

Center Mean Deviation Mean Deviation P(error) Mean Deviation

1 .7 .2 .2 .05 .1 .2 .05
2 .75 .25 .2 .05 .05 .15 .04
3 .8 .15 .15 .03 .03 .1 .02
 Lab 7 Basic Modeling Concepts 505

FIGURE L7.59 Truck travel

Schematic of and unload
dump truck
operation for
DumpOnMe.

Loader 1
Weighing
Loader queue Weighing queue scale

Loader 2

TABLE L7.10 Data Collected at Salt Lake City Electronics

Number Time
Number of Jobs between
Job of per Assembly Soldering Painting Inspection Batch
Type Batches Batch Time Time Time Time Arrivals

1 15 5 Tria (5,7,10) Normal (36,10) Uniform (55±15) Exponential (8) Exp (14)
2 25 3 Tria (7,10,15) Uniform (35±5) Exponential (5) Exp (10)

Note: All times are given in minutes.

TABLE L7.11 Various Time Measurement Data

at the DumpOnMe Facility

Loading time Uniform (7.5±2.5) minutes

Weighing time Uniform (3.5±1.5) minutes
Travel time Triangular (10,12,15) minutes

to the scale to be weighed as soon as possible. Both the loaders and the
scale have a first-come, first-served waiting line (or queue) for trucks.
Travel time from a loader to the scale is considered negligible. After
being weighed, a truck begins travel time (during which time the truck
unloads), and then afterward returns to the loader queue. The
distributions of loading time, weighing time, and travel time are shown
in Table L7.11.
a. Create a simulation model, with animation, of this system. Simulate
for 200 days, eight hours each day.
b. Collect statistics to estimate the loader and scale utilization
(percentage of time busy).
c. About how many trucks are loaded each day on average?
506 Part II Labs

12. At the Pilot Pen Company, a molding machine produces pen barrels of
two different colors—red and blue—in the ratio of 3:2. The molding time is triangular (3,4,6) minutes
per barrel. The barrels go to a filling machine, where ink of appropriate color is filled at the rate of 20
pens per hour (exponentially distributed). Another molding machine makes caps of the same two
colors in the ratio of 3:2. The molding time is triangular (3,4,6) minutes per cap. At the next station,
caps and filled barrels of matching colors are joined together. The joining time is exponentially
distributed with a mean of 1 min. Simulate for 2000 hours. Find the average number of pens produced
per hour. Collect statistics on the utilization of the molding machines and the joining equipment.
13. Customers arrive at the NoWaitBurger hamburger stand with an
interarrival time that is exponentially distributed with a mean of one minute. Out of 10 customers, 5
buy a hamburger and a drink, 3 buy a hamburger, and 2 buy just a drink. One server handles the
hamburger while another handles the drink. A person buying both items needs to wait in line for
both servers. The time it takes to serve a customer is N(70,10) seconds for each item. Simulate for
100 hours. Collect statistics on the number of customers served per hour, size of the queues, and
utilization of the servers. What changes would you suggest to make the system more efficient?
14. Workers who work at the Detroit ToolNDie plant must check out tools
from a tool crib. Workers arrive according to an exponential distribution with a mean time between
arrivals of five minutes. At present, three tool crib clerks staff the tool crib. The time to serve a
worker is normally distributed with a mean of 10 minutes and a standard deviation of
2 minutes. Compare the following servicing methods. Simulate for
2000 hours and collect data.
a. Workers form a single queue, choosing the next available tool crib
clerk.
b. Workers enter the shortest queue (each clerk has his or her own
queue).
c. Workers choose one of three queues at random.
15. At the ShopNSave, a small family-owned grocery store, there are only
four aisles: aisle 1—fruits/vegetables, aisle 2—packaged goods (cereals and the like), aisle 3—dairy
products, and aisle 4—meat/fish. The time between two successive customer arrivals is exponentially
distributed with a mean of 5 minutes. After arriving to the store, each customer grabs a shopping cart.
Twenty percent of all customers go to aisle 1,
30 percent go to aisle 2, 50 percent go to aisle 3, and 70 percent go to
aisle 4. The number of items selected for purchase in each aisle is
uniformly distributed between 2 and 8. The time spent to browse and
pick up each item is normally distributed: N(5,2) minutes. There are
three identical checkout counters; each counter has its own checkout
 Lab 7 Basic Modeling Concepts 507

line. The customer chooses the shortest line. Once a customer joins a
line, he or she is not allowed to leave or switch lines. The checkout time
is given by the following regression equation:
Checkout time = N(3,0.3) + (#of items) * N(0.5,0.15) minutes
The first term of the checkout time is for receiving cash or a check or
credit card from the customer, opening and closing the cash register,
and handing over the receipt and cash to the customer. After checking
out, a customer leaves the cart at the front of the store and leaves. Build
a simulation model for the grocery store. Use the model to simulate a
14-hour day.
a. The percentages of customers visiting each aisle do not add up
to 100 percent. Why?
b. What is the average amount of time a customer spends at the
grocery store?
c. How many customers check out per cashier per hour?
d. What is the average amount of time a customer spends waiting in
the checkout line?
e. What is the average utilization of the cashiers?
f. Assuming there is no limit to the number of shopping carts,
determine the average and maximum number of carts in use at any
time.
g. On average how many customers are waiting in line to checkout?
h. If the owner adopts a customer service policy that there will never
be any more than three customers in any checkout line, how many
cashiers are needed?

Embellishments:
I. The store manager is considering designating one of the checkout lines
as Express, for customers checking out with 10 or fewer items. Is that a
good idea? Why or why not?
II. In reality, there are only 10 shopping carts at the ShopNSave store.
If there are no carts available when customers arrive they leave
immediately and go to the more expensive ShopNSpend store down the
street. Modify the simulation model to reflect this change. How many
customers are lost per hour? How many shopping carts should they
have so that no more than 5 percent of customers are lost?
16. Planes arrive at the Netaji Subhash Chandra Bose International
Airport, Calcutta with interarrival times that are exponentially distributed with a mean time of 30
minutes. If there is no room at the airport when a plane arrives, the pilot flies around and comes back to
land after a normally distributed time having a mean of 20 minutes and a standard deviation of 5
minutes. There are two runways and three gates at this small airport. The time from touchdown to
arrival at a gate is normally distributed having a mean of five minutes and a standard
508 Part II Labs

deviation of one minute. A maximum of three planes can be unloaded

and loaded at the airport at any time. The times to unload and load a
plane are uniformly distributed between 20 and 30 minutes. The
pushoff, taxi, and takeoff times are normally distributed with a mean of
six minutes and a standard deviation of one minute. The airport
operates 24/7. Build a simulation model and run it for one year.
a. How much will adding a new gate decrease the time that airplanes
have to circle before landing?
b. Will adding a new gate affect the turnaround time of airplanes at the
airport? How much?
c. Is it better to add another runway instead of another gate? If so, why?
Harrell−Ghosh−Bo II. 8. Model © The
wden: Simulation Labs Verification and McGraw−Hill
Using ProModel, Validation Companies,
Second Edition

L A B

8 MODEL
VERIFICATION AND
VALIDATION

Dew knot trussed yore spell chequer two fined awl yore mistakes.
—Brendan Hills

In this lab we describe the verification and validation phases in the development
and analysis of simulation models. In Section L8.1 we describe an inspection
and rework model. In Section L8.2 we show how to verify the model by
tracing the events in it. Section L8.3 shows how to debug a model. The
ProModel logic, basic, and advanced debugger options are also discussed.

L8.1 Verification of an Inspection and Rework Model

Problem Statement
Bombay Clothing Mill is a textile manufacturer, importer, and reseller. Boxes of
gar- ments arrive (three per hour, exponentially distributed) from an overseas
supplier to the Bombay Clothing mill warehouse in Bombay for identification
and labeling, in- spection, and packaging (Figure L8.1). The identification and
labeling take U(10,2), inspection takes N(5,1), and packaging takes N(4,0.25)
minutes. At times the label- ing machine malfunctions. The labeling mistakes
are detected during inspection. Sixty percent of the garments are labeled properly
and go on to the packaging area; however, 40 percent of the garments are sent
back for rework (relabeling). Garments sent back for rework have a higher
priority over regular garments at the labeling ma- chine. Movement between all
areas takes one minute. Simulate for 100 hours.
Priorities determine which waiting entity or downtime is permitted to access
a location or resource when the location or resource becomes available.
Priorities may be any value between 0 and 999 with higher values having
higher priority. For simple prioritizing, you should use priorities from 0 to 99.

509
510 Part II Labs

FIGURE L8.1
Layout of the Bombay
Clothing Mill.

FIGURE L8.2
Locations at the
Bombay Clothing
Mill warehouse.

FIGURE L8.3
Process and routing tables at the Bombay Clothing Mill.

Five locations (Ship_In, Label_Q, Relabel_Q, Labeling, Inspection, and

Pack_Ship) are defined as shown in Figure L8.2. Two entities (Garments and Re-
label) are defined next. The processes and routing logic are defined as shown in
Figure L8.3. Note that the garments sent back for relabeling have a higher prior-
ity of 2 to access the labeling machine location as opposed to a lower priority of
1 for incoming garments.
 Lab 8 Model Verification and Validation 511

L8.2 Verification by Tracing the Simulation Model

Now we will run the model developed in the previous section with the Trace fea-
ture on. Trace will list events as they happen during a simulation. A trace is a
list of events that occur during a simulation. For example, a line in the trace
could read, “EntA arrives at Loc1, Downtime for Res1 begins.” A trace listing
also dis- plays assignments, such as variable and array element assignments. A
trace listing of a simulation run may be viewed in several ways and is generated
in one of two modes, Step or Continuous.
• Off: Select this option to discontinue a trace.
• Step: Choose this option to step through the trace listing one event at a
time. Each time you click the left mouse button, the simulation will
advance one event. Clicking and holding the right mouse button while in
this mode generates a continuous trace.
• Continuous: Choose this option to write the trace continuously to the
output device selected from the Trace Output submenu. This is useful
when you do not know exactly where to begin or end the trace. Clicking
and holding the right mouse button causes the trace to stop until the right
mouse button is released.
Run the simulation model. Choose Trace from the Options menu. You can
choose either the step mode or the continuous mode for running Trace (Figure
L8.4). Choose the step mode for now. The trace output can be sent either to the
Window or to a file (Figure L8.5). Let’s choose to send the output to the
Window.
The trace prompts are displayed at the bottom of the screen as shown in Fig-
ure L8.6. Follow the trace prompts and verify that the model is doing what it is
supposed to be doing. Make sure through visualization and the trace messages
that the rework items are indeed given higher priority than first-time items.
Also, from the garment and relabel queue contents shown in Figure L8.7, notice
that the relabel queue is quite small, whereas the garment queue grows quite big
at times (as a result of its lower priority for the labeling operation).

FIGURE L8.4 FIGURE L8.5

Trace modes in Trace output options in ProModel.
ProModel.
512 Part II Labs

FIGURE L8.6
Tracing the simulation
model of the Bombay
Clothing Mill
warehouse.

FIGURE L8.7
Plots of garment and relabel queue contents.
 Lab 8 Model Verification and Validation 513

L8.3 Debugging the Simulation Model

The debugger (Figure L8.8) is a convenient, efficient way to test or follow the
pro- cessing of any logic in your model. The debugger is used to step through
the logic one statement at a time and examine variables and attributes while a
model is run- ning. All local variables, current entity attributes, and so forth are
displayed, and the user has full control over what logic gets tracked, even down
to a specific en- tity at a specific location (Figure L8.9).

FIGURE L8.8
Debugger options
menu.

FIGURE L8.9
The ProModel
Debugger menu.
514 Part II Labs

The user can launch the debugger using a DEBUG statement within the
model code or from the Options menu during run time. The system state can be
monitored to see exactly when and why things occur. Combined with the
Trace window, which shows the events that are being scheduled and executed,
the debugger en- ables a modeler to track down logic errors or model bugs.

L8.3.1 Debugging ProModel Logic

Before we discuss the details of the debugger, it is important to understand the
following terms:
• Statement: A statement in ProModel performs some operation or
takes some action—for example, JOIN, WAIT, USE, MOVE, and so on
(refer to the ProModel Reference Guide for more information on all
ProModel statements).
• Logic: Logic is the complete set of statements defined for a particular
process record, downtime event, initialization or termination of the
simulation, and so forth.
• Thread: A thread is a specific execution of any logic. A thread is
initiated whenever logic needs to be executed. This can be an entity
running through operation logic, the initialization logic, a resource
running some node logic, downtime logic, or any other logic. Note that
the same logic may be running in several threads at the same time. For
example, three entities of the same type being processed simultaneously
at the same multicapacity location would constitute three threads.
Even though several threads can execute the same logic at the same time in
the simulation, the simulation processor can process them only one at a time. So
there is really only one current thread, while all other threads are suspended
(either scheduled for some future simulation time or waiting to be executed after
the current thread at the same simulation instant).
Every time logic is executed, a thread that is assigned a unique number exe-
cutes it. THREADNUM returns the number of the thread that called the function.
This function can be used with the IF-THEN and DEBUG statements to bring up
the de- bugger at a certain process.
For example, for ElSegundo Composites, from Lab 7, Section L7.6.1, sup-
pose the GROUP quantity has been typed as –5 (typo). A debug statement
IF THREADNUM () 39 THEN DEBUG has been added to the operation logic at
the Oven location that causes the error, as shown in Figure L8.10. The
simulation will run until the proper process and then bring up the debugger
(Figure L8.11). The debugger can then be used to step through the process to
find the particular state- ment causing the error.

L8.3.2 Basic Debugger Options

The debugger can be used in two modes: Basic and Advanced. The Basic Debug-
ger appears initially, with the option of using the Advanced Debugger. The Basic
 Lab 8 Model Verification and Validation 515

FIGURE L8.10
An example of a DEBUG statement in the processing logic.

FIGURE L8.11
The Debugger window.

Debugger (Figure L8.11) has the following options:

• Error display box: Displays the error message or reason why the
debugger is displayed, such as the user condition becoming true.
• Logic display box: Displays the statements of the logic being executed.
• Information box: Displays either the context of the logic or local
information.
• Context: Displays the module, operation, and line number in which the
debugger stopped.
• Local information: Displays local variables and entity attributes
with nonzero values for the thread in the information box.
• End Simulation: Choose this option to terminate simulation. This
will prompt for whether or not you would like to collect statistics.
516 Part II Labs

• Run: Continues the simulation, but still checks the debugger options
selected in the Debugger Options dialog box.
• Next Statement: Jumps to the next statement in the current logic. Note
that if the last statement executed suspends the thread (for example, if
the entity is waiting to capture a resource), another thread that also meets
the debugger conditions may be displayed as the next statement.
• Next Thread: Brings up the debugger at the next thread that is initiated or
resumed.
• Into Subroutine: Steps to the first statement in the next subroutine
executed by this thread. Again, if the last statement executed suspends
the thread, another thread that also meets debugger conditions may be
displayed first. If no subroutine is found in the current thread, a message
is displayed in the Error Display box.
• Options: Brings up the Debugger Options dialog box. You may also bring
up this dialog box from the Simulation menu.
• Advanced: Changes the debugger to Advanced mode.

L8.3.3 Advanced Debugger Options

The Advanced Debugger (Figure L8.12) contains all the options in the Basic
Debugger plus a few advanced features:
• Next (Thread): Jumps to the next thread that is initiated or resumed. This
button has the same functionality as the Next Thread button in the Basic
Debugger.
• New (Thread): Jumps to the next thread that is initiated.
• Disable (Thread): Temporarily disables the debugger for the current
thread.
• Exclusive (Thread): The Debugger displays the statements executed
within the current thread only. When the thread terminates, the Exclusive
setting is removed.
• Next (Logic): Jumps to the next initiated or resumed thread that is not
executing the same logic as the current thread.
• New (Logic): Jumps over any resumed threads to the next initiated thread
that is not executing the same logic as the current thread. This will
automatically jump to a new thread.
• Disable (Logic): Temporarily disables the debugger for all threads
executing the current logic.
• Exclusive (Logic): The debugger displays only the statements executed
in any thread that are an instance of the current logic.
• Enable disabled threads and logics: Enables the threads and logics that
were disabled previously.
For more information and detailed examples of how to use the various
debugger options, consult the ProModel Users Guide.
 Lab 8 Model Verification and Validation 517

FIGURE L8.12
The ProModel
Advanced Debugger
options.

L8.4 Exercises
1. For the example in Section L8.1, insert a DEBUG statement when a
garment is sent back for rework. Verify that the simulation model is
actually sending back garments for rework to the location named
Label_Q.
2. For the example in Section L7.1 (Pomona Electronics), trace the model
to verify that the circuit boards of type B are following the routing given
in Table L7.1.
3. For the example in Section L7.5 (Poly Casting Inc.), run the simulation
model and launch the debugger from the Options menu. Turn on the
Local Information in the Basic Debugger. Verify the values of the
variables WIP and PROD_QTY.
4. For the example in Section L7.3 (Bank of India), trace the model to
verify that successive customers are in fact being served by the three
tellers in turn.
5. For the example in Section L7.7.2 (Shipping Boxes Unlimited), trace the
model to verify that the full boxes are in fact being loaded on empty
pallets at the Inspector location and are being unloaded at the Shipping
location.
Harrell−Ghosh−Bo II. 9. Simulation © The
wden: Simulation Labs Output McGraw−Hill
Using ProModel, Analysis Companies,
Second Edition

L A B

9 SIMULATION
OUTPUT ANALYSIS

Nothing has such power to broaden the mind as the ability to investigate
system- atically and truly all that comes under thy observation in life.
—Marcus Aurelius

In this lab we review the differences between terminating and nonterminating

simulations. You will learn how to collect observations of a performance metric
from both terminating and nonterminating simulations using ProModel. Key
problems of identifying the warm-up period and selecting the run length of a
non- terminating simulation are addressed in the lab. We also illustrate how
supporting software can be used to help determine if the observations reported
by ProModel for a simulation are independent and normally distributed.

L9.1 Terminating versus Nonterminating Simulations

A terminating simulation has a fixed starting condition and a fixed ending
condi- tion (terminating point). For example, a simulation model of a store that
opens at 9:00 A.M. begins with a starting condition of no customers in the
system and ter- minates after the store closes at 7:00 P.M. and the last customer
is processed. Many service-oriented systems (banks, doctors’ offices, post
offices, schools, amuse- ment parks, restaurants, and department stores) are
analyzed with a terminating simulation. The system returns to a fixed starting
condition after reaching a nat- ural terminating event.
A nonterminating simulation has neither a fixed starting condition nor a
nat- ural ending condition. The simulation cannot run indefinitely, so we end it
after its output reflects the long-term average behavior of the system. A
hospital or a 24-hour gas station could be analyzed with a nonterminating
simulation depend- ing on the objective of the study. Many systems appear to
be terminating but in

519
520 Part II Labs

reality are nonterminating. Systems that close/terminate but do not go back to a

fixed starting condition (empty for example) are usually analyzed with nontermi-
nating simulations. For example, a production system that uses the current day’s
unfinished work as the next day’s starting work is really a nonterminating
system. If we compress time by removing the intervals during which the system
is closed, it behaves as a continuously operating system with no point at which
the system starts anew. In general, most manufacturing systems are
nonterminating. The work-in- process inventory from one day is typically
carried forward to the next day.
When we report the simulation model’s response based on the output from a
terminating simulation or a nonterminating simulation, it is important to use in-
terval estimates rather than simple point estimates of the parameter being mea-
sured. The advantage of the interval estimate is that it provides a measure of the
variability in output produced by the simulation. Interval estimates or confidence
intervals provide a range of values around the point estimate that have a
specified likelihood of containing the parameter’s true but unknown value. For a
given con- fidence level, a smaller confidence interval is considered better than
a larger one. Similarly, for a given confidence interval, a higher confidence
level indicates a better estimate. To construct the confidence interval, the
observations produced by replications or batch intervals need to be independent
and identically distributed. Furthermore, the observations should be normally
distributed when using the Stu- dent’s t distribution to calculate the confidence
interval. We can fudge a little on the normality assumption but not on the
independence and identically distribution requirements. These topics are
elaborated on in Chapter 9.

L9.2 Terminating Simulation

Problem Statement
Spuds-n-More by the Seashore is a favorite among vacationers at the seaside
re- sort. Spuds-n-More, a takeout fast-food restaurant, specializes in potato
foods, serving many different varieties of french fries, waffle fries, and potato
logs along with hamburgers and drinks. Customers walking along the
boardwalk access the restaurant via a single ordering window, where they place
their orders, pay, and receive their food. There is no seating in the restaurant.
The interarrival time of customers to Spuds-n-More is exponentially distributed
with a mean of six min- utes. The activity times are given in Table L9.1. The
waiting area in front of the walkup window can accommodate only five
customers. If the waiting area is filled

TABLE L9.1 Process Times at Spuds-n-More by the Seashore

Activity Process Time (minutes)

Order food E(2)

Make payment E(1.5)
Pick up food E(5)
Lab 9 Simulation Output Analysis 521

to capacity when a customer arrives, the customer bypasses Spuds-n-More.

Mr. Taylor closes the entryway to the waiting area in front of his restaurant after
eight hours of operation. However, any customers already in the waiting area by
the closing time are served before the kitchen shuts down for the day.
Mr. Taylor is thinking about expanding into the small newspaper stand next
to Spuds-n-More that has been abandoned. This would allow him to add a
second win- dow to serve his customers. The first window would be used for
taking orders and collecting payments, and the second window would be used
for filling orders. Before investing in the new space, however, Mr. Taylor needs
to convince the major stock- holder of Spuds-n-More, Pritchard Enterprises, that
the investment would allow the restaurant to serve more customers per day. The
first step is to build a baseline (as-is) model of the current restaurant
configuration and then to embellish the model with the new window and
measure the effect it has on the number of customers processed per day. Mr.
Taylor is interested in seeing a 90 percent confidence interval for the number of
customers processed per day in the baseline simulation.

L9.2.1 Starting and Terminating Conditions (Run Length)

Build the baseline model of the as-is restaurant and conduct a terminating
simula- tion to estimate the expected number of customers served each day. The
starting condition for the simulation is that the system begins in the morning
empty of cus- tomers with the first customer arriving at time zero. Customers
are admitted into the restaurant’s queue over the eight hours of operation. The
simulation termi- nates after reaching eight hours and having processed the last
customer admitted into the queue. The layout of the simulation model is shown
in Figure L9.1, and a printout of the model is given in Figure L9.2. Note that the
length of the Order_Q location is 25 feet and the Customer entity travel speed
is 150 feet per minute. These values affect the entity’s travel time in the queue
(time for a customer to walk to the end of the queue) and are required to
match the results presented in this lab. The model is included on the CD
accompanying the book under file name Lab 9_2_1 Spuds-n-More1.MOD.
Let’s take a look at the model listing in Figure L9.2 to see how the
termina- tion criterion was implemented. The Entry location serves as a gate
for allowing customers into the queue until the simulation clock time reaches
eight hours. En- tities arriving after the simulation clock reaches eight hours
are turned away (routed to Exit) by the routing rule User Condition (IF
clock(hr) > 8) at the Entry location. Entities arriving within eight hours
are routed to the Order_Q location (see routing rule User Condition IF
clock(hr) <= 8). Two global vari- ables are declared to count the number
of entities arriving at the Order_Q location and the number of entities
processed at the Order_Clerk location. See the state- ment Inc Arrivals at
the Order_Q location and the statement Inc Processed at the Order_Clerk
location. The Inc statement increments the variable’s value by one each
time it is executed. As the entities that arrive after eight hours of simula- tion
time are turned away to the Exit, the number of entities processed by the
Order_Clerk is compared to the number of entities allowed into the Order_Q
(see Move Logic). If Processed = Arrivals, then all entities that were
allowed into the
522 Part II Labs

FIGURE L9.1
Layout of the Spuds-n-More simulation model.

Order_Q have been processed and the simulation is terminated by the Stop
state- ment. Notice that the combined capacity of the Entry and Order_Q
locations is five in order to satisfy the requirement that the waiting area in front
of the restau- rant accommodates up to five customers.
We have been viewing the output from our simulations with ProModel’s
new Output Viewer 3DR. Let’s conduct this lab using ProModel’s traditional
Output Viewer, which serves up the same information as the 3DR viewer but
does so a little faster. To switch viewers, select Tools from the ProModel main
menu bar and then select Options. Select the Output Viewer as shown in Figure
L9.3.

L9.2.2 Replications
Run the simulation for five replications to record the number of customers
served each day for five successive days. To run the five replications, select
Options from under the Simulation main menu. Figure L9.4 illustrates the
simulation options set to run five replications of the simulation. Notice that no
run hours are specified.
 Lab 9 Simulation Output Analysis 523

FIGURE L9.2
The simulation model of Spuds-n-More.

After ProModel runs the five replications, it displays a message asking if you
wish to see the results. Answer yes.
Next ProModel displays the General Report Type window (Figure L9.5).
Here you specify your desire to see the output results for “<All>” replications
and then click on the Options . . . button to specify that you wish the output
report to also include the sample mean (average), sample standard deviation,
and 90 per- cent confidence interval of the five observations collected via the
five replications. The ProModel output report is shown in Figure L9.6. The
number of customers processed each day can be found under the Current Value
column of the output report in the VARIABLES section. The simulation results
indicate that the number of customers processed each day fluctuates randomly.
The fluctuation may be
524 Part II Labs

FIGURE L9.3
ProModel’s Default
Output Viewer set to
Output Viewer.

FIGURE L9.4
ProModel’s Simulation
Options window set to
run five replications of
the simulation.

attributed to variations in processing times or customer arrivals. It is obvious

that we cannot reliably use the observation from a single day’s simulation to
estimate the expected number of customers served each day. The results from a
single day could produce an estimate as small as 59 or as large as 67. Either
value could be a very poor estimate of the true expected number of customers
served each day.
The average number of customers processed over the five days is
computed as x¯ = 62.20 (Figure L9.6). This provides a much better point
estimate of the ex- pected daily service rate (number of customers processed
each day), but it fails to capture any information on the variability of our
estimate. The sample deviation of s = 3.27 customers per day provides that
information. The most valuable piece of information is the 90 percent
confidence interval computed by ProModel using
 Lab 9 Simulation Output Analysis 525

FIGURE L9.5
ProModel General
Report Options set to
display the results
from all replications as
well as the average,
standard deviation,
and 90 percent
confidence interval.

FIGURE L9.6
ProModel output report for five replications of the Spuds-n-More simulation.
526 Part II Labs

the sample mean and sample standard deviation. With approximately 90 percent
confidence, the true but unknown mean number of customers processed per day
falls between 59.08 and 65.32 customers. These results convince Mr. Taylor that
the model is a valid representation of the actual restaurant, but he wants to get
a better estimate of the number of customers served per day.

L9.2.3 Required Number of Replications

The advantage of the confidence interval estimate is that it quantifies the error in
the point estimate. A wide confidence interval implies that the point estimate is
not very accurate and should be given little credence. The width of the
confidence in- terval is a function of both the variability of the system and the
amount of data collected for estimation. We can make the confidence interval
smaller by collect- ing more data (running more replications). However, for
highly variable systems, one may need a lot of data to make extremely precise
statements (smaller confi- dence intervals). Collecting the data may be very
time consuming if the simula- tion takes long to run. Hence, we sometimes
have to make a judicious choice about the amount of precision required.
The half-width of the 90 percent confidence interval based on the five
replications is 3.12 customers (65.32 C.I. High – 62.20 Average). How many
additional replications are needed if Mr. Taylor desires a confidence interval
half- width of 2.0 customers? Using the technique described in Section 9.2.3 of
Chapter 9 we have
e = hw = 2.0 customers
α = significance level = 0.10 for a 0.90 confidence level

nt = ( Z α/2 ) (t )s (1.645)3.27 = 7.23 replications

2 2
2
s ∞,α/2
=
e = 2.0
e

The value of 7.23 is appropriately rounded up to 8 replications. The n t = 8

pro- vides a rough approximation of the number of replications that are
needed to achieve the requested error amount e = 2.0 customers at the 0.10
significance level. Running an additional three replications of the Spuds-n-
More baseline sim- ulation and combining the output with the output from
the original five replica- tions produces a sample mean of 61.50 customers
and an approximate 90 percent confidence interval of 58.99 to 64.00
customers. You should verify this. Although the confidence interval half-
width of 2.51 customers is larger than the target value of 2.0 customers, it is
smaller than the half-width of the confidence interval based on five
replications. We could keep running additional replications to get closer to
the target half-width of 2.0 customers if we like.

L9.2.4 Simulation Output Assumptions

To compute the confidence interval, we assumed that the observations of the
number of customers processed each day were independent and
normally
 Lab 9 Simulation Output Analysis 527

distributed. The observations are independent because ProModel used a different

stream of random numbers to simulate each replication. We do not know that the
observations are normally distributed, however. Therefore, we should specify
that the confidence level of the interval is approximately 0.90. Nevertheless,
we fol- lowed an acceptable procedure to get our estimate for the service rate,
and we can stand by our approximate confidence interval. To illustrate a point,
however, let’s take a moment to use the Stat::Fit software provided with
ProModel to test if the simulation output is normally distributed. To do so, we
need a lot more than eight observations. Let’s pick 100 just because it is a round
number and we can quickly generate them by configuring ProModel to run 100
replications of the simulation. Try this now. Notice that you get a very small
confidence interval with this many observations.
It would take a while to enter the 100 observations into Stat::Fit one at a
time. A faster method is to save the ProModel output report with the results
from the 100 replications into a Microsoft Excel file format that can then be
copied into the Stat::Fit data table. To do this from the ProModel output report
viewer, select File from the main menu and click on the Save As option, then
enter a name for the file, and save the file as type MS Excel (Figure L9.7). Open
the Excel file that you just

FIGURE L9.7
Saving a ProModel
output report into
a Microsoft Excel
file format.
528 Part II Labs

FIGURE L9.8
The ProModel output report displayed within a Microsoft Excel spreadsheet.

saved the ProModel output to, click on the VARIABLES sheet tab at the bottom
of the spreadsheet (Figure L9.8), highlight the 100 Current Value observations of
the Processed variable—making sure not to include the average, standard
deviation, 90% C.I. Low, and 90% C.I. High values (the last four values in the
column)—and paste the 100 observations into the Stat::Fit data table (Figure
L9.9).
After the 100 observations are pasted into the Stat::Fit Data Table,
display a histogram of the data. Based on the histogram, the observations
appear somewhat normally distributed (Figure L9.9). Furthermore, Stat::Fit
estimates that the nor- mal distribution with mean µ = 59.30 and standard
deviation σ = 4.08 provides an acceptable fit to the data. Therefore, we
probably could have dropped the word “approximate” when we presented
our confidence interval to Mr. Taylor. Be sure to verify all of this for yourself
using the software.
Note that if you were to repeat this procedure in practice because the
problem requires you to be as precise and as sure as possible in your
conclusions, then you would report your confidence interval based on the larger
number of observations. Never discard precious data.
Before leaving this section, look back at Figure L9.6. The Total Failed col-
umn in the Failed Arrivals section of the output report indicates the number of
customers that arrived to eat at Spuds-n-More but left because the waiting
line
 Lab 9 Simulation Output Analysis 529

FIGURE L9.9
Stat::Fit analysis of the 100 observations of the number of customers processed per
day by Spuds-n-More.

was full. Mr. Taylor thinks that his proposed expansion plan will allow him to
cap- ture some of the customers he is currently losing. In Lab Chapter 10, we
will add embellishments to the as-is simulation model to reflect Mr. Taylor’s
expansion plan to see if he is right.

L9.3 Nonterminating Simulation

We run a nonterminating simulation of a system if we are interested in under-
standing the steady-state behavior of the system—that is, its long term average
behavior. Because a nonterminating system does not return to a fixed initial con-
dition and theoretically never shuts down, it is not easy to select either the
starting condition for the simulation or the amount of time to run the simulation.
When a simulation has just begun running, its state (number of customers in
the system for example) will be greatly affected by the initial state of the simula-
tion and the elapsed time of the run. In this case, the simulation is said to be in a
transient condition. However, after sufficient time has elapsed, the state of the
sim- ulation becomes essentially independent of the initial state and the elapsed
time. When this happens, the simulation has reached a steady-state condition.
Although
530 Part II Labs

the simulation’s output will continue to be random, the statistical distribution of

the simulation’s output does not change after the simulation reaches steady state.
The period during which the simulation is in the transient phase is known as
the warm-up period. This is the amount of time to let the simulation run before
gather- ing statistics. Data collection for statistics begins at the end of the warm-
up and con- tinues until the simulation has run long enough to allow all
simulation events (even rare ones) to occur many times (hundred to thousands of
times if practical).

Problem Statement
A simulation model of the Green Machine Manufacturing Company
(GMMC) owned and operated by Mr. Robert Vaughn is shown in Figure L9.10.
The interar- rival time of jobs to the GMMC is constant at 1.175 minutes. Jobs
require pro- cessing by each of the four machines. The processing time for a job
at each green machine is given in Table L9.2.

FIGURE L9.10
The layout of the Green Machine Manufacturing Company simulation model.

TABLE L9.2 Process Times at Green Machine Manufacturing Company

Activity Process Time (minutes) ProModel Format

Machine 1 Exponential with mean = 1.0 Wait E(1.0) min

Machine 2 Weibull with minimum = 0.10, α = 5, β = 1 Wait (0.10 + W(5,1)) min
Machine 3 Weibull with minimum = 0.25, α = 5, β = 1 Wait (0.25 + W(5,1)) min
Machine 4 Weibull with minimum = 0.25, α = 5, β = 1 Wait (0.25 + W(5,1)) min
Lab 9 Simulation Output Analysis 531

A plentiful amount of storage is provided for waiting jobs in front of each of

the green machines. Our task is to conduct a nonterminating simulation to esti-
mate the time-average amount of work-in-process (WIP) inventory (the steady-
state expected number of jobs in the system). A printout of the model is given
in Figure L9.11. The model is included on the CD accompanying the book under
the file name Lab 9_3 GreenMachine.MOD.

L9.3.1 Warm-up Time and Run Length

In this section we estimate the amount of time needed for the GMMC model to
warm up, and the amount of time to run the model past its warm-up period. We
first declare a model variable called WIP to keep track of the work-in-process
in- ventory in the simulated manufacturing system. Notice we are collecting
statistics only for the WIP variable and the entity. You should configure your
model the same and run the simulation 250 hours to produce a time-series plot
of the WIP in- ventory levels (Figure L9.12(a)).
The simplest method for selecting the end of the warm-up phase is visual
de- termination. In this method, we plot the simulation model’s output over
time, as illustrated in Figure L9.12(a), and then visually determine the point at
which the initial transient phase is over. In this example, it seems that the
transient phase cre- ated by the initial condition of zero WIP inventory is over
at around 20 hours. Usually you will want to select a value beyond this to
guard against underesti- mating the end of the warm-up phase. So we will pick
100 hours as the end of the warm-up. Actually, you should not make this
decision based on the output from one replication of the simulation. We are
doing this here to quickly illustrate the need for allowing the model to warm up.
We will use the preferred method to es- timate the end of the warm-up phase in
a moment.
In most nonterminating simulation models, the quality of the results
substan- tially improves if we throw away the output generated during the
warm-up phase of the simulation. In Figure L9.12(a), the observations during
the transient phase of the first 100 hours of the simulation are alleged to be
artificially low. As such, we do not want them to bias our estimate of the
time-average WIP inventory. Therefore, in our next run of the GMMC
simulation, we specify a warm-up time of 100 hours (Figure L9.13). Notice
how the simulation output during the 100-hour warm-up has been discarded in
Figure L9.12(b). The discarded output will no longer affect the observations
reported in the simulation output.
The simplified process we just used to identify the end of the warm-up
phase should be avoided. The process can be substantially improved by running
multi- ple replications of the simulation and then combining the time-series
output from each replication into an average time-series plot. Averaging the
time-series data from multiple replications together will help filter out the large
fluctuations (high values from one replication are offset by small values from
another replication) and will give you a better estimate of the true but unknown
time-series output. In many cases, you may need to add an additional layer of
filtering to smooth the “averaged” time-series plot. This can be done by
computing a Welch moving average of the time-series data. Section 9.6.1 of
Chapter 9 provides additional
532 Part II Labs

FIGURE L9.11
The simulation model of the Green Machine Manufacturing Company.
 Lab 9 Simulation Output Analysis 533

FIGURE L9.12
Work-in-process (WIP) inventory value history for one replication of the GMMC simulation. (a) WIP value history
without warm-up phase removed. Statistics will be biased low by the transient WIP values. (b) WIP value history
with 100-hour warm-up phase removed. Statistics will not be biased low.

(a) (b)

FIGURE L9.13
ProModel’s Simulation
Options window set
for a single replication
with a 100-hour
warm- up period
followed by a 150-
hour run length.

details on this subject, and exercise 4 in Lab Chapter 11 illustrates how to use
the Welch method implemented in SimRunner.
Figure L9.14 was produced by SimRunner by recording the time-average
WIP levels of the GMMC simulation over successive one-hour time periods.
The results from each period were averaged across five replications to
produce the “raw data” plot, which is the more erratic line that appears red on
the computer screen. A 54-period moving average (the smooth line that
appears green on the
534 Part II Labs

FIGURE L9.14
SimRunner screen for estimating the end of the warm-up time.

computer) indicates that the end of the warm-up phase occurs between the 33rd
and 100th periods. Given that we need to avoid underestimating the warm-up,
let’s declare 100 hours as the end of the warm-up time. We feel much more
comfortable basing our estimate of the warm-up time on five replications.
Notice that SimRunner indicates that at least 10 replications are needed to
estimate the aver- age WIP to within a 7 percent error and a confidence level of
90 percent using a warm-up of 100 periods (hours). You will see how this was
done with SimRunner in Exercise 4 of Section L11.4 in Lab Chapter 11.
Why did we choose an initial run length of 250 hours to produce the time-
series plot in Figure L9.14? Well, you have to start with something, and we
picked 250 hours. You can rerun the experiment with a longer run length if
the time- series plot, produced by averaging the output from several
replications of the simulation, does not indicate a steady-state condition. Long
runs will help prevent
 Lab 9 Simulation Output Analysis 535

you from wondering what the time-series plot looks like beyond the point at
which you stopped it. Do you wonder what our plot does beyond 250 hours?
Let’s now direct our attention to answering the question of how long to
run the model past its warm-up time to estimate our steady-state statistic,
mean WIP inventory. We will somewhat arbitrarily pick 100 hours not
because that is equal to the warm-up time but because it will allow ample
time for the simulation events to happen thousands of times. In fact, the 100-
hour duration will allow approxi- mately 5,100 jobs to be processed per
replication, which should give us decently accurate results. How did we
derive the estimate of 5,100 jobs processed per repli- cation? With a 1.175-
minute interarrival time of jobs to the system, 51 jobs arrive per hour (60
minutes/1.175 minutes) to the system. Running the simulation for 100 hours
should result in about 5,100 jobs (100 hours × 51 jobs) exiting the sys- tem.
You will want to check the number of Total Exits in the Entity Activity sec-
tion of the ProModel output report that you just produced to verify this.

L9.3.2 Replications or Batch Intervals

We have a choice between running replications or batch intervals to estimate the
time-average WIP inventory. Replications are our favorite choice because we get
independent observations, guaranteed. Figure L9.15 illustrates how this is done
in ProModel as well as the specification of the 100 hours of run time beyond
the warm-up. Running the simulation for 10 replications produces the
results in Figure L9.16. We are approximately 90 percent confident that the
true but un- known mean WIP inventory is between 17.64 and 21.09 jobs.

FIGURE L9.15
Specification of
warm-up hours and
run hours in the
Simulation Options
menu for running
replications.
 536 Part II Labs

FIGURE L9.16
Ten replications of the Green Machine Manufacturing Company simulation using a 100-hour warm-up
and a 100-hour run length.
------------------------------------------------------------------------------------
General Report
Output from C:\Bowden Files\Word\McGraw 2nd Edition\GreenMachine.MOD
Date: Jul/16/2002 Time: 01:04:42 AM
------------------------------------------------------------------------------------
Scenario : Normal Run
Replication : All
Period : Final Report (100 hr to 200 hr Elapsed: 100 hr)
Warmup Time : 100
Simulation Time : 200 hr
------------------------------------------------------------------------------------
VARIABLES
Average
Variable Total Minutes Minimum Maximum Current Average
Name Changes Per Change Value Value Value Value
-------- ------- ---------- ------- ------- ------- -------
WIP 10202 0.588 13 31 27 24.369 (Rep 1)
WIP 10198 0.588 9 32 29 18.928 (Rep 2)
WIP 10207 0.587 14 33 22 24.765 (Rep 3)
WIP 10214 0.587 10 26 22 18.551 (Rep 4)
WIP 10208 0.587 8 27 25 16.929 (Rep 5)
WIP 10216 0.587 13 27 17 19.470 (Rep 6)
WIP 10205 0.587 8 30 24 19.072 (Rep 7)
WIP 10215 0.587 8 25 14 15.636 (Rep 8)
WIP 10209 0.587 9 26 20 17.412 (Rep 9)
WIP 10209 0.587 11 27 24 18.504 (Rep 10)
WIP 10208.3 0.587 10.3 28.4 22.4 19.364 (Average)
WIP 5.735 0.0 2.311 2.836 4.501 2.973 (Std. Dev.)
WIP 10205 0.587 8.959 26.756 19.790 17.640 (90% C.I. Low)
WIP 10211.6 0.587 11.64 30.044 25.009 21.087 (90% C.I. High)

If we decide to make one single long run and divide it into batch intervals
to estimate the expected WIP inventory, we would select the Batch Mean option
in the Output Reporting section of the Simulation Options menu (Figure L9.17).
A guideline in Chapter 9 for making an initial assignment to the length of time
for each batch interval was to set the batch interval length to the simulation run
time you would use for replications, in this case 100 hours. Based on the guide-
line, the Simulation Options menu would be configured as shown in Figure
L9.17 and would produce the output in Figure L9.18. To get the output report to
display the results of all 10 batch intervals, you specify “<All>” Periods in the
General Report Type settings window (Figure L9.19). We are approximately
90 percent confident that the true but unknown mean WIP inventory is between
18.88 and 23.19 jobs. If we desire a smaller confidence interval, we can increase
the sample size by extending the run length of the simulation in increments of
the batch interval length. For example, we would specify run hours of 1500 to
collect 15 observations of average WIP inventory. Try this and see if the confi-
dence interval becomes smaller. Note that increasing the batch interval length is
also helpful.
 Lab 9 Simulation Output Analysis 537

FIGURE L9.17
Warm-up hours, run
hours, and batch
interval length in the
Simulation Options
menu for running
batch intervals. Note
that the time units are
specified on the batch
interval length.

FIGURE L9.18
Ten batch intervals of the Green Machine Manufacturing Company simulation using a 100-hour warm-up
and a 100-hour batch interval length.
------------------------------------------------------------------------------------
General Report
Output from C:\Bowden Files\Word\McGraw 2nd Edition\GreenMachine.MOD
Date: Jul/16/2002 Time: 01:24:24 AM
------------------------------------------------------------------------------------
Scenario : Normal Run
Replication : 1 of 1
Period : All
Warmup Time : 100 hr
Simulation Time : 1100 hr
------------------------------------------------------------------------------------
VARIABLES
Average
Variable Total Minutes Minimum Maximum Current Average
Name Changes Per Change Value Value Value Value
-------- ------- ---------- ------- ------- ------- -------
WIP 10202 0.588 13 31 27 24.369 (Batch 1)
WIP 10215 0.587 16 29 26 23.082 (Batch 2)
WIP 10216 0.587 9 30 22 17.595 (Batch 3)
WIP 10218 0.587 13 30 16 22.553 (Batch 4)
WIP 10202 0.588 13 33 28 23.881 (Batch 5)
WIP 10215 0.587 17 37 25 27.335 (Batch 6)
WIP 10221 0.587 8 29 18 20.138 (Batch 7)
WIP 10208 0.587 10 26 22 17.786 (Batch 8)
WIP 10214 0.587 9 29 20 16.824 (Batch 9)
WIP 10222 0.586 9 23 12 16.810 (Batch 10)
WIP 10213.3 0.587 11.7 29.7 21.6 21.037 (Average)
WIP 7.103 0.0 3.164 3.743 5.168 3.714 (Std. Dev.)
WIP 10209.2 0.587 9.865 27.530 18.604 18.884 (90% C.I. Low)
WIP 10217.4 0.587 13.534 31.869 24.595 23.190 (90% C.I. High)
538 Part II Labs

FIGURE L9.19
ProModel General
Report Options set
to display the results
from all batch
intervals.

L9.3.3 Required Batch Interval Length

The worrisome part of the batch interval method is whether the batch interval is
long enough to acquire “approximately” independent observations. The word
“approximately” is emphasized because we know that the observations within a
simulation run are often autocorrelated (not independent). In fact, they are often
positively correlated, which would bias the sample standard deviation of the
batch means to the low side. And this would bias our estimate of the confidence
inter- val’s half-width to the low side. We do not know if this is the case with
our WIP inventory observations. However, if it was the case and we were not
aware of it, we would think that our estimate of the mean WIP inventory was
better than it re- ally is. Therefore, we should do ourselves a favor and use
Stat::Fit to check the lag-1 autocorrelation of the observations before we
interpret the results. To get a decent estimate of the lag-1 autocorrelation,
however, we need more than 10 ob- servations. Section 9.6.2 of Chapter 9
stated that at least 100 observations are necessary to get a reliable estimate of
the lag-1 autocorrelation. So let’s increase the simulation run length to 10,000
hours and produce an output report with 100 observations of the time-average
WIP inventory.
It would take a while to enter the 100 observations into Stat::Fit one at a
time. Therefore, save the ProModel output report with the results from the 100
batch in- tervals into a Microsoft Excel file format that can then be copied into
the Stat::Fit data table. The procedure is the same as used in Section L9.2.4 to
enter the obser- vations under the Current Value column from the
VARIABLES sheet tab of the Excel spreadsheet into Stat::Fit—except that
you are now entering the
 Lab 9 Simulation Output Analysis 539

FIGURE L9.20
Stat::Fit Autocorrelation plot of the observations collected over 100 batch intervals. Lag-1
autocorrelation is within the –0.20 to +0.20 range.

observations under the Average Value column from the VARIABLES sheet tab of
the Excel spreadsheet into Stat::Fit.
Figure L9.20 illustrates the Stat::Fit results that you will want to verify. The
lag-1 autocorrelation value is the first value plotted in Stat::Fit’s Autocorrelation
of Input Data plot. Note that the plot begins at lag-1 and continues to lag-20. For
this range of lag values, the highest autocorrelation is 0.192 and the lowest value
is −0.132 (see correlation(0.192, −0.132) at the bottom of the plot). Therefore,
we know that the lag-1 autocorrelation is within the −0.20 to +0.20 range rec-
ommended in Section 9.6.2 of Chapter 9, which is required before proceeding to
the final step of “rebatching” the data into between 10 and 30 larger batches. We
have enough data to form 10 batches with a length of 1000 hours (10 batches
at 1000 hours each equals 10,000 hours of simulation time, which we just did).
The results of “rebatching” the data in the Microsoft Excel spreadsheet are
shown in Table L9.3. Note that the first batch mean of 21.037 in Table L9.3 is
the average of the first 10 batch means that we originally collected. The second
batch mean of 19.401 is the average of the next 10 batch means and so on.
The confidence
540 Part II Labs

TABLE L9.3 Final Results of the 100 Batch Intervals

Combined into 10 Batch Intervals

WIP Average Value

21.037 (Batch 1)
19.401 (Batch 2)
21.119 (Batch 3)
20.288 (Batch 4)
20.330 (Batch 5)
20.410 (Batch 6)
22.379 (Batch 7)
22.024 (Batch 8)
19.930 (Batch 9)
22.233 (Batch 10)
20.915 (Average)
1.023 (Std. Dev.)
20.322 (90% C.I. Low)
21.508 (90% C.I. High)

interval is very narrow due to the long simulation time (1000 hours) of each
batch. The owner of GMMC, Mr. Robert Vaughn, should be very pleased with
the preci- sion of the time-average WIP inventory estimate.
The batch interval method requires a lot of work to get it right. Therefore, if
the time to simulate through the warm-up period is relatively short, the replica-
tions method should be used. Reserve the batch interval method for simulations
that require a very long time to reach steady state.

L9.4 Exercises
1. An average of 100 customers per hour arrive to the Picayune Mutual
Bank. It takes a teller an average of two minutes to serve a customer.
Interarrival and service times are exponentially distributed. The bank
currently has four tellers working. Bank manager Rich Gold wants to
compare the following two systems with regard to the average time
customers spend in the bank.
System #1
A separate queue is provided for each teller. Assume that customers
choose the shortest queue when entering the bank, and that customers
cannot jockey between queues (jump to another queue).
System #2
A single queue is provided for customers to wait for the first available
teller.
 Lab 9 Simulation Output Analysis 541

Assume that there is no move time within the queues. Run 15

replications of an eight-hour simulation to complete the following:
a. For each system, record the 90 percent confidence interval using a
0.10 level of significance for the average time customers spend in the
bank.
b. Estimate the number of replications needed to reduce the half-width
of each confidence interval by 25 percent. Run the additional
replications for each system and compute new confidence intervals
using a 0.10 level of significance.
c. Based on the results from part b, would you recommend one
system over the other? Explain.
2. Rerun the simulation of the Green Machine Manufacturing Company of Section L9.3 to produce 100
batch means with a 50-hour interval length. Use a 100-hour warm-up. Check the lag-1 autocorrelation
of the 100 time-average WIP observations to see if it falls between −0.20 and
+0.20. If it does not, increase the batch interval length by 50 percent
and continue the process until an acceptable lag-1 autocorrelation is
achieved. Once the lag-1 autocorrelation is acceptable, check to see if
the 100 observations are normally distributed. After that, rebatch the
100 observations into 20 batch means and compute a 95 percent
confidence interval. Are you comfortable with the resulting
confidence interval? Explain.
3. Use the simulation model created for the DumpOnMe facility presented in Exercise 11 of Lab Section
L7.12 to complete the following:
a. For a simulation run length of 60 minutes, record the 90 percent
confidence interval for the scale’s average utilization based on
30 replications.
b. For a 60-minute warm-up and a 60-minute simulation run length
beyond the warm-up time, record the 90 percent confidence interval
for the scale’s average utilization based on 30 replications.
c. Based only on the two confidence intervals, do you think that a
warm-up period is necessary for the DumpOnMe model? Explain.
4. See Lab Chapter 11 for exercises involving the use of SimRunner’s implementation of the Welch
moving average technique.
Harrell−Ghosh−Bo II. 10. Comparing © The
wden: Simulation Labs Alternative McGraw−Hill
Using ProModel, Systems Companies,
Second Edition

L A B

10 COMPARING
ALTERNATIVE SYSTEMS

The great tragedy of Science—the slaying of a beautiful hypothesis by an

ugly fact.
—Thomas H. Huxley

In this lab we see how ProModel is used with some of the statistical methods
presented in Chapter 10 to compare alternative designs of a system with the goal
of identifying the superior system relative to some performance measure. We
will also learn how to program ProModel to use common random numbers
(CRN) to drive the simulation models that represent alternative designs for the
systems being compared. The use of CRN allows us to run the opposing simula-
tions under identical experimental conditions to facilitate an objective evaluation
of the systems.

L10.1 Overview of Statistical Methods

Often we want to compare alternative designs of a system. For example, we may
wish to compare two different material handling systems, production scheduling
rules, plant layouts, or staffing schedules to determine which yields better
results. We compare the two alternative system designs based on a certain
measure of performance—for example, production rate, number of customers
served, time in system, or waiting time for service. The comparison is based on
the estimates of the expected value of the performance measure that we derive
from simulating the alternative system designs. If the estimates provide
evidence that the performances of the two alternative simulation models are not
equal, we can justify picking the alternative that produced the better estimate as
the best alternative.
Chapter 10 covers the paired-t confidence interval method and the Welch
confidence interval method for testing hypotheses about two alternatives. The

543
544 Part II Labs

Bonferroni approach is used for comparing from three to about five alternatives.
Either the Welch method or paired-t method is used with the Bonferroni
approach to make the comparisons. The Bonferroni approach does not
identify the best alternative but rather identifies which pairs of alternatives
perform differently. This information is helpful for identifying the better
alternatives, if in fact there is a significant difference in the performance of the
competing alternatives.
Chapter 10 recommends that the technique of analysis of variance
(ANOVA) be used when more than about five alternative system designs are
being com- pared. The first step in ANOVA is to evaluate the hypothesis that
the mean per- formances of the systems are equal against the alternative
hypothesis that at least one pair of the means is different. To figure out which
means differ from which other ones, a multiple comparison test is used. There
are several multiple com- parison tests available, and Chapter 10 presents
the Fisher’s protected least significant difference (LSD) test.
The decision to use paired-t confidence intervals, Welch confidence
intervals, the Bonferroni approach, or ANOVA with protected LSD depends on
the statisti- cal requirements placed on the data (observations from the
simulations) by the procedure. In fact, simulation observations produced
using common random numbers (CRN) cannot be used with the Welch
confidence interval method or the technique of ANOVA. Please see Chapter 10
for details.
In this lab we will use the paired-t confidence interval method because it
places the fewest statistical requirements on the observations collected from the
simulation model. Therefore, we are less likely to get into trouble with faulty as-
sumptions about our data (observations) when making decision based on paired-
t confidence intervals. Furthermore, one of the main purposes of this lab is
to demonstrate how the CRN technique is implemented using ProModel. Out of
the comparison procedures of Chapter 10, only the ones based on paired-t
confidence intervals can be used in conjunction with the CRN technique.

L10.2 Three Alternative Systems

Problem Statement
The analysis of the Spuds-n-More by the Seashore restaurant started in Sec-
tion L9.2 of Lab Chapter 9 will be completed in this lab. The details of the
system and objective for the study are reviewed here. Spuds-n-More, a takeout
fast-food restaurant, is a favorite among vacationers at a seaside resort.
Customers walking along the boardwalk access the restaurant via a single
ordering window, where they place their orders, pay, and receive their food.
There is no seating in the restaurant. The interarrival time of customers to
Spuds-n-More is exponentially distributed with a mean of six minutes. The
activity times are given in Table L9.1. The waiting area in front of the walkup
window can accommodate only five cus- tomers. If the waiting area is filled
to capacity when a customer arrives, the customer bypasses Spuds-n-More.
Mr. Taylor closes the entry to the waiting area in front of his restaurant after
eight hours of operation. However, any customers
 Lab 10 Comparing Alternative Systems 545

already in the waiting area by closing time are served before the kitchen shuts
down for the day.
Mr. Taylor is thinking about expanding into the small newspaper stand next
to Spuds-n-More, which has been abandoned. This would allow him to add a
second window to serve his customers. The first window would be used for
taking orders and collecting payments, and the second window would be used
for filling orders. Before investing in the new space, however, Mr. Taylor needs
to convince the major stockholder of Spuds-n-More, Pritchard Enterprises, that
the investment would allow the restaurant to serve more customers per day.
A baseline (as-is) model of the current restaurant configuration was devel-
oped and validated in Section L9.2 of Lab Chapter 9. See Figures L9.1 and L9.2
for the layout of the baseline model and the printout of the ProModel model. Our
task is to build a model of the proposed restaurant with a second window to de-
termine if the proposed design would serve more customers per day than does
the current restaurant. Let’s call the baseline model Spuds-n-More1 and the
proposed model Spuds-n-More2. The model is included on the CD
accompanying the book under file name Lab 10_2 Spuds-n-More2.MOD.
The ProModel simulation layout of Spuds-n-More2 is shown in Fig-
ure L10.1, and the ProModel printout is given in Figure L10.2. After customers
wait in the order queue (location Order_Q) for their turn to order, they move to
the first window to place their orders and pay the order clerk (location
Order_Clerk). Next customers proceed to the pickup queue (location Pickup_Q)
to wait for their turn to be served by the pickup clerk (Pickup_Clerk) at the
second window. There

FIGURE L10.1
Layout of Spuds-n-
More2 simulation
model.
546 Part II Labs

FIGURE L10.2
The Spuds-n-More2 simulation model.

is enough space for one customer in the pickup queue. The pickup clerk processes
one order at a time.
As the Spuds-n-More2 model was being built, Mr. Taylor determined that
for additional expense he could have a carpenter space the two customer service
win- dows far enough apart to accommodate up to three customers in the order
pickup queue. Therefore, he requested that a third alternative design with an
order pickup queue capacity of three be simulated. To do this, we only need
to change the
 Lab 10 Comparing Alternative Systems 547

capacity of the pickup queue from one to three in our Spuds-n-More2 model. We
shall call this model Spuds-n-More3. Note that for our Spuds-n-More2 and
Spuds-n-More3 models, we assigned a length of 25 feet to the Order_Q, a length
of 12 feet to the Pickup_Q, and a Customer entity travel speed of 150 feet
per minute. These values affect the entity’s travel time in the queues (time for a
cus- tomer to walk to the end of the queues) and are required to match the
results pre- sented in this lab.

L10.3 Common Random Numbers

Let’s conduct the analysis for Mr. Taylor using Common Random Numbers
(CRN). The CRN technique provides a way of comparing alternative system
designs under more equal experimental conditions. This is helpful in ensuring
that the observed differences in the performance of system designs are due to the
differences in the designs and not to differences in experimental conditions. The
goal is to evaluate each system under the exact same set of circumstances to
ensure that a fair comparison is made. Therefore, the simulation of each alterna-
tive system design is driven by the same stream of random numbers to ensure
that the differences in key performance measures are due only to differences
in the alternative designs and not because some designs were simulated with a
stream of random numbers that produced more extreme conditions. Thus we
need to use the exact same random number from the random number stream
for the exact same purpose in each simulated system. A common practice that
helps to keep random numbers synchronized across systems is to assign a
different random number stream to each stochastic element in the model. For
this reason, ProModel provides 100 unique streams (Stream 1 to Stream
100) of random numbers for generating random variates from the statistical
distributions avail- able in the software.
The Spuds-n-More models use observations (random variates) from an
expo- nential distribution for the customer interarrival time, order time, order
payment time, and order pickup time. For CRN, in this example we can use
Stream 1 to generate interarrival times, Stream 2 to generate order times,
Stream 3 to generate payment times, and Stream 4 to generate pickup times.
The ProModel function for generating random variates from the exponential
distribution is E(a, stream), where the parameter a is the mean of the random
variable and the parameter stream is the ProModel stream number between 1
and 100. All ProModel distribution functions include the stream parameter as
the last parameter of the function. The stream parameter is optional (you do
not have to specify a value). If you do not provide a value for the stream
parameter, ProModel uses stream = 1 to generate observations (random
variates) from the specified distribution. Figure L10.3 illustrates the desired
assignment of random number streams in the processing and arrivals section
of a Spuds-n-More model. Configure all three of your Spuds-n-More models
accordingly.
548 Part II Labs

FIGURE L10.3
Unique random number streams assigned to the Spuds-n-More model.

L10.4 Bonferroni Approach with Paired-t Confidence Intervals

Our objective is to compare the performance of the three alternative Spuds-n-
More restaurant designs with respect to the number of customers processed per
day. Let
µi represent the true number of customers processed per day by restaurant design
i, where i = 1 denotes Spuds-n-More1, i = 2 denotes Spuds-n-More2, and i =
3 denotes Spuds-n-More3. Specifically, we wish to evaluate the hypotheses
H0: µ1 = µ2 = µ3
H1: µ1 /= µ2 or µ1 /= µ3 or µ2 /= µ3
at the α = 0.06 significance level. To evaluate these hypotheses, we estimate
the number of customers processed by each restaurant design by simulating
each de- sign for 25 days (25 replications). The simulations are to be driven
by Common Random Numbers (CRN). Therefore, select the CRN option in
the bottom right corner of the Simulation Options window before running
the simulations (Fig- ure L10.4). This option helps to synchronize the use of
random numbers across the three simulated systems. When the option is
selected, ProModel starts each replication at predetermined locations on the
random number streams. At the end of a replication, ProModel advances to
the next set of predetermined locations on the streams before starting the
next replication. Even if one model uses more ran- dom numbers than
another during a replication, both models will begin the next replication
from the same positions on the random number streams. The numbers of
customers processed by each restaurant design for 25 replications using the
CRN option are shown in Table L10.1.
 Lab 10 Comparing Alternative Systems 549

FIGURE L10.4
ProModel’s Simulation
Options set to run
25 replications using
Common Random
Numbers.

TABLE L10.1 Comparison of the Three Restaurant Designs Based on Paired Differences

(A) (B) (C) (D) (E) (F) (G)

Spuds-n- Spuds-n- Spuds-n-
More1 More2 More3 Differenc Differenc Differenc
Rep. Customers Customers Customers e (B − C) e (B − e (C −
(j) x1 j
Processed x2 j
Processed x3 j
Processed x(1−2) j x(1−3)
D) j x(2−3)
D) j

1 60 72 75 −12 −15 −3
2 57 79 81 −22 −24 −2
3 58 84 88 −26 −30 −4
4 53 69 72 −16 −19 −3
5 54 67 69 −13 −15 −2
6 56 72 74 −16 −18 −2
7 57 70 71 −13 −14 −1
8 55 65 65 −10 −10 0
9 61 84 84 −23 −23 0
10 60 76 76 −16 −16 0
11 56 66 70 −10 −14 −4
12 66 87 90 −21 −24 −3
13 64 77 79 −13 −15 −2
14 58 66 66 −8 −8 0
15 65 85 89 −20 −24 −4
16 56 78 83 −22 −27 −5
17 60 72 72 −12 −12 0
18 55 75 77 −20 −22 −2
19 57 78 78 −21 −21 0
20 50 69 70 −19 −20 −1
21 59 74 77 −15 −18 −3
22 58 73 76 −15 −18 −3
23 58 71 76 −13 −18 −5
24 56 70 72 −14 −16 −2
25 53 68 69 −15 −16 −1

Sample mean x¯(i −i l ), for all i and i l between 1 and 3, with i < i l −16.20 −18.28 −2.08
Sample standard dev s(i −i l ), for all i and i l between 1 and 3, with i < i l 4.66 5.23 1.61
550 Part II Labs

The Bonferroni approach with paired-t confidence intervals is used to evalu-

ate our hypotheses for the three alternative designs for the restaurant. The
evalua- tion of the three restaurant designs requires that three pairwise
comparisons be made:
Spuds-n-More1 vs. Spuds-n-
More2 Spuds-n-More1 vs. Spuds-
n-More3 Spuds-n-More2 vs.
Spuds-n-More3
Following the procedure described in Section 10.4.1 of Chapter 10 for
the Bonferroni approach, we begin constructing the required three paired-t
confi- dence intervals by letting α1 = α2 = α3 = α/3 = 0.06/3 = 0.02.
The computation of the three paired-t confidence intervals follows:

Spuds-n-More1 vs. Spuds-n-More2 (µ(1−2))

α1 = 0.02
tn−1,α1 /2 = t24,0.01 = 2.485 from Appendix B

hw = (t24,0.01 )s(1−2) (2.485)4.66

√ = √ = 2.32 customers
n 25
The approximate 98 percent confidence interval is
x¯ (1−2) − hw ≤ µ(1−2) ≤ x¯ (1−2) + hw
−16.20 − 2.32 ≤ µ(1−2) ≤ −16.20 + 2.32
−18.52 ≤ µ(1−2) ≤ −13.88

Spuds-n-More1 vs. Spuds-n-More3 (µ(1−3))

α2 = 0.02
tn−1,α2 /2 = t24,0.01 = 2.485 from Appendix B

hw = (t24,0.01 )s(1−3) (2.485)5.23

√ = √ = 2.60 customers
n 25
The approximate 98 percent confidence interval is
x¯ (1−3) − hw ≤ µ(1−3) ≤ x¯ (1−3) + hw
−18.28 − 2.60 ≤ µ(1−3) ≤ –18.28 + 2.60
−20.88 ≤ µ(1−3) ≤ –15.68

Spuds-n-More2 vs. Spuds-n-More3 (µ(2−3))

The approximate 98 percent confidence interval is
−2.88 ≤ µ(2−3) ≤ −1.28
Given that the confidence interval for µ(1−2) excludes zero, we conclude that
there is a significant difference in the mean number of customers processed by the
 Lab 10 Comparing Alternative Systems 551

current “as-is” restaurant Spuds-n-More1 and the proposed Spuds-n-More2

design. The confidence interval further suggests that Spuds-n-More2 processes
an estimated 13.88 to 18.52 more customers per day on average than does
Spuds-n- More1. Likewise, there is a significant difference in the mean number
of customers processed by Spuds-n-More1 and Spuds-n-More3. The proposed
Spuds-n-More3 processes an estimated 15.68 to 20.88 more customers per day
on average than does Spuds-n-More1. The third confidence interval suggests
that the difference between Spuds-n-More2 and Spuds-n-More3, although
statistically significant, is fairly small with Spuds-n-More3 processing an
estimated 1.28 to
2.88 more customers per day on average than does Spuds-n-More2.
With α = 0.06 the overall confidence for our conclusions is
approximately 94 percent. Based on these results we are justified in
concluding that both of the new designs (Spuds-n-More2 and Spuds-n-More3)
serve more customers per day than does the current “as-is” restaurant. It
appears that Spuds-n-More3 is not that much better than Spuds-n-More2
from a customer service rate perspective. Perhaps we will advise Mr. Taylor
to request funding from the restaurant’s stock- holders to implement the
Spuds-n-More2 design because the confidence interval suggests that it
processes an estimated 14 to 19 more customers per day than does the
current restaurant. The extra expense of Spuds-n-More3 above the
implemen- tation cost of Spuds-n-More2 for spacing the order and pickup
windows farther apart will probably not be offset by the extra income from
processing only an estimated 1 to 3 more customers per day.
In the first exercise problem in the next section, we will find out how much
of a reduction, if any, we achieved in the half-widths of the confidence intervals
by using the CRN technique. Theoretically, the CRN technique produces a
positive correlation between the observations in columns B, C, and D of
Table L10.1. The positive correlation reduces the value of the sample standard
deviation of the observations in the difference columns (columns E, F, and G of
Table L10.1). The smaller standard deviation results in a smaller confidence
interval half-width (a more precise statement). This is important because, for
example, if the third con- fidence interval was −10.93 ≤ µ(2−3) ≤ −1.79,
which suggests that Spuds-n- More3 processes an estimated 1.79 to 10.93
more customers per day on average than does Spuds-n-More2, then we may not
be so quick to rule out Spuds-n-More3 as a serious competitor to Spuds-n-
More2 due to the greater range of the confi- dence interval.

L10.5 Exercises
1. Without using the Common Random Numbers (CRN) technique,
compare the Spuds-n-More1, Spuds-n-More2, and Spuds-n-More3
models with respect to the average number of customers served per day.
To avoid the use of CRN, assign ProModel Stream 1 to each stochastic
element in the model and do not select the CRN option from the
 552 Part II Labs

Simulation Options menu. Simulate each of the three restaurants for 25

replications.
a. Use the Bonferroni approach with an overall significance level of
0.06, and construct the confidence intervals using the paired-t method.
How do the half-widths of the confidence intervals compare to the
ones computed in Section L10.4? Are the differences in half-widths
what you expected? Explain.
b. Use the Analysis of Variance (ANOVA) technique with the Fisher’s
protected Least Significant Difference (LSD) test to compare the three
systems. Use a 0.05 significance level. Explain any differences
between your conclusions here and those made in Section L10.4
about the three systems.
2. Increase the capacity of the Pickup_Q location in the Spuds-n-More3 model from three to six. Call
this model Spuds-n-More4. Using the Common Random Numbers (CRN) technique with
ProModel Streams
1, 2, 3, and 4 assigned as in Figure L10.3, see if Spuds-n-More4 processes
more customers per day on average than does Spuds-n-More3. Use a
paired-t confidence interval with a 0.02 significance level. Run each
simulation model for 25 replications.
3. For the Picayune Mutual Bank (Exercise 1 of Section L9.4), run
15 eight-hour replications of each alternative system design with the
objective of identifying which design minimizes the average time
customers spend in the bank. Use the Welch confidence interval method
with a 0.10 level of significance to make the comparison. Contrast this
comparison with the ballpark guess you made in Section L9.4.
4. The DumpOnMe facility presented in Exercise 11 of Lab Section L7.12 operates with six dump
trucks. The owner of the facility wants to increase the amount of coal hauled to the railroad. The
loader operators recommend adding two more trucks for a total of eight trucks. Not to be outdone,
the scale operator recommends running the operation with 10 trucks. Trucks are expensive, so the
owner hires you to simulate the system as is and then with the additional trucks before making her
decision. Since each truck hauls approximately the same amount of coal, you will determine which
alternative delivers the most coal to the railroad by evaluating the number of trucks processed by the
scale. To compare the performance of the 6-, 8-, and 10-truck systems, run five
replications of each alternative system using a 100-minute warm-up time
followed by a 480-minute simulation run length beyond the warm-up
time. Use the Welch confidence interval method with a 0.06 level of
significance to make the comparison. Who is correct, the loader operators
or the scale operator? Are you a little surprised by the answer? Look over
the output reports from the simulations to find an explanation for the
answer.
Harrell−Ghosh−Bo II. 11. Simulation © The
wden: Simulation Labs Optimization with McGraw−Hill
Using ProModel, SimRunner Companies,
Second Edition

L A B

11 SIMULATION
OPTIMIZATION
WITH SIMRUNNER

Climb mountains to see lowlands.

—Chinese Proverb

The purpose of this lab is to demonstrate how to solve simulation-based opti-

mization problems using SimRunner. The lab introduces the five major steps for
formulating and solving optimization problems with SimRunner. After stepping
through an example application of SimRunner, we provide additional application
scenarios to help you gain experience using the software.

L11.1 Introduction to SimRunner

When you conduct an analysis using SimRunner, you build and run projects.
With each project, SimRunner applies its evolutionary algorithms to your
simulation model to seek optimal values for multiple decision variables. In
SimRunner, deci- sion variables are called input factors (Figure L11.1). For
each project, you will need to give SimRunner a model to optimize, identify
which input factors to change, and define how to measure system performance
using an objective func- tion. The following describes the terminology and
procedure used to conduct experiments using SimRunner.

Step 1. Create, verify, and validate a simulation model using ProModel, Med-
Model, or ServiceModel. Next, create a macro and include it in the run-time
interface for each input factor that is believed to influence the output of the
simu- lation model. The input factors are the variables for which you are
seeking opti- mal values, such as the number of nurses assigned to a shift or
the number of machines to be placed in a work cell. Note that SimRunner can
test only those factors identified as macros in ProModel, MedModel, or
ServiceModel.

553
554 Part II Labs

FIGURE L11.1
Relationship
between
SimRunner’s Optimization
Simulation
optimization

Optimization
Algorithms
algorithms and
ProModel simulation
model.

Input Factors

Response (Objective Function)

Step 2. Create a new SimRunner project and select the input factors you wish to
test. For each input factor, define its numeric data type (integer or real) and its
lower bound (lowest possible value) and upper bound (highest possible value).
SimRunner will generate solutions by varying the values of the input factors ac-
cording to their data type, lower bounds, and upper bounds. Care should be
taken when defining the lower and upper bounds of the input factors to ensure
that a combination of values will not be created that leads to a solution that
was not envisioned when the model was built.

Step 3. After selecting the input factors, define an objective function to

measure the utility of the solutions tested by SimRunner. The objective function
is built using terms taken from the output report generated at the end of the
simulation run. For example, the objective function could be based on entity
statistics, location statistics, resource statistics, variable statistics, and so forth.
In designing the objective function, the user specifies whether a term is to be
minimized or maximized as well as the overall weighting of that term in the
objective function. Some terms may be more important than other terms to the
decision maker. SimRunner also allows you to seek a target value for an objec-
tive function term.

Step 4. Select the optimization profile and begin the search by starting the
optimization algorithms. The optimization profile sets the size of the
evolutionary algorithm’s population. The population size defines the number of
solutions eval- uated by the algorithm during each generation of its search.
SimRunner provides
 Lab 11 Simulation Optimization with SimRunner 555

FIGURE L11.2
Generally, the larger the size of the population the better the result.

Max f(x)

Cautious
Moderate
Aggressive

Time

three population sizes: small, medium, and large. The small population size cor-
responds to the aggressive optimization profile, the medium population size
corre- sponds to the moderate optimization profile, and the large population
size cor- responds to the cautious profile. In general, as the population size is
increased, the likelihood that SimRunner will find the optimal solution
increases, as does the time required to conduct the search (Figure L11.2).

Step 5. Study the top solutions found by SimRunner and pick the best.
SimRunner will show the user the data from all experiments conducted and
will rank each solution based on its utility, as measured by the objective
function. Remember that the value of an objective function is a random variable
because it is produced from the output of a stochastic simulation model.
Therefore, be sure that each experiment is replicated an appropriate number of
times during the optimization.
Another point to keep in mind is that the list of solutions presented by
SimRunner represents a rich source of information about the behavior, or
response surface, of the simulation model. SimRunner can sort and graph the
solutions many different ways to help you interpret the “meaning” of the data.
556 Part II Labs

L11.2 SimRunner Projects

Problem Statement
Prosperity Company has selected what it thinks is the ideal product to
manufac- ture and has also designed the “ideal production system” (see
Figure L11.3). Plates of raw material arrive to the ideal production system and
are transformed into gears by a milling operation. The time between arrivals of
plates is exponen- tially distributed, as is the processing time at the milling
machine. Plates are processed in a first-in, first-out (FIFO) fashion. The time to
move material between the pallets and the milling machine is negligible. The
input and output queues have infinite capacities and the milling machine
never fails or requires maintenance. It is the ideal production system. However,
we have been asked to look for optimal operational parameters under three
different scenarios.
We begin by building a simulation model of the ideal production system.
Set the default time units to minutes in the General Information dialog box.
The model consists of three locations: InputPalletQueue, MillingMachine,
and OutputPalletQueue. Set the capacity of the InputPalletQueue to infinity (Inf)
and the capacity of the milling machine and OutputPalletQueue to one. For
simplicity, use a single entity type to represent both plates and gears. Assign
Gear as the name of the entity. The parameters for the exponentially distributed
time between arrivals and processing time will be given later. For now, set the
model’s run hours to 250 and warm-up hours to 50. The complete model is
shown in Figure L11.4. The model is included on the CD accompanying
the book under file name Lab 11_2 ProsperityCo.Mod.
Before continuing, we would like to point out that this fictitious production
system was chosen for its simplicity. The system is not complex, nor are the
example application scenarios that follow. This deliberate choice will allow us to

FIGURE L11.3
The ideal production
system for
Ideal Production System
Prosperity
Company.

Milling Machine

Input Queue Output Queue

• Infinite queue capacity

• Raw materials are plentiful
• Milling Machine never fails
 Lab 11 Simulation Optimization with SimRunner 557

FIGURE L11.4
ProModel model of Prosperity Company.
558 Part II Labs

focus on learning about the SimRunner software as opposed to getting bogged

down in modeling details. Additionally, the problems that are presented are
easily solved using queuing theory. Therefore, if so inclined, you may want to
compare the estimates obtained by SimRunner and ProModel with the actual
values obtained using queuing theory. In the real world, we seldom have such
opportuni- ties. We can take refuge in knowing that ProModel and
SimRunner are robust tools that can be effectively applied to both trivial and
complex real-world prob- lems, as was demonstrated in Chapter 11.

L11.2.1 Single Term Objective Functions

In the first scenario, the average time between arrivals of a plate of raw material
to the input pallet queue is E(3.0) minutes. For this scenario, our objective is to
find a value for the mean processing time at the milling machine that
minimizes the average number of plates waiting at the input pallet queue. (We
have a great deal of latitude when it comes to adjusting processing times for
the ideal production system.) To do this, we will create a macro in ProModel
that represents the mean processing time and give it an identification of
ProcessTime. Thus, the processing time for entities at the milling machine is
modeled as E(ProcessTime) minutes. See Operation field for the
MillingMachine location in Figure L11.4.
Before continuing, let’s cheat by taking a moment to look at how varying
the mean processing time affects the mean number of plates waiting in the input
pallet queue. The plot would resemble the one appearing in Figure L11.5.
Therefore, we can minimize the average number of plates waiting in the
queue by setting the

FIGURE L11.5
Relationship
between the mean
processing time and
Response Surface
the mean number of
entities waiting in 100
No. in Queue

the queue given a 90

Location (Queue) Contents
mean time between 80
arrivals of three. 70
60
50
40
30
20
10
0
-10

0 1.5 3
Process Time
 Lab 11 Simulation Optimization with SimRunner 559

FIGURE L11.6
ProModel macro editor.

mean processing time of the milling machine to zero minutes, which of course is
a theoretical value. For complex systems, you would not normally know the
answer in advance, but it will be fun to see how SimRunner moves through this
known response surface as it seeks the optimal solution.
The first step in the five-step process for setting up a SimRunner project is
to define the macros and their Run-Time Interface (RTI) in the simulation model.
In addition to defining ProcessTime as a macro (Figure L11.6), we shall also
define the time between arrivals (TBA) of plates to the system as a macro to
be used later in the second scenario that management has asked us to look into.
The iden- tification for this macro is entered as TBA. Be sure to set each macro’s
“Text . . .” value as shown in Figure L11.6. The Text value is the default value of
the macro. In this case, the default value for ProcessTime is 2 and the
default value of TBA is 3. If you have difficulty creating the macros or their
RTI, please see Lab Chapter 14.
Next we activate SimRunner from ProModel’s Simulation menu.
SimRunner opens in the Setup Project mode (Figure L11.7). The first step in the
Setup Project module is to select a model to optimize or to select an existing
optimization project (the results of a prior SimRunner session). For this
scenario, we are optimizing a
560 Part II Labs

FIGURE L11.7
The opening SimRunner screen.

model for the first time. Launching SimRunner from the ProModel Simulation
menu will automatically load the model you are working on into SimRunner. See
the model file name loaded in the box under “Create new project—Select
model” in Figure 11.7. Note that the authors named their model
ProsperityCo.Mod.
With the model loaded, the input factors and objective function are defined
to complete the Setup Project module. Before doing so, however, let’s take a
moment to review SimRunner’s features and user interface. After completing the
Setup Project module, you would next run either the Analyze Model module or
the Optimize Model module. The Analyze Model module helps you determine
the number of replications to run to estimate the expected value of
performance measures and/or to determine the end of a model’s warm-up
period using the techniques described in Chapter 9. The Optimize Model
module automatically seeks the values for the input factors that optimize the
objective function using the techniques described in Chapter 11. You can
navigate through SimRunner by selecting items from the menus across the top
of the window and along the left
 Lab 11 Simulation Optimization with SimRunner 561

FIGURE L11.8
Single term objective function setup for scenario one.

side of the window or by clicking the <Previous or Next> buttons near the bottom
right corner of the window.
Clicking the Next> button takes you to the section for defining the objective
function. The objective function, illustrated in Figure L11.8, indicates the desire
to minimize the average contents (in this case, plates) that wait in the location
called InputPalletQue. The InputPalletQue is a location category. Therefore, to
enter this objective, we select Location from the Response Category list under
Performance Measures by clicking on Location. This will cause SimRunner to
display the list of location statistics in the Response Statistic area. Click on the
response statistic InputPalletQue—AverageContents and then press the button
below with the down arrows. This adds the statistic to the list of response statis-
tics selected for the objective function. The default objective for each response
statistic is maximize. In this example, however, we wish to minimize the average
contents of the input pallet queue. Therefore, click on Location:Max:1*Input-
PalletQue—AverageContents, which appears under the area labeled Response
562 Part II Labs

Statistics Selected for the Objective Function; change the objective for the
response statistic to Min; and click the Update button. Note that we accepted the
default value of one for the weight of the factor. Please refer to the SimRunner
Users Guide if you have difficulty performing this step.
Clicking the Next> button takes you to the section for defining the input
factors. The list of possible input factors (macros) to optimize is displayed at the
top of this section under Macros Available for Input (Figure L11.9). The input
factor to be optimized in this scenario is the mean processing time of the milling
machine, ProcessTime. Select this macro by clicking on it and then clicking the
button below with the down arrows. This moves the ProcessTime macro to the
list of Macros Selected as Input Factors (Figure L11.9). Next, indicate that you
want to consider integer values between one and five for the ProcessTime
macro. Ignore the default value of 2.00. If you wish to change the data type or
lower and upper bounds, click on the input factor, make the desired changes,
and click the Update button. Please note that an input factor is designated as an
integer when

FIGURE L11.9
Single input factor setup for scenario one.
 Lab 11 Simulation Optimization with SimRunner 563

the lower and upper bounds appear without a decimal point in the Macros proper-
ties section. When complete, SimRunner should look like Figure L11.9.
From here, you click the Next> button until you enter the Optimize Model
module, or click on the Optimize Model module button near the top right corner
of the window to go directly to it. The first step here is to specify Optimization
op- tions (Figure L11.10). Select the Aggressive Optimization Profile. Accept
the de- fault value of 0.01 for Convergence Percentage, the default of one for
Min Gen- erations, and the default of 99999 for Max Generations.
The convergence percentage, minimum number of generations, and maxi-
mum number of generations control how long SimRunner’s optimization algo-
rithms will run experiments before stopping. With each experiment, SimRunner
records the objective function’s value for a solution in the population. The evalu-
ation of all solutions in the population marks the completion of a generation.
The maximum number of generations specifies the most generations SimRunner
will

FIGURE L11.10
Optimization and simulation options.
564 Part II Labs

use to conduct its search for the optimal solution. The minimum number of
generations specifies the fewest generations SimRunner will use to conduct its
search for the optimal solution. At the end of a generation, SimRunner
computes the population’s average objective function value and compares it with
the popu- lation’s best (highest) objective function value. When the best and the
average are at or near the same value at the end of a generation, all the
solutions in the population are beginning to look alike (their input factors
are converging to the same setting). It is difficult for the algorithms to locate a
better solution to the problem once the population of solutions has converged.
Therefore, the optimiza- tion algorithm’s search is usually terminated at this
point.
The convergence percentage controls how close the best and the average
must be to each other before the optimization stops. A convergence percentage
near zero means that the average and the best must be nearly equal before the
optimization stops. A high percentage value will stop the search early, while a
very small percentage value will run the optimization longer. High values for the
maximum number of generations allow SimRunner to run until it satisfies the
convergence percentage. If you want to force SimRunner to continue searching
after the convergence percentage is satisfied, specify very high values for both
the minimum number of generations and maximum number of generations.
Generally, the best approach is to accept the default values shown in Fig-
ure L11.10 for the convergence percentage, maximum generations, and mini-
mum generations.
After you specify the optimization options, set the simulation options. Typi-
cally you will want to disable the animation as shown in Figure L11.10 to make
the simulation run faster. Usually you will want to run more than one replication
to estimate the expected value of the objective function for a solution in the pop-
ulation. When more than one replication is specified, SimRunner will display the
objective function’s confidence interval for each solution it evaluates. Note that
the confidence level for the confidence interval is specified here. Confidence
intervals can help you to make better decisions at the end of an optimization as
discussed in Section 11.6.2 of Chapter 11. In this case, however, use one replica-
tion to speed things along so that you can continue learning other features of the
SimRunner software. As an exercise, you should revisit the problem and deter-
mine an acceptable number of replications to run per experiment. As indicated in
Figure L11.10, set the simulation warm-up time to 50 hours and the simulation
run time to 250 hours. You are now ready to have SimRunner seek the optimal
solution to the problem.
With these operations completed, click the Next> button (Figure L11.10) and
then click the Run button on the Optimize Model module (Figure L11.11) to start
the optimization. For this scenario, SimRunner runs all possible experiments,
locating the optimum processing time of one minute on its third experiment.
The Experi- mental Results table shown in Figure L11.11 records the history of
SimRunner’s search. The first solution SimRunner evaluated called for a mean
processing time at the milling machine of three minutes. The second solution
evaluated assigned a processing time of two minutes. These sequence
numbers are recorded in the
 Lab 11 Simulation Optimization with SimRunner 565

FIGURE L11.11
Experimental results table for scenario one.

Experiment column, and the values for the processing time (ProcessTime) input
factor are recorded in the ProcessTime column. The value of the term used to
define the objective function (minimize the mean number of plates waiting in
the input pallet queue) is recorded in the InputPalletQue:AverageContents
column. This value is taken from the output report generated at the end of a
simulation. Therefore, for the third experiment, we can see that setting the
ProcessTime macro equal to one results in an average of 0.162 plates waiting in
the input pallet queue. If you were to conduct this experiment manually with
ProModel, you would set the ProcessTime macro to one, run the simulation,
display output results at the end of the run, and read the average contents for the
InputPalletQue location from the report. You may want to verify this as an
exercise.
Because the objective function was to minimize the mean number of
plates waiting in the input pallet queue, the same values from the
InputPalletQue:Average- Contents column also appear in the Objective Function
column. However, notice that the values in the Objective Function column are
preceded by a negative sign
566 Part II Labs

FIGURE L11.12
SimRunner’s process for converting minimization problems to maximization problems.

100
90
80 Location (Queue) Contents
70
60 1 x Contents
50
40
30
20
10
0
-10
0 1.5
0 3

-50 -1 x Contents

-100
-110
0 1.5
3

Process Time

(Figure L11.11). This has to do with the way SimRunner treats a minimization
objective. SimRunner’s optimization algorithms view all problems as
maximization problems. Therefore, if we want to minimize a term called
Contents in an objective function, SimRunner multiplies the term by a negative
one {(−1)Contents}. Thus SimRunner seeks the minimal value by seeking
the maximum negative value. Figure L11.12 illustrates this for the ideal
production system’s response surface.
Figure L11.13 illustrates SimRunner’s Performance Measures Plot for this
optimization project. The darker colored line (which appears red on the
computer screen) at the top of the Performance Measures Plot represents the
best value of the objective function found by SimRunner as it seeks the
optimum. The lighter colored line (which appears green on the computer screen)
represents the value of the objective function for all of the solutions that
SimRunner tried.
The last menu item of the Optimize Model module is the Response Plot
(Figure L11.11), which is a plot of the model’s output response surface based on
the solutions evaluated during the search. We will skip this feature for now and
cover it at the end of the lab chapter.
 Lab 11 Simulation Optimization with SimRunner 567

FIGURE L11.13
SimRunner’s
Performance Plot
indicates the progress
of the optimization
for scenario one.

L11.2.2 Multiterm Objective Functions

Objective functions may be composed of any number of terms taken from the
out- put of a simulation model. This application scenario demonstrates the
construc- tion of an objective function with two terms.
The managers of the ideal production system presented in Section L11.2.1
have a not-so-ideal objective for the system. They have conflicting objectives of
(1) maximizing the number of gears produced and (2) minimizing the amount of
space allocated for storing work-in-process at the input pallet queue area.
Because space has to be available for the maximum number of plates that could
wait in the queue, the second objective can be restated as minimizing the
maximum number of plates waiting at the input pallet queue. In attempting to
satisfy the managers’ objectives, both the mean processing time at the milling
machine (ProcessTime) and the mean time between arrivals (TBA) of plates to
the input pallet queue can be varied. Each of these input factors can be assigned
integer values between one and five minutes. To allow SimRunner to change the
mean time between arrivals (TBA) in the simulation model, enter E(TBA) in
the Frequency column of the model’s Arrivals table (Figure L11.4).
Remember that you previously defined TBA as a macro.
The SimRunner objective function for this scenario is shown in Figure
L11.14. The first segment of the objective function can be implemented using
the output response statistic that records the total number of gear entities that
exit the system (Gear:TotalExits), which is an Entity response category. The
second seg- ment is implemented using the output response statistic that records
the maximum number of plate entities that occupied the input pallet queue
location during the simulation (InputPalletQue:MaximumContents), which is a
Location response
568 Part II Labs

FIGURE L11.14
Multiterm objective function for scenario two.

category. Management has indicated that a fairly high priority should be

assigned to minimizing the space required for the input pallet queue area.
Therefore, a weight of 100 is assigned to the second term in the objective
function and a weight of one is assigned to the first term. Thus the objective
function consists of the fol- lowing two terms:
Maximize [(1)(Gear:TotalExits)]
and Minimize [(100)(InputPalletQue:Maximum Contents)]
SimRunner minimizes terms by first multiplying each minimization term
appearing in the objective function by a negative one, as explained in Section
L11.2.1. Similarly, SimRunner multiplies each maximization term by a positive
one. Next the terms are arranged into a linear combination as follows:
(+1)[(1)(Gear:TotalExits)] + (−1)[(100)
(InputPalletQue:MaximumContents)] which reduces to
[(1)(Gear:TotalExits)] + [(−100)(InputPalletQue:MaximumContents)]
 Lab 11 Simulation Optimization with SimRunner 569

Given that SimRunner’s optimization algorithms view all problems as maxi-

mization problems, the objective function F becomes
F = Maximize {[(1)(Gear:TotalExits)]
+ [(−100)(InputPalletQue:MaximumContents)]}
The highest reward is given to solutions that produce the largest number of gears
without allowing many plates to accumulate at the input pallet queue. In fact, a
solution is penalized by 100 points for each unit increase in the maximum
number of plates waiting in the input pallet queue. This is one way to handle
competing objectives with SimRunner.
Develop a SimRunner project using this objective function to seek the
optimal values for the input factors (macros) TBA and ProcessTime, which are
integers between one and five (Figure L11.15). Use the aggressive optimization
profile with the convergence percentage set to 0.01, max generations equal to
99999, and min generations equal to one. To save time, specify one replication

FIGURE L11.15
Multiple input factors setup for scenario two.
570 Part II Labs

FIGURE L11.16
Experimental results table for scenario two.

per experiment. (Remember, you will want to run multiple replications on real
applications.) Also, set the simulation run hours to 250 and the warm-up hours
to 50 for now.
At the conclusion of the optimization, SimRunner will have run four
genera- tions as it conducted 23 experiments (Figure L11.16). What values do
you recom- mend to management for TBA and ProcessTime?
Explore how sensitive the solutions listed in the Experimental Results table
for this project are to changes in the weight assigned to the maximum contents
statistic. Change the weight of this second term in the objective function from
100 to 50. To do this, go back to the Define Objectives section of the Setup Pro-
ject module and update the weight assigned to the InputPalletQue—Maximum-
Contents response statistic from 100 to 50. Upon doing this, SimRunner warns
you that the action will clear the optimization data that you just created. You can
save the optimization project with the File Save option if you wish to keep the
results from the original optimization. For now, do not worry about saving
the data and click the Yes button below the warning message. Now rerun the
 Lab 11 Simulation Optimization with SimRunner 571

FIGURE L11.17
Experimental results table for scenario two with modified objective function.

optimization and study the result (Figure L11.17). Notice that a different solution
is reported as optimum for the new objective function. Running a set of prelimi-
nary experiments with SimRunner is a good way to help fine-tune the weights
as- signed to terms in an objective function. Additionally, you may decide to
delete terms or add additional ones to better express your desires. Once the
objective function takes its final form, rerun the optimization with the proper
number of replications.

L11.2.3 Target Range Objective Functions

The target range objective function option directs SimRunner to seek a “target”
value for the objective function term instead of a maximum or minimum value.
For example, you may wish to find an arrangement for the ideal production
system that produces from 100 to 125 gears per day. Like the maximization and
minimization objective options, the target range objective option can be used
alone or in combination with the maximization and minimization options.
572 Part II Labs

For this application scenario, the managers of the ideal production system
have specified that the mean time to process gears through the system should
range between four and seven minutes. This time includes the time a plate waits
in the input pallet queue plus the machining time at the mill. Recall that we built
the model with a single entity type, named Gear, to represent both plates and
gears. Therefore, the statistic of interest is the average time that the gear entity is
in the system. Our task is to determine values for the input factors ProcessTime
and TBA that satisfy management’s objective.
The target range objective function is represented in SimRunner as shown in
Figure L11.18. Develop a SimRunner project using this objective function to
seek the optimal values for the input factors (macros) TBA and ProcessTime.
Specify that the input factors are integers between one and five, and use the
aggressive optimization profile with the convergence percentage set to 0.01,
maximum gen- erations equal to 99999, and minimum generations equal to one.
To save time, set

FIGURE L11.18
Target range objective function setup for scenario three.
 Lab 11 Simulation Optimization with SimRunner 573

FIGURE 11.19
Experimental results table with Performance Measures Plot for scenario three.

the number of replications per experiment to one. (Remember, you will want to
run multiple replications on real applications.) Also, set the simulation run hours
to 250 and the warm-up hours to 50 and run the optimization. Notice that only
the solutions producing a mean time in the system of between four and seven
minutes for the gear received a nonzero value for the objective function (Figure
L11.19). What values do you recommend to management for TBA and
ProcessTime?
Now plot the solutions SimRunner presented in the Experimental Results
table by selecting the Response Plot button on the Optimize Model module
(Figure L11.19). Select the independent variables as shown in Figure L11.20 and
click the Update Chart button. The graph should appear similar to the one in
Figure L11.20. The plot gives you an idea of the response surface for this objec-
tive function based on the solutions that were evaluated by SimRunner. Click the
Edit Chart button to access the 3D graph controls to format the plot and to
reposi- tion it for different views of the response surface.
574 Part II Labs

FIGURE L11.20
Surface response plot for scenario three.

L11.3 Conclusions
Sometimes it is useful to conduct a preliminary optimization project using only
one replication to help you set up the project. However, you should rarely, if ever,
make decisions based on an optimization project that used only one replication
per experi- ment. Therefore, you will generally conduct your final project
using multiple replications. In fact, SimRunner displays a confidence interval
about the objective function when experiments are replicated more than once.
Confidence intervals indicate how accurate the estimate of the expected value of
the objective function is and can help you make better decisions, as noted in
Section 11.6.2 of Chapter 11.
Even though it is easy to use SimRunner, do not fall into the trap of letting
SimRunner, or any other optimizer, become the decision maker. Study the top
solutions found by SimRunner as you might study the performance records of
different cars for a possible purchase. Kick their tires, look under their hoods,
and drive them around the block before buying. Always remember that the
optimizer is not the decision maker. SimRunner can only suggest a possible
course of action. It is your responsibility to make the final decision.
 Lab 11 Simulation Optimization with SimRunner 575

L11.4 Exercises
Simulation Optimization Exercises
1. Rerun the optimization project presented in Section L11.2.1, setting the
number of replications to five. How do the results differ from the original
results?
2. Conduct an optimization project on the buffer allocation problem
presented in Section 11.6 of Chapter 11. The model’s file name is
Lab 11_4 BufferOpt Ch11.Mod and is included on the CD
accompanying the textbook. To get your results to appear as shown in
Figure 11.5 of Chapter 11, enter Buffer3Cap as the first input factor,
Buffer2Cap as the second input factor, and Buffer1Cap as the third input
factor. For each input factor, the lower bound is one and the upper bound
is nine. The objective is to maximize profit. Profit is computed in the
model’s termination logic by
Profit = (10*Throughput)
— (1000*(Buffer1Cap + Buffer2Cap + Buffer3Cap))
Figure L11.21 is a printout of the model. See Section 11.6.2 of Chapter
11 for additional details. Use the Aggressive optimization profile and
set the number of replications per experiment to 10. Specify a warm-up
time of 240 hours, a run time of 720 hours, and a confidence level of
95 percent. Note that the student version of SimRunner will halt at
25 experiments, which will be before the search is completed. However,
it will provide the data necessary for answering these questions:
a. How do the results differ from those presented in Chapter 11 when
only five replications were run per experiment?
b. Are the half-widths of the confidence intervals narrower?
c. Do you think that the better estimates obtained by using 10
replications will make it more likely that SimRunner will find the true
optimal solution?
3. In Exercise 4 of Lab Section L10.5, you increased the amount of coal
delivered to the railroad by the DumpOnMe facility by adding more
dump trucks to the system. Your solution received high praise from
everyone but the lead engineer at the facility. He is concerned about the
maintenance needs for the scale because it is now consistently operated
in excess of 90 percent. A breakdown of the scale will incur substantial
repair costs and loss of profit due to reduced coal deliveries. He wants
to know the number of trucks needed at the facility to achieve a target
scale utilization of between 70 percent and 75 percent. This will allow
time for proper preventive maintenance on the scale. Add a macro to
the
simulation model to control the number of dump trucks circulating in the
system. Use the macro in the Arrivals Table to specify the number of
dump trucks that are placed into the system at the start of each
simulation. In SimRunner, select the macro as an input factor and assign
FIGURE L11.21
Buffer allocation model from Chapter 11 (Section 11.6.2).
Lab 11 Simulation Optimization with SimRunner 577

it a lower bound of one and an upper bound of 15. Conduct an

optimization project to seek the number of trucks that will achieve the
target scale utilization using the Aggressive optimization profile, five
replications per experiment, a warm-up time of 100 minutes, and a run
time of 480 minutes.

SimRunner Warm-up Detection Exercises

SimRunner’s Analyze Model module implements the Welch moving average
technique presented in Section 9.6.1 of Chapter 9 to help you determine the end
of a nonterminating simulation’s warm-up phase before beginning an optimiza-
tion project. It also helps you evaluate the number of replications needed to
obtain a point estimate to within a specified percentage error and
confidence level. Although the module was created to help you set up an
optimization project, it is also useful for nonoptimization projects. To use the
module without optimization, you declare a dummy macro in your simulation
model and select it as an input factor in SimRunner. Then you select the output
statistic that you wish to use in order to evaluate the end of the simulation’s
warm-up. The output statistic is entered as an objective function term.
Exercises 4 and 5 here involve this feature of SimRunner.
4. This exercise will help you duplicate the SimRunner result presented in
Figure L9.14 of Lab Chapter 9, which was used to estimate the end of
the warm-up phase for the Green Machine Manufacturing Company
(GMMC) simulation model. Load the GMMC model into ProModel,
declare a dummy macro, and define its Run-Time Interface (RTI). Start
SimRunner. The purpose of the GMMC model was to estimate the
steady-state value of the time-average amount of work-in-process
(WIP) inventory in the system. Therefore, select the WIP—Average
Value response statistic from the Variable response category as a
SimRunner maximization objective. Select the dummy macro as an
input factor. Click the Next> button to move into the Analyze Model
module, and fill in the parameters as shown in Figure L11.22.
Percentage error in the objective function estimate is the desired
amount of relative error in our average WIP inventory estimate
expressed as a percentage (see Section 9.2.3 of Chapter 9 for additional
details on relative error). In this case, we are seeking to approximate
the number of replications needed to estimate the average WIP with a
percentage error of 7 percent and a confidence level of 90 percent as
we also estimate the end of the warm-up phase. Click the Next> button
and then the Run button on the Conduct Analysis window to start the
analysis. After SimRunner runs the simulation for five replications, your
screen should appear similar to Figure L9.14. Here you adjust the
number of periods for the moving average window to help you identify
the end of simulation’s warm-up, which seems to occur between periods
33 and 100. SimRunner computes that at least 10 replications are needed
578 Part II Labs

FIGURE L11.22
SimRunner
parameters for the
GMMC warm- up
example.

to estimate the average WIP inventory with a 7 percent error and a

confidence level of 90 percent assuming a 100-period (hour) warm-up.
5. Use SimRunner’s Analyze Model module
to determine the end of the warm-up phase
of the DumpOnMe simulation model with
six dump trucks as presented in Exercise 11
of Lab Section L7.12. Base your
assessment of the warm-up phase on five
replications of the simulation with a run
time of 300 minutes, and an output
recording time interval of one minute.
Harrell−Ghosh−Bo II. 12. Intermediate © The
wden: Simulation Labs Modeling Concepts McGraw−Hill
Using ProModel, Companies,
Second Edition

L A B

12 INTERMEDIATE
MODELING CONCEPTS

All truths are easy to understand once they are discovered; the point is to
discover them.
—Galileo Galilei

In this lab we expand on the ProModel concepts discussed in Chapters 3 and 6.

Section L12.1 introduces the concept of attributes; Section L12.2 shows its
appli- cation in the calculation of cycle times; and Section L12.3 shows the
process of sortation, sampling inspection, and rework. In Section L12.4 we
show how to merge two different submodules. Section L12.5 discusses
various aspects of machine breakdowns and maintenance; Section L12.6
shows how ProModel can conveniently model shift-working patterns; Section
L12.7 shows the application of ProModel in a job shop; Section L12.8
introduces the modeling of priorities; and Section L12.9 has a couple of
examples of pull system applications in manu- facturing. Costs are modeled and
tracked in Section L12.10. Section L12.11 shows how to import background
graphics into a model, and Section L12.12 shows how to define and display
various views of a model.

L12.1 Attributes
Attributes can be defined for entities or for locations. Attributes are
placeholders similar to variables but are attached to specific entities or
locations and usually contain information about that entity or location.
Attributes are changed and as- signed when an entity executes the line of logic
that contains an operator, much like the way variables work. Some examples of
attributes are part type, customer number, and time of arrival of an entity, as
well as length, weight, volume, or some other characteristic of an entity.

579
580 Part II Labs

To define an attribute use the attribute editor, as follows:

1. Go to the Build/More Elements/Attributes menu and create a name (ID)
for the attribute.
2. Select the type of attribute—integer or real.
3. Select the class of attribute—entity or location.

L12.1.1 Using Attributes to Track Customer Types

Problem Statement
Customers visit the neighborhood barbershop Fantastic Dan for a haircut.
Among the customers there are 20 percent children, 50 percent women, and 30
percent men. The customer interarrival time is triangularly distributed with a
minimum, mode, and maximum of seven, eight, and nine minutes respectively.
The haircut time (in minutes) depends on the type of customer and is given in
Table L12.1. This time also includes the initial greetings and the transaction of
money at the end of the haircut. Run the simulation model for one day (480
minutes).
a. About how many customers of each type does Dan process per day?
b. What is the average number of customers of each type waiting to get a
haircut? What is the maximum?
c. What is the average time spent by a customer of each type in the salon?
What is the maximum?
Two locations (Barber Dan and Waiting for Dan) and an entity (Customer) are
de- fined. Customer_Type is defined as an attribute (type = integer and
classification = entity) as shown in Figure L12.1. The process/routing and
customer arrivals are defined as shown in Figures L12.2 and L12.3. A snapshot
of the simulation model is shown in Figure L12.4.
FIGURE L12.1
Customer_Type declared as an attribute.

TABLE L12.1 The Haircut Time for All Customers

Haircut Time (minutes)

Customers Mean Half-Width

Children 8 2
Women 12 3
Men 10 2
 Lab 12 Intermediate Modeling Concepts 581

FIGURE L12.2
Process and routing tables for Fantastic Dan.

FIGURE L12.3
Arrival of customers at Fantastic Dan.

FIGURE L12.4
Simulation model for Fantastic Dan.
582 Part II Labs

L12.2 Cycle Time

The Clock and Log are functions built into ProModel to allow us to keep track
of system events such as cycle time, lead time, or flow time within the system.
The Clock function returns the current simulation clock time in hours, minutes,
or sec- onds. The value returned is real.
The Log function is used to subtract an expression from the current simula-
tion clock time and stores the result with a text string header.
Time_In = Clock()
Log "Cycle Time =", Time_In
For the example in Section L12.1, find
a. The cycle time for each type of customer of Barber Dan.
b. The average cycle time for all customers.
Define Time_In as an attribute to track the time of arrival for all customer types.
Figure L12.5 shows the setting of the attribute Time_In and also the logging of
the average cycle time. The cycle times for children, women, and men are
reported in Figure L12.6.

FIGURE L12.5
Setting the attribute Time_In and logging the cycle time.

FIGURE L12.6
The minimum,
maximum, and
average cycle times
for various
customers.
 Lab 12 Intermediate Modeling Concepts 583

L12.3 Sorting, Inspecting a Sample, and Rework

Problem Statement
Orders for two types of widgets (widget A and widget B) are received by
Widgets- R-Us Manufacturing Inc. Widget A orders arrive on average every
five minutes (exponentially distributed), while widget B orders arrive on
average every ten min- utes (exponentially distributed). Both widgets arrive
at the input queue. An attribute Part_Type is defined to differentiate between
the two types of widgets. Widget A goes to the lathe for turning operations that
take Normal(5,1) min- utes. Widget B goes on to the mill for processing that
takes Uniform(6,2) minutes. Both widgets go on to an inspection queue, where
every fifth part is inspected. Inspection takes Normal(6,2) minutes. After
inspection, 70 percent of the widgets pass and leave the system; 30 percent of
the widgets fail and are sent back to the
input queue for rework. Determine the following:
a. How many widgets of each type are shipped each week (40-hour week)?
b. What is the cycle time for each type of widget?
c. What are the maximum and minimum cycle times?
d. What is the number of widgets reworked each week?
e. What is the average number of widgets waiting in the inspection queue?
Five locations (Mill, Input_Queue, Lathe, Inspect, and Inspect_Q) are defined
for this model. Three variables are defined, as in Figure L12.7. Figure L12.8
shows how we keep track of the machined quantity as well as the probabilistic
routings
FIGURE L12.7
Variables for Widgets-R-Us.

FIGURE L12.8
Keeping track of machined_qty and probabilistic routings at the Inspect location.
584 Part II Labs

FIGURE L12.9
Simulation model for Widgets-R-Us.

after inspection. Figure L12.9 shows the complete simulation model with coun-
ters added for keeping track of the number of widgets reworked and the number
of widgets shipped.

L12.4 Merging a Submodel

Sometimes a large model is built in smaller segments. A model segment can be
a manufacturing cell or a department. Different analysts can build each
segment. After all segments are complete, they can be merged together to form a
single uni- fied model.
The Merge Model option in the File menu allows two or more independent
(complete or incomplete) models to be merged together into a single model. En-
tity and attribute names common to both models are considered common ele-
ments in the merged model. Duplicate locations, resources, or path networks
must first be renamed or deleted from the original merging model. If the
graphic li- braries are different, the user has an option to append the merging
model’s graphic library to the base model’s graphic library. All other duplicate
elements cause a prompt to appear with a choice to delete the duplicate element.

Problem Statement
Poly Casting Inc. (Lab 7, Section L7.4) decides to merge with El Segundo
Com- posites (Lab 7, Section L7.6.1). The new company is named El
Segundo
 Lab 12 Intermediate Modeling Concepts 585

Castings N’ Composites. Merge the model for Section L7.4 with the model for
Section L7.6.1. All the finished products—castings as well as composites—are
now sent to the shipping queue and shipping clerk. The model in Section L7.4 is
shown in Figure L12.10. The complete simulation model, after the model for
Sec- tion L7.6.1 is merged, is shown in Figure L12.11. After merging, make the
neces- sary modifications in the process and routing tables.
We will make suitable modifications in the Processing module to reflect
these changes (Figure L12.12). Also, the two original variables in Section L7.4
(WIP and PROD_QTY) are deleted and four variables are added: WIPCasting,
WIP- Composite, PROD_QTY_Casting, and PROD_QTY_Composite.

FIGURE L12.10
The layout of the
simulation model for
Section L7.4.

FIGURE L12.11
Merging the models from Section L7.4 and Section L7.6.1.
586 Part II Labs

FIGURE L12.12
Changes made to the process table after merging.

L12.5 Preventive Maintenance and Machine Breakdowns

Downtime stops a location or resource from operating. Downtime can occur in
one of two ways: preventive maintenance or breakdown. A down resource (or
location) no longer functions and is not available for use. Downtimes may
represent sched- uled interruptions such as shifts, breaks, or scheduled
maintenance. They may also represent unscheduled and random interruptions
such as equipment failures.
The mean time between failures (MTBF) can be calculated as the reciprocal
of the failure rate (distribution of failure over time). Often MTBF will follow a
nega- tive exponential distribution. In particular, the probability of failure
before time
T is given by 1 − e−T /MTBF. The reliability is viewed as performance over time
and is the probability that a given location or resource will perform its
intended
function for a specified length of time T under normal conditions of use:
Reliability = P(no failure before time T ) = e−T /MTBF
The mean time to repair (MTTR) refers to the time the location or resource re-
mains down for repair. The MTTR depends on the ease and/or cost with which a
location or resource can be maintained or repaired.
For single-capacity locations, downtime of a location or resource can
be scheduled at regular intervals based on the clock time that has expired, the
num- ber of entities processed at a location, the usage of the machine (resource)
in time, or a change in entity type. Unscheduled breakdown of a machine can
also be mod- eled in a similar fashion.
To model preventive maintenance or breakdowns, use the following procedure:
1. Go to the Build/Locations menu.
2. Click on the DT button.
 Lab 12 Intermediate Modeling Concepts 587

3. Enter the frequency of downtime:

a. Clock based.
b. Number of entries based.
c. Usage based.
4. Enter the first time downtime occurs.
5. Enter the priority of the downtime.
6. In the logic field, enter any logic associated with downtime.
Example:
DISPLAY "The Lathe is down for preventive maintenance"
WAIT N(20,5) min
7. To disable the downtime feature, click Yes in the disable field. Otherwise,
leave this field as No.

L12.5.1 Downtime Using MTBF and MTTR Data

The lathe and the mill at Widgets-R-Us Manufacturing Inc. (Section L12.3)
have the maintenance schedule shown in Table L12.2. The logic for the preven-
tive maintenance operation is created in Figure L12.13. The processes and

FIGURE L12.13
The logic for preventive maintenance at Widgets-R-Us Manufacturing Inc.

TABLE L12.2 Maintenance Schedule for Machines at Widgets-R-Us

Machine Time between Repairs Time to Repair

Lathe 120 minutes N(10,2) minutes

Mill 200 minutes T(10,15,20) minutes
588 Part II Labs

FIGURE L12.14
Processes and routings at Widgets-R-Us Manufacturing Inc.

FIGURE L12.15
Complete simulation model for Widgets-R-Us Manufacturing Inc.

routings are shown in Figure L12.14. Figure L12.15 shows the complete simu-
lation model.

L12.5.2 Downtime Using MTTF and MTTR Data

Reliability of equipment is frequently calibrated in the field using the mean time
to failure (MTTF) data instead of the MTBF data. MTTR is the expected time
between the end of repair of a machine and the time the machine fails. Data
collected in the field are often based on TTF for clock-based failures.
 Lab 12 Intermediate Modeling Concepts 589

Problem Statement
The turning center in this machine shop (Figure L12.16) has a time to failure
(TTF) distribution that is exponential with a mean of 10 minutes. The repair
time (TTR) is also distributed exponentially with a mean of 10 minutes.
This model shows how to get ProModel to implement downtimes that use
time to failure (TTF) rather than time between failures (TBF). In practice, you
most likely will want to use TTF because that is how data will likely be avail-
able to you, assuming you have unexpected failures. If you have regularly
scheduled downtimes, it may make more sense to use TBF. In this example, the
theoretical percentage of uptime is MTTF/(MTTF + MTTR), where M
indicates a mean value. The first time to failure and time to repair are set in
the variable
initialization section (Figure L12.17). Others are set in the downtime logic (Fig-
ure L12.18).
The processing and routing tables are shown in Figure L12.19. Run this
model for about 1000 hours, then view the batch mean statistics for downtime
by picking “averaged” for the period (Figure L12.20) when the output analyzer
(clas- sical) comes up. The batch mean statistics for downtime for the turning
center are shown in Figure L12.21. (This problem was contributed by Dr.
Stephen Chick, University of Michigan, Ann Arbor.)

FIGURE L12.16
Layout of the machine
shop—modeling
breakdown with TTF
and TTR.

FIGURE L12.17
Variable
initializations.
590 Part II Labs

FIGURE L12.18
Clock downtime logic.

FIGURE L12.19
Process and routing tables.

FIGURE L12.20
Average of all the
batches in the
Classical ProModel
Output Viewer.

FIGURE L12.21
Batch mean statistics for downtime.
 Lab 12 Intermediate Modeling Concepts 591

L12.6 Operator Shifts

ProModel offers an excellent interface to include the operator (location or re-
source) shift working schedules in the simulation model. The shift work for
each operator in the model can be defined separately. Work cycles that repeat
either daily or weekly can be defined.

Problem Statement
Orders for two types of widgets (widget A and widget B) are received by
Widgets-R-Us Manufacturing Inc. Widget A orders arrive on average every
5 minutes (exponentially distributed), while widget B orders arrive on average
every 10 minutes (exponentially distributed). Both widgets arrive at the input
queue. An attribute Part_Type is defined to differentiate between the two types of
widgets.
Widget A goes on to the lathe for turning operations that take Normal(5,1)
min- utes. Widget B goes on to the mill for processing that takes Uniform(4,8)
minutes. Both widgets go on to an inspection queue, where every fifth part is
inspected. Inspection takes Normal(6,2) minutes. After inspection, 70 percent of
the widgets pass and leave the system, while 30 percent of the widgets fail and
are sent back to the input queue for rework.
An operator is used to process the parts at both the lathe and the mill. The
operator is also used to inspect the part. The operator moves the parts from
the input queue to the machines as well as to the inspection station. The operator
is on a shift from 8 A.M. until 5 P.M. with breaks as shown in Table L12.3 and
Figures L12.22 and L12.23.
Use the DISPLAY statement to notify the user when the operator is on a
break. Set up a break area (Figure L12.24) for the operator by extending the
path net- work to a break room and indicating the node as the break node in
Resource specs. The processes and the routings at Widgets-R-Us are shown
in Figure L12.25. Determine the following:
a. How many widgets of each type are shipped each week (40-hour
week).
b. The cycle time for each type of widgets.
c. The maximum and minimum cycle times.

TABLE L12.3 The Operator Break Schedule at

Widgets-R-Us Manufacturing Inc.

Breaks From To

Coffee break 10 A.M. 10:15 A.M.

Lunch break 12 noon 12:45 P.M.
Coffee break 3 P.M. 3:15 P.M.
592 Part II Labs

FIGURE L12.22
The operator Joe’s weekly work and break times at Widgets-R-Us.

FIGURE L12.23
Assigning the Shift File to the operator Joe.

d. The number of widgets reworked each week.

e. The average number of widgets waiting in the inspection queue.
Run the model with and without shift breaks (Figure L12.26). What differ-
ence do you notice in these statistics? How can you improve the system?
 Lab 12 Intermediate Modeling Concepts 593

FIGURE L12.24
The layout and path network at Widgets-R-Us.

FIGURE L12.25
Processes and routings at Widgets-R-Us.

FIGURE L12.26
A snapshot during
the simulation model
run for Widgets-R-
Us.
594 Part II Labs

L12.7 Job Shop

A job shop is a collection of processing centers through which jobs are routed
in different sequences depending on the characteristics of the particular job. It
is a common method of grouping resources for producing small lots with widely
vary- ing processing requirements.
Each job in a job shop usually has a unique routing sequence. Job shops
usu- ally have a process layout. In other words, similar processes are
geographically grouped together.

Problem Statement
In Joe’s Jobshop there are three machines through which three types of jobs are
routed. All jobs go to all machines, but with different routings. The data for job
routings and processing times (minutes) are given in Table L12.4. The process
times are exponentially distributed with the given average values. Jobs arrive at
the rate of Exponential(30) minutes. Simulate for 10 days (80 hours). How many
jobs of each type are processed in 10 days?
Figures L12.27, L12.28, L12.29, L12.30, and L12.31 show the locations,
entities, variables, processes, and layout of Joe’s Jobshop.

FIGURE L12.27
Locations at Joe’s Jobshop.

TABLE L12.4 Summary of Process Plan for Joe’s Jobshop

Jobs Machines Process Times (minutes) Job Mix

A 2–3–1 45–60–75 25%

B 1–2–3 70–70–50 35%
C 3–1–2 50–60–60 40%
 Lab 12 Intermediate Modeling Concepts 595

FIGURE L12.28
Entities at Joe’s
Jobshop.

FIGURE L12.29
Variables to track jobs
processed at Joe’s
Jobshop.

FIGURE L12.30
Processes and routings at Joe’s Jobshop.
596 Part II Labs

FIGURE L12.31
Layout of Joe’s Jobshop.

L12.8 Modeling Priorities

Priorities allow us to determine the order in which events occur in the
simulation. The most common uses of priorities are
1. Selecting among upstream processes.
2. Selecting among downstream processes—already discussed in Lab 7,
Section L7.3.
3. Selecting resources.
4. Prioritizing downtimes—discussed in Section L12.5.

L12.8.1 Selecting among Upstream Processes

This is the process of choosing among a set of upstream processes or queues for
entity removal and routing to a downstream process. When one downstream
destination exists and two or more upstream entities are competing to get there,
priorities can be used. In the example in Figure L12.32 two entities at different
locations (Process A and Process B) are both trying to get to Process C.

Problem Statement
At Wang’s Export Machine Shop in the suburbs of Chicago, two types of jobs
are processed: domestic and export. The rate of arrival of both types of jobs is
 Lab 12 Intermediate Modeling Concepts 597

FIGURE L12.32
Choosing among upstream processes.

TABLE L12.5 Process Times at Wang’s Export

Machine Shop

Machine Process Time

Machining center Triangular(10,12,18) minutes

Lathe Triangular(12,15,20) minutes

TABLE L12.6 Distances between Locations

From To Distance (feet)

Incoming Machining center 200

Machining center Lathe 400
Lathe Outgoing 200
Outgoing Incoming 400

Exponential(60) minutes. All jobs are processed through a machining center

and a lathe. The processing times (Table L12.5) for all jobs are triangularly
distrib- uted. A forklift truck that travels at the rate of 50 feet/minute handles all
the ma- terial. Export jobs are given priority over domestic jobs for shop release
—that is, in moving from the input queue to the machining center. The distance
between the stations is given in Table L12.6. Simulate for 16 hours.
598 Part II Labs

FIGURE L12.33
Forklift resource specified for Wang’s Export Machine Shop.

Five locations are defined: Lathe, Machining_Center, In_Q_Domestic,

In_Q_Export, and Outgoing_Q. Two entities (domestic and export) are defined.
Both these entities arrive with an interarrival time that is exponentially
distributed with a mean of 60 minutes. The resource (forklift) and its path
network are shown in Figures L12.33 and L12.34, respectively. The processes
and routings are shown in Figure L12.35. Note that the priority of domestic
jobs is set at a value of 1 (Figure L12.33), while that of export jobs is set at
10. Higher priority numbers signify higher priority in terms of selecting the
upstream process. The priorities can range from 0 to 999. The default priority is
0.

L12.8.2 Selecting Resources

Priorities can also be used to decide which process, among two or more compet-
ing processes requesting the same resource, will have priority in capturing that
resource.
 Lab 12 Intermediate Modeling Concepts 599

FIGURE L12.34
Definition of path network for forklift for Wang’s Export Machine Shop.

FIGURE L12.35
Processes and routings defined for Wang’s Export Machine Shop.
600 Part II Labs

Problem Statement
At Wang’s Export Machine Shop, two types of jobs are processed: domestic
and export. Mr. Wang is both the owner and the operator. The rate of arrival of
both types of jobs is Exponential(60) minutes. Export jobs are processed on
machining center E, and the domestic jobs are processed on machining
center D. The processing times for all jobs are triangularly distributed (10,
12, 18) minutes. Mr. Wang gives priority to export jobs over domestic jobs. The
distance between the stations is given in Table L12.7.
Five locations (Machining_Center_D, Machining_Center_E,
In_Q_Domestic, In_Q_Export, and Outgoing_Q) are defined. Two types of jobs
(domestic and ex- port) arrive with an exponential interarrival frequency
distribution of 60 minutes. Mr. Wang is defined as a resource in Figure L12.36.
The path network and the processes are shown in Figures L12.37 and L12.38
respectively. Mr. Wang is get- ting old and can walk only 20 feet/minute with a
load and 30 feet/minute without a load. Simulate for 100 hours.
Priorities of resource requests can be assigned through a GET, JOINTLY GET,
or USE statement in operation logic, downtime logic, or move logic or the
subrou- tines called from these logics. Priorities for resource downtimes are
assigned in the Priority field of the Clock and Usage downtime edit tables.
Note that the priority of the resource (Mr_Wang) is assigned through the GET
statement in the operation logic (Figure L12.38). The domestic orders have a re-
source request priority of 1, while that of the export orders is 10.

FIGURE 12.36
Resource defined for Wang’s Export Machine Shop.

TABLE L12.7 Distances between Stations at Wang’s Export

Machine Shop

From To Distance (feet)

Machining_Center_E Machining_Center_D 200

Machining_Center_D Outgoing 200
Outgoing Machining_Center_E 200
 Lab 12 Intermediate Modeling Concepts 601

FIGURE L12.37
Path network defined at Wang’s Export Machine Shop.

FIGURE L12.38
Processes and routings defined at Wang’s Export Machine Shop.

The results (partial) are shown in Figure L12.39. Note that the average time
waiting for the resource (Mr_Wang) is about 50 percent more for the domestic
jobs (with lower priority) than for the export jobs. The average time in the
system for domestic jobs is also considerably more than for the export jobs.
602 Part II Labs

FIGURE L12.39
Part of the results showing the entity activities.

L12.9 Modeling a Pull System

A pull system is a system in which locations produce parts only on
downstream demand. There are two types of pull systems:
1. Those based on limited buffer or queue sizes.
2. Those based on more distant “downstream” demand.
The first type of pull system is modeled in ProModel by defining locations
with limited capacity. In this type of system, upstream locations will be able to
send parts to downstream locations only when there is capacity available.

L12.9.1 Pull Based on Downstream Demand

The second type of pull system requires the use of a SEND statement from a
down- stream location to trigger part movement from an upstream location.

Problem Statement
In the Milwaukee Machine Shop, two types of jobs are processed within a ma-
chine cell. The cell consists of one lathe and one mill. Type 1 jobs must be
processed first on the lathe and then on the mill. Type 2 jobs are processed only
on the mill (Table L12.8). All jobs are processed on a first-in, first-out basis.
Brookfield Forgings is a vendor for the Milwaukee Machine Shop and pro-
duces all the raw material for them. Forgings are produced in batches of five
every day (exponential with a mean of 24 hours). However, the customer
supplies them only on demand. In other words, when orders arrive at the
Milwaukee Machine Shop, the raw forgings are supplied by the vendor (a pull
system of shop loading). Simulate for 100 days (2400 hours). Track the work-
in-process inventories and the production quantities for both the job types.
Six locations (Mill, Lathe, Brookfield_Forgings, Order_Arrival, Lathe_Q,
and Mill_Q) and four entities (Gear_1, Gear_2, Orders_1, and Orders_2) are
defined. The arrivals of various entities are defined as in Figure L12.40. Four
variables are defined as shown in Figure L12.41. The processes and routings are
 Lab 12 Intermediate Modeling Concepts 603

FIGURE L12.40
Arrival of orders at the Milwaukee Machine Shop.

FIGURE L12.41
Variables defined for
the Milwaukee
Machine Shop.

TABLE L12.8 Order Arrival and Process Time Data

for the Milwaukee Machine Shop

Job Number of Time between Processing Time Processing Time

Type Orders Order Arrival on Lathe on Mill

1 120 E(8) hrs E(3) hrs U(3,1) hrs

2 100 E(10) hrs — U(4,1) hrs

shown in Figure L12.42. Note that as soon as a customer order is received at the
Milwaukee Machine Shop, a signal is sent to Brookfield Forgings to ship a gear
forging (of the appropriate type). Thus the arrival of customer orders pulls the
raw material from the vendor. When the gears are fully machined, they are
united (JOINed) with the appropriate customer order at the orders arrival
location. Fig- ure L12.43 shows a layout of the Milwaukee Machine Shop and a
snapshot of the simulation model.

L12.9.2 Kanban System

The kanban system is one of the methods of control utilized within the Toyota
production system (TPS). The basic philosophy in TPS is total elimination of
604 Part II Labs

FIGURE L12.42
Processes and routings defined for the Milwaukee Machine Shop.

FIGURE L12.43
Simulation model for the Milwaukee Machine Shop.

waste in machines, equipment, and personnel. To make the flow of things as

close as possible to this ideal condition, a system of just-in-time procurement
of material is used—that is, obtain material when needed and in the quantity
needed.
 Lab 12 Intermediate Modeling Concepts 605

“Kanban” literally means “visual record.” The word kanban refers to the
signboard of a store or shop, but at Toyota it simply means any small sign dis-
played in front of a worker. The kanban contains information that serves as a
work order. It gives information concerning what to produce, when to
produce it, in what quantity, by what means, and how to transport it.

Problem Statement
A consultant recommends implementing a production kanban system for Sec-
tion 12.9.1’s Milwaukee Machine Shop. Simulation is used to find out how
many kanbans should be used. Model the shop with a total of five kanbans.
The kanban procedure operates in the following manner:
1. As soon as an order is received by the Milwaukee Machine Shop,
they communicate it to Brookfield Forgings.
2. Brookfield Forgings holds the raw material in their own facility in the
forging queue in the sequence in which the orders were received.
3. The production of jobs at the Milwaukee Machine Shop begins only
when a production kanban is available and attached to the production
order.
4. As soon as the production of any job type is finished, the kanban is
detached and sent to the kanban square, from where it is pulled by
Brookfield Forgings and attached to a forging waiting in the forging
queue to be released for production.
The locations at the Milwaukee Machine Shop are defined as shown in Fig-
ure L12.44. Kanbans are defined as virtual entities in the entity table (Fig-
ure L12.45).
The arrival of two types of gears at Brookfield Forgings is shown in the ar-
rivals table (Figure L12.46). This table also shows the arrival of two types of
cus- tomer orders at the Milwaukee Machine Shop. A total of five kanbans are
generated at the beginning of the simulation run. These are recirculated through
the system.

FIGURE L12.44
Locations at the Milwaukee Machine Shop.
606 Part II Labs

FIGURE L12.45
Entities defined for
Milwaukee Machine
Shop.

FIGURE L12.46
Arrival of orders at Milwaukee Machine Shop.

FIGURE L12.47
Simulation model of a kanban system for the Milwaukee Machine Shop.
 Lab 12 Intermediate Modeling Concepts 607

FIGURE L12.48
Process and routing tables for the Milwaukee Machine Shop.

Figure L12.47 shows the layout of the Milwaukee Machine Shop. The
processes and the routings are shown in Figure L12.48. The arrival of a
customer order (type 1 or 2) at the orders arrival location sends a signal to
Brookfield Forg- ings in the form of a production kanban. The kanban is
temporarily attached (LOADed) to a gear forging of the right type at the Order_Q.
The gear forgings are sent to the Milwaukee Machine Shop for processing.
After they are fully processed, the kanban is separated (UNLOADed). The kanban
goes back to the kan- ban square. The finished gear is united (JOINed) with the
appropriate customer order at the orders arrival location.

L12.10 Tracking Cost

ProModel 6.0 includes a cost-tracking feature. The following costs can be
monitored:
1. Location cost
2. Resource cost
3. Entity cost
The cost dialog can be accessed from the Build menu (Figure L12.49).
608 Part II Labs

FIGURE 12.49
The Cost option in the
Build menu.

FIGURE L12.50
The Cost dialog box—Locations option.

Locations
The Locations Cost dialog box (Figure L12.50) has two fields: Operation Rate
and Per Operation Rate specifies the cost per unit of time to process at the
selected location. Costs accrue when an entity waits at the location or uses the
location. Per is a pull-down menu to set the time unit for the operation rate as
second, minute, hour, or day.

Resources
The Resources Cost dialog box (Figure L12.51) has three fields: Regular Rate,
Per, and Cost Per Use. Regular Rate specifies the cost per unit of time for a re-
source used in the model. This rate can also be set or changed during run time
 Lab 12 Intermediate Modeling Concepts 609

FIGURE L12.51
The Cost dialog box—Resources option.

FIGURE L12.52
The Cost dialog box—Entities option.

using the SETRATE operation statement. Per is a pull-down menu, defined

before. Cost Per Use is a field that allows you to define the actual dollar cost
accrued every time the resource is obtained and used.

Entities
The Entities Cost dialog box (Figure L12.52) has only one field: Initial Cost.
Initial Cost is the cost of the entity when it arrives to the system through a
sched- uled arrival.
610 Part II Labs

Increment Cost
The costs of a location, resource, or entity can be incremented by a positive or
negative amount using the following operation statements:
• IncLocCost—Enables you to increment the cost of a location.
• IncResCost—Enables you to increment the cost of a resource.
• IncEntCost—Enables you to increment the cost of an entity.

For more information on the cost-tracking feature of ProModel, refer to Lab

6 of the ProModel manual.

Problem Statement
Raja owns a manufacturing cell consisting of two mills and a lathe. All jobs are
processed in the same sequence, consisting of an arriving station, a lathe, mill 1,
mill 2, and an exit station. The processing time on each machine is normally dis-
tributed with a mean of 60 seconds and standard deviation of 5. The arrival rate
of jobs is exponentially distributed with a mean of 120 seconds.
Raja, the material handler, transports the jobs between the machines and the
arriving and exit stations. Job pickup and release times are uniformly distributed
between six and eight seconds. The distances between the stations are given in
Table L12.9. Raja can walk at the rate of 150 feet/minute when carrying no load.
However, he can walk only at the rate of 80 feet/minute when carrying a load.
The operation costs for the machines are given in Table L12.10. Raja gets
paid at the rate of $60 per hour plus $5 per use. The initial cost of the jobs
when they enter the system is $100 per piece. Track the number of jobs
produced, the total cost of production, and the cost per piece of production.
Simulate for 80 hours.

TABLE L12.9 Distances between Stations

From To Distance (feet)

Arriving Lathe 40
Lathe Mill 1 80
Mill 1 Mill 2 60
Mill 2 Exit 50
Exit Arrive 80

TABLE L12.10 Operation Costs at Raja’s

Manufacturing Cell

Machine Operation Costs

Lathe $10/minute
Mill 1 $18/minute
Mill 2 $22/minute
 Lab 12 Intermediate Modeling Concepts 611

FIGURE L12.53
Processes and routings at Raja’s manufacturing cell.

FIGURE L12.54
Simulation model of Raja’s manufacturing cell.

Five locations (Lathe, Mill1, Mill2, Arrive_Station, and Exit_Station) and

three variables (Total_Prod, Cost_Per_Part, and Total_Cost) are defined. The
processes are shown in Figure L12.53. The simulation model is shown in Figure
L12.54.

L12.11 Importing a Background

Background graphics work as a static wallpaper and enhance the look of a simu-
lation model. They make the model realistic and provide credibility during pre-
sentations. Many different graphic formats can be imported such as .BMP,
.WMF,
.GIF, and .PCX. Drawings in CAD formats like .DWG must be saved in one of
these file formats before they can be imported. .BMPs and .WMFs can be copied
to the clipboard from other applications and passed directly into the background.
612 Part II Labs

AutoCAD drawings can also be copied to the clipboard and pasted into the back-
ground. The procedure is as follows:
1. With the graphic on the screen, press <Ctrl> and <C> together.
Alternatively, choose Copy from the Edit menu. This will copy the
graphic into the Windows clipboard.
2. Open an existing or new model file in ProModel.
3. Press <Ctrl> and <V> together. Alternatively, choose Paste from the
Edit menu.
This action will paste the graphic as a background on the layout of the model.
Another way to import backgrounds is to use the Edit menu in ProModel:
1. Choose Background Graphics from the Build menu.
2. Select Front of or Behind grid.
3. Choose Import Graphic from the Edit menu.
4. Select the desired file and file type. The image will be imported into
the layout of the model.
5. Left-click on the graphic to reposition and resize it, if necessary.
“Front of grid” means the graphic will not be covered by grid lines when the
grid is on. “Behind grid” means the graphic will be covered with grid lines when
the grid is on.

L12.12 Defining and Displaying Views

Specific areas of the model layout can be predefined and then quickly and easily
viewed in ProModel. Each view can be given a unique name and can have a
suit- able magnification. These views can be accessed during editing of the
model by selecting Views from the View menu (Figure L12.55) or by using the
keyboard shortcut key. Views can also be accessed in real time during the
running of the model with a VIEW "mill_machine" statement.

Problem Statement
For the Shipping Boxes Unlimited example in Lab 7, Section L7.7.2, define the
following six views: Monitor Queue, Box Queue, Inspect Queue, Shipping
Queue, Pallet Queue, and Full View. Each view must be at 300 percent magnifi-
cation. Show Full View at start-up. Show the Pallet Queue when an empty pallet
arrives at the pallet queue location. Go back to showing the Full View when the
box is at the shipping dock. Here are the steps in defining and naming views:
1. Select the View menu after the model layout is finished.
2. Select Views from the View menu.
The Views dialog box is shown in Figure L12.56. Figure L12.57 shows the Add
View dialog box. The Full View of the Shipping Boxes Inc. model is shown in
Figure L12.58.
 Lab 12 Intermediate Modeling Concepts 613
FIGURE L12.56
FIGURE L12.55 The Views dialog box.
Views command in the View menu.

FIGURE L12.57
The Add View
dialog box.

Referencing a View in Model Logic

1. Select General Information (Figure L12.59) from the Build menu. Select
Initialization Logic and use the VIEW statement:
View "Full View"
2. Select Processing from the Build menu. Use the following statement in
the Operation field when the Pallet Empty arrives at the Pallet Queue
location (Figure L12.60):
View "Pallet Queue"
Also, use the following statement in the Operation field when the box
arrives at the shipping dock:
View "Full View"
614 Part II Labs

FIGURE L12.58
Full View of the Shipping Boxes Inc. model.

FIGURE L12.59
General Information
for the Shipping Boxes
Inc. model.
 Lab 12 Intermediate Modeling Concepts 615

FIGURE L12.60
Processes and routings at Shipping Boxes Inc. incorporating the change of views.

L12.13 Creating a Model Package

ProModel has an innovative feature of creating a package of all files associated
with the model file. This package file is titled <model name>.PKG—for
example, ATM.pkg. The package file can then be archived or distributed to
others. This file includes the model file (*.MOD), the graphic library (unless
you check the Ex- clude Graphics Library option), and any external files you
defined (such as read files, arrivals files, and shift files); the model package
automatically includes bitmaps imported into the background graphics. The
package file can be subse- quently unpackaged by the receiver to run.
Use the following steps to create a model package:
1. Select Create Model Package from the File menu.
2. Enter the name you wish to use for the model package. ProModel uses
the name of the model file as the default name of the package. So
ATM.mod will be packaged as ATM.pkg. You can also Browse . . . to
select the model name and directory path.
3. Check/uncheck the Exclude Graphics Library box, if you want to
include/exclude the graphics library.
4. Check the Protect Model Data box if you want to protect the data in your
model and prevent other users from changing and even viewing the
model data files.
5. Click OK.
616 Part II Labs

Example
For the Widgets-R-Us example in Section L12.6, make a model package that in-
cludes the model file and the shift file for operator Joe. Save the model package
in a floppy disk. Figure L12.61 shows the Create Model Package dialog.

Unpack
To unpack and install the model package, double-click on the package file. In the
Unpack Model Package dialog select the appropriate drive and directory path to
install the model file and its associated files (Figure L12.62). Then click Install.
After the package file has been installed, ProModel prompts you (Figure
L12.63) for loading the model. Click Yes.

FIGURE L12.61
Create Model Package
dialog.

FIGURE L12.62
Unpack Model
Package dialog.
 Lab 12 Intermediate Modeling Concepts 617

FIGURE L12.63
Load Model dialog.

L12.14 Exercises
1. Five different types of equipment are available for processing a special
type of part for one day (six hours) of each week. Equipment 1 is
available on Monday, equipment 2 on Tuesday, and so forth. The
processing time data follow:

Equipment Time to Process One Part (minutes)

1 5± 2
2 4± 2
3 3± 1.5
4 6± 1
5 5± 1

Assume that parts arrive at a rate of one every 4 ± 1 hours, including

weekends. How many parts are produced each week? How large a
storage area is needed for parts waiting for a machine? Is there a
bottleneck at any particular time? Why?
2. Customers visit the neighborhood barbershop Fantastic Dan for a haircut. Among the customers there are
30 percent children, 50 percent women, and 20 percent men. The customer interarrival time is triangularly
distributed with a minimum, mode, and maximum of 8, 11, and 14 minutes respectively. The haircut time
(in minutes) depends on the type of customer, as shown in this table:

Haircut Time (minutes)

Customers Mean Half-Width

Children 8 2
Women 12 3
Men 10 2
 618 Part II Labs

The initial greetings and signing in take Normal (2, • 2) minutes, and the
transaction of money at the end of the haircut takes Normal (3, • 3) minutes.
Run the simulation model for 100 working days (480 minutes each).
a. About how many customers of each type does Dan process per day?
b. What is the average number of customers of each type waiting to get
a haircut? What is the maximum?
c. What is the average time spent by a customer of each type in the
salon? What is the maximum?
3. Poly Castings Inc. receives castings from its suppliers in batches of one every eleven minutes
exponentially distributed. All castings arrive at the raw material store. Of these castings, 70 percent are
used to make widget A, and the rest are used to make widget B. Widget A goes from the raw material
store to the mill, and then on to the grinder. Widget B goes directly to the grinder. After grinding, all
widgets go to degrease for cleaning. Finally, all widgets are sent to the finished parts store. Simulate
for 1000 hours.

Widget Process 1 Process 2 Process 3

Widget A Mill [N(5,2) min.] Grinder [U(11,1) min.] Degrease [7 min.]

Widget B Grinder [U(9,1) min.] Degrease [7 min.]

Track the work-in-process inventory of both types of widgets

separately. Also, track the production of finished widgets (both types).
4. The maintenance mechanic in the problem in Section L12.5.1 is an inde- pendent contractor and works
four hours each day from 10 A.M. until 2 P.M., Monday through Friday, with no lunch break. The rest of
the shop works from 8 A.M. until 4 P.M. What will be the impact on the shop (average cycle time and
number of widgets made per day) if we hire him full-time and have him work from 8 A.M. until 4 P.M.
instead of working part-time?
5. Consider the United Electronics Exercise 7, in Section L7.12, with the following enhancements. The
soldering machine breaks down on average after every 2000 ± 200 minutes of operation. The repair
time is normally distributed (100, 50) minutes. Create a simulation model, with animation, of this
system. Simulate this manufacturing system
for 100 days, eight hours each day. Collect and print statistics on the
utilization of each station, associated queues, and the total number of
jobs manufactured during each eight-hour shift (average).
6. Consider the Poly Casting Inc. example in Lab 7, Section L7.4, and answer the following
questions:
a. What is the average time a casting spends in the system?
b. What is the average time a casting waits before being loaded on a
mill? After a mill processes 25 castings, it is shut down for a
uniformly distributed time between 10 and 20 minutes for cleaning
and tool change.
 Lab 12 Intermediate Modeling Concepts 619

c. What percentage of the time does each mill spend in cleaning and
tool change operations?
d. What is the average time a casting spends in the system?
e. What is the average work-in-process of castings in the system?
7. Consider the NoWaitBurger stand in Exercise 13, in Section L7.12, and answer the following
questions.
a. What is the average amount of time spent by a customer at the
hamburger stand?
b. Run 10 replications and compute a 90 percent confidence interval for the
average amount of time spent by a customer at the stand.
c. Develop a 90 percent confidence interval for the average number of
customers waiting at the burger stand.
8. Sharukh, Amir, and Salman wash cars at the Bollywood Car Wash. Cars arrive every 10 ± 6 minutes.
They service customers at the rate of one every 20 ± 10 minutes. However, the customers prefer Sharukh
to Amir, and Amir over Salman. If the attendant of choice is busy, the
customers choose the first available attendant. Simulate the car wash
system for 1000 service completions (car washes). Answer the
following questions:
a. Estimate Sharukh’s, Amir’s, and Salman’s utilization.
b. On average, how long does a customer spend at the car wash?
c. What is the longest time any customer spent at the car wash?
d. What is the average number of customers at the car wash?
Embellishment: The customers are forced to choose the first available
attendant; no individual preferences are allowed. Will this make a
significant enough difference in the performance of the system to justify
this change? Answer questions a through d to support your argument.
9. Cindy is a pharmacist and works at the Save-Here Drugstore. Walk- in customers arrive at a rate of one
every 10 ± 3 minutes. Drive-in customers arrive at a rate of one every 20 ± 10 minutes. Drive-in
customers are given higher priority than walk-in customers. The number of items in a prescription varies
from 1 to 5 (3 ± 2). Cindy can fill one item in 6 ± 1 minutes. She works from 8 A.M. until 5 P.M. Her
lunch break is from 12 noon until 1 P.M. She also takes two 15-minute
breaks: at 10 A.M. and at 3 P.M. Define a shift file for Cindy named
Cindy.sft. Model the pharmacy for a year (250 days) and answer the
following questions:
a. Estimate the average time a customer (of each type) spends at the
drugstore.
b. What is the average number of customers (of each type) waiting for
service at the drugstore?
c. What is the utilization of Cindy (percentage of time busy)?
d. Do you suggest that we add another pharmacist to assist Cindy? How
many pharmacists should we add?
 620 Part II Labs

e. Is it better to have a dedicated pharmacist for drive-in customers and

another for walk-in customers?
f. Create a package file called SaveHere.pkg that includes the
simulation model file and the shift file Cindy.sft.
10. A production line with five workstations is used to assemble a
product. Parts arrive to the first workstation at random exponentially distributed intervals with a mean
of seven minutes. Service times at individual stations are exponentially distributed with a mean of
three minutes.
a. Develop a simulation model that collects data for time in the system
for each part.
b. Additional analysis shows that products from three different priority
classes are assembled on the line. Products from different classes
appear in random order; products from classes 1, 2, and 3 have
highest, medium, and lowest priorities respectively. Modify the
simulation program to reflect this situation. Determine the mean time
in the system for the three different priority classes.

Class 1 2 3

Probability 0.3 0.5 0.2

c. The assembly process is modified so that each product to be

assembled is placed on a pallet. The production supervisor wants
to know how many pallets to place in operation at one time. It
takes
Uniform(8 ± 2) minutes to move the pallet from station 5 to station
1. Pallet loading and unloading times are Uniform(3 ± 1) minutes
each. Modify the simulation model to reflect this situation. Is it
better to use
5 or 20 pallets?
11.Two types of parts arrive at a single machine where they are processed one part at a time. The first type
of part has a higher priority and arrives exponentially with a mean interarrival time of 30 minutes. The
second lower-priority type also arrives exponentially with a mean interarrival time of 30 minutes.
Within priority classes, the parts are serviced in FIFO order, but between priority classes the higher-
priority type will always be processed first. However, a lower-priority part cannot be interrupted once
it has begun processing. The machine processing times for higher- and lower-priority types of parts are
uniformly distributed
(20 ± 5) and (8 ± 2) minutes, respectively. Simulate the system for
1000 hours.
a. What are the average time in queue and average time in system for
each type of part?
b. What are the average production rates of each type of part per hour?
12. The manufacture of a certain line of composite aerospace subassembly
involves a relatively lengthy assembly process, followed by a short
 Lab 12 Intermediate Modeling Concepts 621

firing time on an oven, which holds only one sub-assembly at a time.

An assembler cannot begin assembling a new sub-assembly until he or
she has removed the old one from the oven. The following is the
pattern of processes followed by each assembler:
a. Assemble next subassembly.
b. Wait, first-come, first-served, to use the oven.
c. Use the oven.
d. Return to step a.
Here are the operating times and relevant financial data:

Time Required
Operation (minutes)

Assemble 30 ± 5
Fire 8± 2

Cost Information
Item ($)

Assembler’s salary $35/hour

Oven cost $180 per 8-hour workday
(independent of utilization)
Raw material $8 per sub-assembly
Sale price of finished sub-assembly $40 per sub-assembly

Build a simulation model of this manufacturing process. Use the model

to determine the optimal number of assemblers to be assigned to an
oven. The optimal number is understood in this context to be the one
maximizing profit. Base the determination on simulations equivalent
to 2000 hours of simulated time. Assume there are no discontinuities
within a working day, or in moving between consecutive eight-hour
working days. (Adapted from T. Schriber, Simulation using GPSS, John
Wiley, 1974.)
13. For the following office work, the likelihood of needing rework after
audit is 15 percent. Interarrival times are exponentially distributed with a mean of 5 minutes, rework
times are exponentially distributed

Audit 15% Rework

Office work

85%
622 Part II Labs

with a mean of 4 minutes, audit time is uniformly distributed between

2 ± 1 minutes, and work times are normally distributed with an average
time of 4.5 minutes and standard deviation of 1.0 minute.
a. What is the mean time in the system for the first 200 reworked office
files?
b. Develop a histogram of the mean time in the system for the first
1000 departures.
c. Modify the simulation program so that office work is rejected if it
fails a second audit. How many office files are inspected twice? How
many of these fail the audit a second time?
d. Modify the program to count the number of office files staying in the
system longer than a specified length of time. What percentage of
the office work stays in the system for more than 12 minutes?
e. Modify the part a simulation program so that it takes uniform
(3 ± 1) minutes to move the office file from one station to another.
f. Modify the part a simulation program so that files to be reworked for
second or more times have a lower priority than files needing rework
for the first time. Does it seem to make a difference in the overall
mean time in the system?
Harrell−Ghosh−Bo II. 13. Material © The
wden: Simulation Labs Handling McGraw−Hill
Using ProModel, Concepts Companies,
Second Edition

L A B

13 MATERIAL
HANDLING
CONCEPTS

With malice toward none, with charity for all, with firmness in the right, as God
gives us to see the right, let us strive on to finish the work we are in . . .
—Abraham Lincoln (1809–1865)

In this lab we introduce you to various material handling concepts in ProModel.

First we introduce you to the concepts of conveyors. In the next section we
intro- duce manual and other discrete material handling systems, such as the
forklift truck. Section L13.3 introduces the concepts of a crane system. For a
more de- tailed discussion of modeling various material handling systems,
please refer to Chapter 13.

L13.1 Conveyors
Conveyors are continuous material handling devices for transferring or moving
objects along a fixed path having fixed, predefined loading and unloading points.
Some examples of conveyors are belt, chain, overhead, power-and-free, roller,
and bucket conveyors.
In ProModel, conveyors are locations represented by a conveyor graphic. A
conveyor is defined graphically by a conveyor path on the layout. Once the path
has been laid out, the length, speed, and visual representation of the conveyor
can be edited by double-clicking on the path and opening the Conveyor/Queue
dialog box (Figure L13.1). The various conveyor options are specified in the
Conveyor Options dialog box, which is accessed by clicking on the Conveyor
Options but- ton in the Conveyor/Queue dialog box (Figure L13.2).
In an accumulating conveyor, if the lead entity comes to a stop, the trailing
entities queue behind it. In a nonaccumulating conveyor, if the lead entity is un-
able to exit the conveyor, then the conveyor and all other entities stop.

623
624 Part II Labs

FIGURE L13.1
The Conveyor/Queue
dialog box.

FIGURE L13.2
The Conveyor
Options dialog box.

L13.1.1 Multiple Conveyors

Problem Statement
At Ship’n Boxes Inc., boxes of type A arrive at Conv1 at the rate of one every
five minutes (exponentially distributed). They are sent to the shipping conveyor.
Boxes of type B arrive at Conv2 at the rate of one every two minutes
(exponential) and are also sent to the shipping conveyor. The shipping conveyor
takes boxes of both type A and B to the truck waiting at the shipping dock. The
speed and length of the conveyors are given in Table L13.1. Develop a
simulation model and run it for 10 hours. Figure out how many boxes of each
type are shipped in 10 hours.
Four locations (Conv1, Conv2, Shipping, and Shipping_Dock) and two enti-
ties (Box_A and Box_B) are defined. The processes and layout are shown in
Fig- ures L13.3 and L13.4 respectively.
 Lab 13 Material Handling Concepts 625

FIGURE L13.3
Processes and routings for the Ship’n Boxes Inc. model.

FIGURE L13.4
Simulation
model layout for
Ship’n Boxes
Inc.

TABLE L13.1 Conveyor Lengths and Speeds

Name Length Speed

Conv1 100 30 feet/minute

Conv2 100 50 feet/minute
Shipping 200 20 feet/minute

L13.2 Resources, Path Networks, and Interfaces

A resource is a person, piece of equipment, or some other device that is used for
one or more of the following functions: transporting entities, assisting in per-
forming operations on entities at locations, performing maintenance on
locations, or performing maintenance on other resources. In the following
example, an op- erator is used as an example of a resource.
626 Part II Labs

A path network defines the way a resource travels between locations. The
specifications of path networks allow you to define the nodes at which the
resource parks, the motion of the resource, and the path on which the resource
travels. Path networks consist of nodes that are connected by path segments. A
beginning node and an ending node define a path segment. Path segments may
be unidirectional or bidirectional. Multiple path segments, which may be
straight or joined, are connected at path nodes. To create path networks:
1. Select the Path button and then left-click in the layout where you want
the path to start.
2. Subsequently, left-click to put joints in the path and right-click to end the
path.
Interfaces are where the resource interacts with the location when it is on
the path network. To create an interface between a node and a location:
1. Left-click and release on the node (a dashed line appears).
2. Then left-click and release on the location.
Multiple interfaces from a single node to locations can be created, but only
one interface may be created from the same path network to a particular
location.

L13.2.1 Manual Material Handling Systems

Problem Statement
At Ghosh’s Gear Shop, a small automotive OEM facility, there are two NC
lathes, a degreaser, and inspection equipment. Blanks are received at the
receiving area. The blanks are machined on either NC lathe 1 or NC lathe 2
(machines are as- signed by turn for successive blanks). After machining, the
cogs go to the de- greaser for washing. Then the cogs are inspected. An
operator moves the parts from one area to another. The operator is also
required to run the machines and perform the inspection procedure.
Blanks arrive at the rate of 10 per hour (exponentially distributed). The ma-
chining, washing, and inspection processes take Uniform(15 ± 5), Uniform(5 ±
1), and Normal(8, 4) minutes respectively. It takes Exponential(2) minutes to
move the material between the processes. The operator is paid $20 per hour. It
costs the company $0.10 for each hour the parts spend in processing in the
manufacturing shop. The profit per item is $20.00 after deducting direct
material costs and all
other overhead. Build a simulation model, run it for 100 hours, and determine
how many operators the shop should hire (one, two, or three).
Five locations (Receive, NC_Lathe_1, NC_Lathe_2, Inspect, and
Degrease), two entities (Blank and Cog), and a resource (Operator) are defined.
The processes and routings are shown in Figure L13.5. The blanks arrive with
an interarrival time that is exponentially distributed with a mean of 20 minutes.
The simulation run hours are set at 100 in the Simulation Option menu. The
model is titled Ghosh’s Gear Shop in the General Information menu. The layout
of Ghosh’s Gear Shop is shown in Figure L13.6.
 Lab 13 Material Handling Concepts 627

FIGURE L13.5
Process and routing logic at Ghosh’s Gear Shop.

FIGURE L13.6
Layout of Ghosh’s Gear Shop.

We ran this model with one, two, or three operators working together. The
results are summarized in Tables L13.2 and L13.3. The production quantities and
the average time in system (minutes) are obtained from the output of the simula-
tion analysis. The profit per hour, the expected delay cost per piece, and the
628 Part II Labs

TABLE L13.2 Production Performance at Ghosh’s Gear Shop

Number of Production Quantity Production Rate Gross Profit Average Time in

Operators Per 100 Hours Per Hour Per Hour System (minutes)

1 199 1.99 39.80 2423

2 404 4.04 80.80 1782
3 598 5.98 119.60 1354

TABLE L13.3 Net Profit at Ghosh’s Gear Shop

Expected Expected Expected

Number of Delay Cost Delay Cost Service Cost Total Net Profit
Operators ($/piece) ($/hour) ($/hour) ($/hour)

1 $4.04 $8.04 $20 $11.76

2 $2.97 $12.00 $40 $28.80
3 $2.25 $13.45 $60 $46.15

expected delay cost per hour are calculated as follows:

Profit per hour = Production rate per hour × Profit per
piece Expected delay cost ($/piece) = [Average time in system (min.)/60]
× $0.1/piece/hr.
Expected delay cost ($/hr.) = Expected delay cost ($/piece)
× Production rate/hr.
The total net profit per hour after deducting the expected delay and the ex-
pected service costs is
Total net profit/hr. = Gross profit/hr. − Expected delay cost/hr.
— Expected service cost/hr.
The net profit per hour is maximized with three operators working in the
shop. However, it must be noted that by hiring two operators instead of one, the
increase in net profit per hour is about 145 percent, but the increase is only about
60 percent when three operators are hired instead of one.

L13.2.2 Manual versus Automated Material

Handling Systems
We will now consider the impact of installing a conveyor system in the manu-
facturing facility described in the previous section. The conveyor will move all
the material from one location to another and will replace the cell operator. The
conveyor costs $50 per foot to install and $30,000 per year to maintain. The
 Lab 13 Material Handling Concepts 629

additional throughput can be sold for $20 per item profit. Should we replace one
operator in the previous manufacturing system with a conveyor system? Build a
simulation model and run it for 100 hours to help in making this decision.
The layout, locations, and processes and routings are defined as shown
in Figures L13.7, L13.8, and L13.9 respectively. The length of each conveyor is
40 feet (Figure L13.10). The speeds of all three conveyors are assumed to be
50 feet/minute (Figure L13.11).
The results of this model are summarized in Tables L13.4 and L13.5. The
production quantities and the average time in system (minutes) are obtained
from the output of the simulation analysis. The profit per hour, the expected
delay cost

FIGURE L13.7
Layout of Ghosh’s Gear Shop with conveyors.

FIGURE L13.8
Locations at Ghosh’s
Gear Shop with
conveyors.
630 Part II Labs

FIGURE L13.9
Process and routing at Ghosh’s Gear Shop with conveyors.

FIGURE L13.10
Conveyors at Ghosh’s
Gear Shop.

FIGURE L13.11
Conveyor options at
Ghosh’s Gear Shop.
Lab 13 Material Handling Concepts 631

TABLE L13.4 Production and Gross Profit at Ghosh’s Gear Shop

Production
Mode of Quantity Production Rate Gross Profit Average Time in
Transportation Per 100 Hours Per Hour Per Hour System (minutes)

Conveyor 747 7.47 $149.40 891

TABLE L13.5 Net Profit at Ghosh’s Gear Shop

Expected Expected Expected

Mode of Delay Cost Delay Cost Service Cost Total Net
Transportation ($/piece) ($/hour) ($/hour) Profit ($/hour)

Conveyor $1.485 $11.093 $16 $122.307

per piece, and the expected delay cost per hour are calculated as follows:
Profit per hour = Production rate/hour × Profit per
piece Expected delay cost ($/piece) = (Average time in system
(min.)/60)
× $0.1/piece/hour
Expected delay cost ($/hour) = Expected delay cost ($/piece)
× Production rate/hour
To calculate the service cost of the conveyor, we assume that it is used about
2000 hours per year (8 hrs/day × 250 days/year). Also, for depreciation
purposes, we assume straight-line depreciation over three years.
Total cost of installation = $50/ft. × 40 ft./conveyor segment
× 3 conveyor segments
= $6000
Depreciation per year = $6000/3 =
$2000/year Maintenance cost =
$30,000/year
Total service cost/year = Depreciation cost + Maintenance cost
= $32,000/year
Total service cost/hour = $32,000/2000 = $16/hour
The total net profit per hour after deducting the expected delay and the ex-
pected service costs is
Total net profit/hour = Gross profit/hour − Expected delay cost/hour
— Expected service cost/hour
Comparing the net profit per hour between manual material handling and
conveyorized material handling, it is evident that conveyors should be installed
to maximize profit.
632 Part II Labs

L13.2.3 Using Operator for Processing

In the following example we use an operator for material handling as well as
some of the processing done in the shop.

Problem Statement
Modify the example in Section L7.7.1 by having a material handler (let us call
him Joe) return the pallets from the shipping dock to the packing workbench.
Eliminate the pallet return conveyor. Also, let’s have Joe load the boxes onto
pallets [Uniform(3,1) min] and the loaded pallets onto the shipping conveyor.
Assume one pallet is in the system. Simulate for 10 hours and determine the
following:
1. The number of monitors shipped.
2. The utilization of the material handler.
Seven locations (Conv1, Conv2, Shipping_Q, Shipping_Conv, Shipping_Dock,
Packing_Table, and Load_Zone) are defined. The resource (Joe) is defined as
shown in Figure L13.12. The path network for the resource and the processes
and routings are shown in Figures L13.13 and L13.14 respectively. The arrivals
of the entities are shown in Figure L13.15. The layout of Ship’n Boxes Inc.
with con- veyors is shown in Figure L13.16.

L13.2.4 Automated Manufacturing Cell

Problem Statement
Raja owns a manufacturing cell consisting of two mills and a lathe. All jobs are
processed in the same sequence, consisting of arrival station, lathe, mill 1, mill
2,

FIGURE L13.12
Material handler as a resource.

FIGURE L13.13
Path network for the material handler.
 Lab 13 Material Handling Concepts 633

FIGURE L13.14
Processes and routings for the example in Section L13.2.3.

FIGURE L13.15
Arrivals for the example in Section L13.2.3.

FIGURE L13.16
The layout for
Shipping Boxes Inc.
634 Part II Labs

and exit station. The processing time on each machine is normally distributed
with a mean of 60 seconds and a standard deviation of 5 seconds. The arrival
rate of jobs is exponentially distributed with a mean of 120 seconds.
Raja also transports the jobs between the machines and the arrival and exit
stations. Job pickup and release times are uniformly distributed between six and
eight seconds. The distances between the stations are given in Table L13.6. Raja
can travel at the rate of 150 feet/minute when carrying no load. However, he can
walk at the rate of only 80 feet/minute when carrying a load. Simulate for 80
hours.
The layout, locations, path networks, resource specification, and processes
and routings are shown in Figures L13.17, L13.18, L13.19, L13.20, and L13.21,
respectively.

FIGURE L13.17
Layout of Raja’s manufacturing cell.

TABLE L13.6 Distances between Stations at Raja’s Manufacturing Cell

From To Distance (feet)

Arrival station Lathe 40

Lathe Mill 1 80
Mill 1 Mill 2 60
Mill 2 Exit 50
Exit Arrive 80
 Lab 13 Material Handling Concepts 635

FIGURE L13.18
Locations at Raja’s manufacturing cell.

FIGURE L13.19
Path networks at Raja’s manufacturing cell.

FIGURE L13.20
Resource specification at Raja’s manufacturing cell.
636 Part II Labs

FIGURE L13.21
Process and routing tables at Raja’s manufacturing cell.

L13.3 Crane Systems

ProModel provides the constructs for modeling crane systems. The path
networks module and the resources module provide modeling features for the
crane sys- tems. Modeling one or multiple cranes operating in the same bay is
easily possi- ble. Users can define the following regarding crane systems:
Crane envelope: The crane envelope is a parallelogram-shaped area
represented by a crane-type path network. Two rails and two lines
connecting the endpoints of the rails bound this envelope. The lines
connecting the endpoints of the rails are the two extreme positions of the
centerlines of the crane bridge.
Bridge separation distance: This is the minimum distance between the
center- lines of any two neighboring cranes. Make sure to define the crane
envelope as wide enough to allow sufficient space beyond any serviceable
nodes.
Priorities: Two types of priorities are associated with the crane construct in
ProModel: resource request priority and crane move priority.
1. Resource request priorities are used to resolve any conflicts between
multiple entities requesting the same crane at the same time. Lower-
priority tasks are preempted to serve higher-priority tasks.
2. Crane move priorities are used when multiple cranes are operating in
the same work envelope to decide which crane has priority over another
to move. Crane move priorities can be subdivided into three categories:
a. Task move priority is used as the base move priority for travel to pick
up and travel to drop a load.
b. Claim priority is the same as the task move priority if the crane is
moving to its ultimate (task) destination. Otherwise, if it is moving
under the influence of another crane, claim priority is equal to the
claim priority of the claim inducer bridge.
c. Effective claim priority applies only when there are three or more
cranes operating in the same envelope. If multiple cranes are moving
in the same direction with overlapping claims, the effective claim
priority in the overlapping zone is the maximum of all the claim
priorities of those cranes.
For more details on crane operations, and in particular to understand how
zone claims are handled, please refer to the ProModel Reference Guide.
 Lab 13 Material Handling Concepts 637

Problem Statement
Pritha takes over the manufacturing operation (Section L13.2.4) from Raja and
re- names it Pritha’s manufacturing cell. After taking over, she installs an
overhead crane system to handle all the material movements between the
stations. Job pickup and release times by the crane are uniformly distributed
between six and eight seconds. The coordinates of all the locations in the cell
are given in Table L13.7. The crane can travel at the rate of 150 feet/minute
with or without a load. Simulate for 80 hours.
Five locations (Lathe, Mill 1, Mill 2, Exit_Station, and Arrive_Station) are
de- fined for Pritha’s manufacturing cell. The path networks, crane system
resource, and processes and routings are shown in Figures L13.22, L13.23, and
L13.24.

FIGURE L13.22
Path networks for the crane system at Pritha’s manufacturing cell.

TABLE L13.7 Coordinates of All the Locations in Pritha’s

Manufacturing Cell (in feet)

Location X (Rail) Y (Bridge)

Arriving 10 100
Lathe 50 80
Mill 1 90 80
Mill 2 80 20
Exit 0 20
638 Part II Labs

FIGURE L13.23
The crane system resource defined.

FIGURE L13.24
Process and routing tables defined for Pritha’s manufacturing cell.

Select Path Network from the Build menu. From the Type menu, select
Crane. The following four nodes are automatically created when we select the
crane type of path network: Origin, Rail1 End, Rail2 End, and Bridge End.
Define the five nodes N1 through N5 to represent the three machines, the arrival
station, and the exit station. Click on the Interface button in the Path Network
menu and define all the interfaces for these five nodes.
Select Resource from the Build menu. Name the crane resource. Enter 1 in
the Units column (one crane unit). Click on the Specs. button. The Specifications
menu opens up. Select Net1 for the path network. Enter the empty and full speed
of the crane as 150 ft/min. Also, enter Uniform(3 ± 1) seconds as the pickup
and deposit time.

L13.4 Exercises
1. Consider the DumpOnMe facility in Exercise 11 of Section L7.12 with
the following enhancements. Consider the dump trucks as material
handling resources. Assume that 10 loads of coal arrive to the loaders
every hour (randomly; the interarrival time is exponentially
distributed). Create a simulation model, with animation, of this system.
Simulate for 100 days, eight hours each day. Collect statistics to
estimate the loader and scale utilization (percentage of time busy).
About how many trucks are loaded each day on average?
2. For the Widgets-R-Us Manufacturing Inc. example in Section
L12.5.1, consider that a maintenance mechanic (a resource) will be
hired to do the
 Lab 13 Material Handling Concepts 639
repair work on the lathe and the mill. Modify the simulation model and
run it for 2000 hours. What is the utilization of the maintenance
mechanic?
Hint: Define maintenance_mech as a resource. In the Logic field of the
Clock downtimes for Lathe enter the following code:
GET maintenance_mech
DISPLAY "The Lathe is Down for Maintenance"
Wait N(10,2) min
FREE maintenance_mech
Enter similar code for the Mill.
3. At Forge Inc. raw forgings arrive at a circular conveyor system (Figure
L13.25). They await a loader in front of the conveyor belt. The conveyor
delivers the forgings (one foot long) to three machines located one after the
other. A forging is off-loaded to a machine only if the machine is not in use.
Otherwise, the forging moves on to the next machine. If the forging cannot
gain access to any machine in a given pass, it is recirculated. The conveyor
moves at 30 feet per minute. The distance from the loading station to the first
machine is 30 feet. The distance between each machine is 10 feet. The
distance from the last machine back to the loader is 30 feet. Loading and
unloading take
30 seconds each. Forgings arrive to the loader with an exponential
interarrival time and a mean of 10 seconds. The machining times are
also exponentially distributed with a mean of 20 seconds. Simulate the
conveyor system for 200 hours of operation.
a. Collect statistics to estimate the loader and machine utilizations.
b. What is the average time a forging spends in the system?
c. What fraction of forgings cannot gain access to the machines in
the first pass and need to be recirculated?
d. What is the production rate of forgings per hour at Forge Inc.?

FIGURE L13.25 Forging

Layout of Forge
Inc.

Loader

Forge Inc.

Mach 1 Mach 2 Mach 3

640 Part II Labs

4. U.S. Construction Company has one bulldozer, four trucks, and two loaders. The bulldozer
stockpiles material for the loaders. Two piles of material must be stocked prior to the initiation of any
load operation. The time for the bulldozer to stockpile material is Erlang distributed and consists of
the sum of two exponential variables, each with a mean of 4 (this corresponds to an Erlang variable
with a mean of 8 and a variance of 32). In addition to this material, a loader and an unloaded truck
must be available before the loading operation can begin. Loading time is exponentially distributed
with a mean time of 14 minutes for server 1 and 12 minutes for server 2.
After a truck is loaded, it is hauled and then dumped; it must
be returned before it is available for further loading. Hauling time
is normally distributed. When loaded, the average hauling time is
22 minutes. When unloaded, the average time is 18 minutes. In both
cases, the standard deviation is three minutes. Dumping time is
uniformly distributed between two and eight minutes. Following a
loading operation, the loader must rest for five minutes before it is
available to begin loading again. Simulate this system at the U.S.
Construction Co. for a period of one year (2000 working hours) and
analyze it.
5. At Walnut Automotive, machined castings arrive randomly (exponential, mean of six minutes)
from the supplier to be assembled at one of five identical engine assembly stations. A forklift truck
delivers the castings from the shipping dock to the engine assembly department. A loop conveyor
connects the assembly stations.
The forklift truck moves at a velocity of five feet per second. The
dis- tance from the shipping dock to the assembly department is 1000
feet. The conveyor is 5000 feet long and moves at a velocity of five feet
per second.
At each assembly station, no more than three castings can be
waiting for assembly. If a casting arrives at an assembly station and
there is no room for the casting (there are already three castings
waiting), it goes around for another try. The assembly time is normally
distributed with a mean of five minutes and standard deviation of two
minutes. The assembly stations are equally distributed around the belt.
The load/unload station is located halfway between stations 5 and 1.
The forklift truck delivers the castings to the load/unload station. It also
picks up the completed assemblies from the load/unload station and
delivers them back to the shipping dock.
Create a simulation model, with animation, of this system. Run the
simulation model until 1000 engines have been assembled.
a. What is the average throughput time for the engines in the
manufacturing system?
b. What are the utilization figures for the forklift truck and the conveyor?
c. What is the maximum number of engines in the manufacturing system?
d. What are the maximum and average numbers of castings on the
conveyor?
 Lab 13 Material Handling Concepts 641

6. At the Grocery Warehouse, a sorting system consists of one incoming conveyor and three sorting
conveyors, as shown in Figure L13.26. Cases enter the system from the left at a rate of 100 per minute at
random times. The incoming conveyor is 150 feet long. The sorting conveyors are 100 feet long. They
are numbered 1 to 3 from left to right and are 10 feet apart. The incoming conveyor runs at 10 feet per
minute and all the sorting conveyors at 15 feet per minute. All conveyors are accumulating type.
Incoming cases are distributed to the three lanes in the following proportions: Lane 1—30 percent; Lane
2—50 percent; and Lane 3—20 percent.
At the end of each sorting conveyor, a sorter (from a group of
available sorters) scans each case with a bar code scanner, applies a
label, and then places the case on a pallet. One sorter can handle
10 cases per minute on the average (normally distributed with a
standard deviation of 0.5 minute).
When a pallet is full (40 cases), a forklift arrives from the shipping
dock to take it away, unload the cases, and bring back the empty pallet
to an empty pallet queue near the end of the sorting conveyor. A total
of five pallets are in circulation. The data shown in Table 13.8 are
available for the forklift operation.

FIGURE L13.26
The conveyor sorting system at the Grocery Warehouse.

Incoming conveyor

Lane 1 Lane 2 Lane 3

Group of sorters Shipping

dock

TABLE 13.8 Forklift Operation Data Collected

at the Grocery Warehouse

Load time 1 min.

Unload time 3 min.
Travel speed (with and without load) 10 ft./min
Distance from shipping dock 250 ft.
to sorting conveyors
642 Part II Labs

Simulate for one year (250 working days, eight hours each day).
Answer the following questions:
a. How many sorters are required? The objective is to have the
minimum number of sorters but also avoid overflowing the
conveyors.
b. How many forklifts do we need?
c. Report on the sorter utilization, total number of cases shipped, and
the number of cases palletized by lane.
7. Repeat Exercise 6 with a dedicated sorter in each sorting lane. Address all the same issues.
8. Printed circuit boards arrive randomly from the preparation department. The boards are moved in sets
of five by a hand truck to the component assembly department, where the board components are
manually assem- bled. Five identical assembly stations are connected by a loop conveyor.
When boards are placed onto the conveyor, they are directed to the
assembly station with the fewest boards waiting to be processed. After
the components are assembled onto the board, they are set aside and
removed for inspection at the end of the shift. The time between boards
arriving from preparation is exponentially distributed with a mean of
five seconds. The hand truck moves at a velocity of five feet per second
and the conveyor moves at a velocity of two feet per second. The
conveyor is 100 feet long. No more than 20 boards can be placed on the
belt at any one time.
At each assembly station, no more than two boards can be waiting
for assembly. If a board arrives at an assembly station and there is no
room for the board (there are already two boards waiting), the board
goes around the conveyor another time and again tries to enter the
station. The assembly time is normally distributed with a mean of
35 seconds and standard deviation of 8 seconds. The assembly stations
are uniformly distributed around the belt, and boards are placed onto
the belt four feet before the first station. After all five boards are
placed onto the belt, the hand truck waits until five boards have arrived
from the preparation area before returning for another set of boards.
Simulate until 100 boards have been assembled. Report on the
utilization of the hand truck, conveyor, and the five operators. How
many assemblies are produced at each of the five stations? (Adapted
from Hoover and Perry, 1989.)
9. In this example we will model the assembly of circuit boards at four identical assembly stations
located along a closed loop conveyor (100 feet long) that moves at 15 feet per minute. The boards
are
assembled from kits, which are sent in totes from a load/unload station
to the assembly stations via the top loop of the conveyor. Each kit can
be assembled at any one of the four assembly stations. Completed
boards are returned in their totes from the assembly stations back to the
loading /unloading station. The loading/unloading station (located at
the left end of the conveyor) and the four assembly stations (identified
by the letters A through D) are equally spaced along the conveyor, 20
feet
 Lab 13 Material Handling Concepts 643

apart. The time to assemble each kit is N(7,2) minutes. If an assembly

station is busy when a tote arrives, it moves to the next station. Loading
and unloading a tote to/from the conveyor takes N(2,0.2) minutes each.
Since each tote is one foot long, at most 100 totes will fit on the
conveyor at one time. Kits arrive at the load/unload station with an
average interarrival time of five minutes, exponentially distributed.
Simulate for 1000 hours. Answer the following questions:
a. What are the average and maximum numbers of kits in the system?
b. What is the number of assemblies produced and shipped per hour?
c. What are the average and maximum times spent by a kit in the system?
d. What are the utilizations of the four assembly stations?
e. What percentage of kits go around the conveyor more than once
before being assembled?
f. Should we consider installing more assembly stations? Fewer?
10. At the Assam Plywood Mill, logs arrive to the mill in truckloads of 15
each, according to a Poisson process distributed with a mean of 1.3 feet and a standard deviation of 0.3
foot. The logs are precut to a standard length of 8 feet, 16 feet, or 24 feet before their arrival to the mill,
with a distribution by length of 20 percent, 50 percent, and 30 percent
respectively. The arriving logs are unloaded into a bin, from which they
are loaded one at a time onto a conveyor. Sensor devices automatically
control this loading operation so that the next log is kicked onto the
conveyor as soon as sufficient space is available.
The conveyor moves the logs at a speed of 40 feet/minute to a
peeling machine, which debarks the logs and peels them into wood
strips. These strips are dried and glued together in subsequent phases
of the operation to produce plywood. The peeling machine accepts
only logs that are 8 feet long. Therefore, the 16-foot and the 24-foot
logs must be cut into 8-foot sections before arriving to the peeling
machine. This sectioning is done at an automatic cutting station located
32 feet from the start of the conveyor. Whenever the leading end of a
16-foot or 24-foot log reaches the 40-foot mark, the conveyor is
automatically stopped and a vertical cut is made at the 32-foot mark.
This operation requires 0.5 minute, after which the conveyor can be
restarted.
The peeling machine is located beginning at the 48-foot mark
along the conveyor. Whenever the trailing end of a log reaches this
point, the conveyor is stopped and the log is ready to be moved from
the conveyor and loaded into the peeling machine. The loading
operation requires 0.8 minute. At the end of this time the conveyor can
be restarted, and the debarking/peeling operation begins. The peeling
machine processes one 8-foot log at a time at the rate of 20 cubic feet
of log per minute.
Simulate the system for 2400 minutes to determine the throughput
of wood in cubic feet, the utilization of the peeler, and the number of
feet of conveyor occupied.
11.At Orem Casting Company, rough castings arrive for machining according to a normal distribution
with a mean of 60 seconds and a
644 Part II Labs

standard deviation of 15 seconds. An inspector examines the castings

for cracks. Approximately 15 percent of the castings are rejected and
scrapped. Three automatic CNC milling machines are used to machine
the remaining castings. Two loaders (material handlers) load the mills
in a time that is uniformly distributed from 35 to 95 seconds. The
loaders will always try to load a casting into an empty machine before
waiting for a mill to become available. The milling operation takes a
time that varies according to a triangular distribution with a minimum,
mode, and maximum of 50, 100, and 130 seconds. The loaders also
remove the milled castings in a time that is uniformly distributed from
30 to 60 seconds. Simulate the operation of the company until 1000
castings are machined.
a. What is the average number of castings in the shop?
b. What is the maximum number of castings in the shop?
c. How many castings did the inspector reject?
d. What is the utilization of the loaders and the machines?
e. Should we increase the number of loaders? Should we decrease them?
12. At the Washington Logging Company, a logging operation involves
cutting a tree, which takes 25 minutes on the average. This time is normally distributed with a
standard deviation of 10 minutes. The weight of a tree varies uniformly from 1000 to 1500 pounds,
based on the density of fir. The logging company has five trucks with a capacity of 30 tons each.
The truck will not move the trees to the sawmill until at least 15 tons of trees are loaded. The trip to
the sawmill takes
two hours, and the return trip also requires two hours. The truck takes
20 minutes to unload at the sawmill. Develop a simulation model of
this facility. Determine whether the logging operation has sufficient
capability to deliver all the trees cut in one month. The logging
operation runs eight hours each day, 20 days a month.
Embellishments:
a. Include in the model the logging of alder trees in addition to fir
trees. The alder trees are also cut in 25 minutes and segregated at the
cutting site. The alder trees have weights ranging from 1500 to 2000
pounds, uniformly distributed. The trucks transport the alder and fir
trees in separate trips.
b. Vary the minimum requirement of trees that are loaded on a truck
from 15 to 20 to 25 tons to determine the effect on throughput of this
decision variable.
13. Rancho Cucamonga Coil Company is considering implementing a
crane system as shown in Figure L13.27. Two cranes operate on separate tracks. Crane 1 serves only
input station A and is used to transport steel cables to either output station C or D. Crane 2 transports
copper cables from input station B to either output station D or E. The distances between the input
and output stations are shown in Table 13.9.
The arrival rate of steel cables to input station A is four rolls per
hour (exponential), with 50 percent of the rolls sent to output station C
 Lab 13 Material Handling Concepts 645

FIGURE L13.27
Steel coils Copper coils
Crane system at the Input Input
Rancho station A station B
Cucamonga Coil
Company.

Crane 1

Crane 2

Output
station C
Output Output
station D station E

TABLE 13.9 Distances Between Stations at the Rancho

Cucamonga Coil Company

From To Distance (feet)

Input A Output C 100

Input A Output D 150
Input A Input B 300
Input B Output E 100

and 50 percent to output station D. The arrival rate of copper cables to

input station B is two rolls per hour (exponential), with 40 percent of
the rolls sent to output station D and 60 percent to output station E. The
travel speeds of both the cranes are 20 feet/minute without load and
10 feet/minute with load. The pickup and drop-off times are two min-
utes each. Simulate the crane system and collect statistics on the
throughput from each input station to each output station.
Embellishments:
a. What will be the impact on throughput if the cranes run on a single
track with output station D being on the common path of both the
cranes? Model the interference in reaching output station D.
b. Establish a cost structure to evaluate and compare the single track
(with interference) versus the separate track crane systems.
c. Evaluate the impact of giving priority to jobs that do not require the
common track—that is, to jobs destined for output stations C and E.

Reference
S. V. Hoover and R. F. Perry, Simulation: A Problem Solving Approach, Addison Wesley,
1989, pp. B93–B95.
Harrell−Ghosh−Bo II. 14. Additional © The
wden: Simulation Labs Modeling McGraw−Hill
Using ProModel, Concepts Companies,
Second Edition

L A B

14 ADDITIONAL MODELING
CONCEPTS

All things good to know are difficult to learn.

—Greek Proverb

In this lab we discuss some of the advanced but very useful concepts in
ProModel. In Section L14.1 we model a situation where customers balk (leave)
when there is congestion in the system. In Section L14.2 we introduce the
concepts of macros and runtime interfaces. In Section L14.3 we show how to
generate multiple sce- narios for the same model. In Section L14.4 we discuss
how to run multiple repli- cations. In Section L14.5 we show how to set up and
import data from external files. In Section L14.6 we discuss arrays of data.
Table functions are introduced in Section L14.7. Subroutines are explained with
examples in Section L14.8. Sec- tion L14.9 introduces the concept of arrival
cycles. Section L14.10 shows the use of user distributions. Section L14.11
introduces the concepts and use of random number streams.

L14.1 Balking of Customers

Balking occurs when a customer looks at the size of a queue and decides to
leave instead of entering the queue because it is too long. Balking is modeled by
limit- ing the capacity or the number of entities that are allowed in the
queue. Any customer that arrives when the queue is full must go away. This
means loss of customers, loss of business, and lost opportunities.

Problem Statement
All American Car Wash is a five-stage operation that takes 2 ± 1 minutes
for each stage of wash (Figure L14.1). The queue for the car wash facility can
hold up to three cars. The cars move through the washing stages in order, one car
not being

647
648 Part II Labs

FIGURE L14.1
Locations and layout of All American Car Wash.

FIGURE L14.2
Customer arrivals at All American Car Wash.

able to move until the car ahead of it moves. Cars arrive every 2.5 ± 2 minutes
for a wash. If a car cannot get into the car wash facility, it drives across the
street to Better Car Wash. Simulate for 100 hours.
a. How many customers does All American Car Wash lose to
its competition per hour (balking rate per hour)?
b. How many cars are served per hour?
c. What is the average time spent by a customer at the car wash facility?
The customer arrivals and processes/routings are defined as shown in
Fig- ures L14.2 and L14.3. The simulation run hours are set at 100. The total
number of cars that balked and went away to the competition across the street
is 104 in 100 hours (Figure L14.4). That is about 10.4 cars per hour. The total
number of customers served is 2377 in 100 hours (Figure L14.5). That is about
23.77 cars per hour. We can also see that, on average, the customers spent 14
minutes in the car wash facility.
 Lab 14 Additional Modeling Concepts 649

FIGURE L14.3
Process and routing tables at All American Car Wash.

FIGURE L14.4
Cars that balked.

FIGURE L14.5
Customers served.

L14.2 Macros and Runtime Interface

If text, a set of statements, or a block of code is used many times in the model, it
is convenient to substitute a macro and use the macro as many times as needed.
Macros are created and edited in the following manner:
1. Select More Elements from the Build menu.
2. Select Macros.
650 Part II Labs

The runtime interface (RTI) is a useful feature through which the user can
in- teract with and supply parameters to the model without having to rewrite it.
Every time the simulation is run, the RTI allows the user to change model
parameters defined in the RTI. The RTI provides a user-friendly menu to
change only the macros that the modeler wants the user to change. An RTI is a
custom inter- face defined by a modeler that allows others to modify the
model or conduct multiple-scenario experiments without altering the actual
model data. All changes are saved along with the model so they are preserved
from run to run. RTI para- meters are based on macros, so they may be used to
change any model parameter that can be defined using a macro (that is, any
field that allows an expression or any logic definition).
An RTI is created and used in the following manner:
1. Select Macros from the Build menu and type in a macro ID.
2. Click the RTI button and choose Define from the submenu. This opens
the RTI Definition dialog box.
3. Enter the Parameter Name that you want the macro to represent.
4. Enter an optional Prompt to appear for editing this model parameter.
5. Select the parameter type, either Unrestricted Text or Numeric Range.
6. For numeric parameters:
a. Enter the lower value in the From box.
b. Enter the upper value in the To box.
7. Click OK.
8. Enter the default text or numeric value in the Macro Text field.
9. Use the macro ID in the model to refer to the runtime parameter (such
as operation time or resource usage time) in the model.
10. Before running the model, use the Model Parameters dialog box or
the Scenarios dialog box to edit the RTI parameter.

Problem Statement
Widgets-R-Us Inc. receives various kinds of widget orders. Raw castings of
wid- gets arrive in batches of one every five minutes. Some widgets go from
the raw material store to the mill, and then on to the grinder. Other widgets go
directly to the grinder. After grinding, all widgets go to degrease for cleaning.
Finally, all widgets are sent to the finished parts store. The milling and
grinding times vary depending on the widget design. However, the degrease
time is seven minutes per widget. The layout of Widgets-R-Us is shown in
Figure L14.6.
Define a runtime interface to allow the user to change the milling and grind-
ing times every time the simulation is run. Also, allow the user to change the
total quantity of widgets being processed. Track the work-in-process inventory
(WIP) of widgets. In addition, define another variable to track the production
(PROD_QTY) of finished widgets.
The macros are defined as shown in Figure L14.7. The runtime interface for
the milling time is shown in Figure L14.8. Figure L14.9 shows the use of the
parameters Mill_Time and Grind_Time in the process and routing tables. To
 Lab 14 Additional Modeling Concepts 651

FIGURE L14.6
Layout of
Widgets-R-Us.

FIGURE L14.7
Macros created for Widgets-R-Us simulation model.

FIGURE L14.8
The runtime interface
defined for the
milling operation.
652 Part II Labs

FIGURE L14.9
The process and routing tables showing the Mill_Time and Grind_Time parameters.

FIGURE L14.10 FIGURE L14.11

Model Parameters in The Model Parameters dialog box.
the Simulation menu.

FIGURE L14.12
The
Grind_Time_Halfwidth
parameter dialog box.

view or change any of the model parameters, select Model Parameters from
the Simulation menu (Figure L14.10). The model parameters dialog box is
shown in Figure L14.11. To change the Grind_Time_Halfwidth, first select it
from the model parameters list, and then press the Change button. The
Grind_Time_Halfwidth dialog box is shown in Figure L14.12.
 Lab 14 Additional Modeling Concepts 653

L14.3 Generating Scenarios

When a modeler alters one or more input parameters or elements of the model,
he or she creates model scenarios. For example, running a model first with 5
units of pallets and then with 10 units to test the effect of increased resource
availability is the same thing as creating two scenarios.
A model builder has the option of defining multiple scenarios for a model
using the runtime interface. Using scenarios allows the model user to alter
various model parameters to run a series of “what-if ” analyses without changing
the model directly. This technique makes it easy for analysts who have no interest
in dealing with the nuts and bolts of a model to make changes safely and
conveniently to the model to learn what would happen under a variety of
circumstances.
The Scenarios dialog box is accessed from the Simulation menu (Fig-
ure L14.13). Scenarios are saved with the model for future use. They are created
using the Scenarios dialog box (Figure L14.14).
For the Shipping Boxes Unlimited example in Lab 7, Section L7.7.2,
gener- ate two scenarios (Figure L14.14):
Scenario 1: Five pallets in circulation in the system.
Scenario 2: Ten pallets in circulation in the system.
Define a model parameter for the number of pallets in the system
(no_of_pal- lets) in the runtime interface. The RTI dialog box is obtained from
the Build/More Elements/Macros menu. Edit the scenarios (Figure L14.15) and
change the para- meter no_of_pallets to the values of 5 and 10, respectively, for
the two scenarios. In the Arrivals menu, change the occurrences for Pallet to
the parameter name no_of_pallets. This parameter will take on the values of 5
and 10 in scenarios 1 and 2, respectively (Figure L14.16).
To run the scenarios, click on the Run Scenarios button in the Scenarios dia-
log box. Both scenarios will be run in a sequential manner, and reports for both
scenarios will be created (Figure L14.17).

FIGURE L14.13 FIGURE L14.14

The Scenarios Scenarios defined for Shipping Boxes Unlimited in Section L7.7.2.
menu.
654 Part II Labs

FIGURE L14.15
Editing the scenario
parameter.

FIGURE L14.16
Arrivals table for Shipping Boxes Unlimited in Section L7.7.2.

FIGURE L14.17
Reports created for both the scenarios.
 Lab 14 Additional Modeling Concepts 655

L14.4 External Files

External files are used to read data directly into the simulation model or to write
output data from the simulation model. External files are also used to store
and access process sheets, arrival schedules, shift schedules, bills of material,
deliv- ery schedules, and so forth. All external files used with a model must
be listed in the External Files Editor and are accessed from the Build menu.
All external files must be generally in the .WK1 format only and can be of
the following six types.

General Read File. These files contain numeric values read into a simulation
model using a READ statement. A space, comma, or end of line can separate
the data values. Any nonnumeric data are skipped automatically. The syntax of
the READ statement is as follows:
READ <file ID>, <variable name>
If the same file is to be read more than once in the model, it may be necessary to
reset the file between each reading. This can be achieved by adding an arbitrary
end-of-file marker 99999 and the following two lines of code:
Read MydataFile1, Value1
If Value1D99999 Then Reset MydataFile1
The data stored in a general read file must be in ASCII format. Most
spreadsheet programs (Lotus 1-2-3, Excel, and others) can convert spreadsheets
to ASCII files (MydataFile1.TXT).

General Write. These files are used to write text strings and numeric values
using the WRITE and WRITELINE statements. Text strings are enclosed in
quotes when written to the file, with commas automatically appended to strings.
This en- ables the files to be read into spreadsheet programs like Excel or Lotus
1-2-3 for viewing. Write files can also be written using the XWRITE statement,
which gives the modeler full control over the output and formatting. If you
write to the same file more than once, either during multiple replications or
within a single replica- tion, the new data are appended to the previous data.
The WRITE statement writes to a general write file. The next item is written
to the file immediately after the previous item. Any file that is written to with
the WRITE statement becomes an ASCII text file and ProModel attaches an end-
of-file marker automatically when it closes the file.
WRITE <file ID>, <string or numeric expression>
The WRITELINE statement writes information to a general write file and
starts a new line. It always appends to the file unless you have RESET the file.
Any file that is written to with the WRITELINE statement becomes an ASCII text
file, and ProModel attaches an end-of-file marker automatically when it closes
the file.
The syntax of the WRITE, WRITELINE, and the XWRITE statements is as follows:
WRITE MyReport, “Customer Service Completed At:”
WRITELINE MyReport, CLOCK(min)
656 Part II Labs

The XWRITE statement allows the user to write in any format he or she chooses.
XWRITE <file ID>, <string or numeric expression>
XWRITE MyReport2, “Customer Service Completed At:” $FORMAT(Var1,5,2)

Entity Location. An entity–location file contains numeric expressions listed by

entity and location names. Entity names should appear across the top row, begin-
ning in column 2, while location names should be entered down the first column
beginning in row 2. A numeric expression for each entity–location combination
is entered in the cell where the names intersect. These files are always in
.WK1 format. Both Excel and Lotus 1-2-3 files can be saved in .WK1
format. When saving an entity–location file, make sure to choose Save As
from the File menu (Excel or Lotus 1-2-3) and change the file format to
.WK1. Other .TXT files also can be opened in Excel or Lotus 1-2-3 and, after
minor editing, saved in .WK1 format.

Arrival. An arrivals file is a spreadsheet file (.WK1 format only) containing ar-
rival information normally specified in the Arrival Editor. One or more arrival
files may be defined and referenced in the External Files Editor. Arrival files are
automatically read in following the reading of the Arrival Editor data. The
column entries must be as in Table L14.1.

Shift. A shift file record is automatically created in the External Files Editor
when a shift is assigned to a location or resource. If shifts have been assigned,
the name(s) of the shift file(s) will be created automatically in the External Files
Editor. Do not attempt to create a shift file record in the External Files Editor
yourself.

.DLL. A .DLL file is needed when using external subroutines through the
XSUB() function.

Problem Statement
At the Pomona Castings, Inc., castings arrive for processing at the rate of 12
per hour (average interarrival time assumed to be five minutes). Seventy
percent

Table L14.1 Entries in an External Arrivals File

Column Data

A Entity name
B Location name
C Quantity per arrival
D Time of first arrival
E Number of arrivals
F Frequency of arrivals
G Attribute assignments
 Lab 14 Additional Modeling Concepts 657

FIGURE L14.18
An external
entity-location
file in .WK1
format.

FIGURE L14.19
File ID and file name created for the external file.

FIGURE L14.20
The process table referring to the file ID of the external file.

of the castings are processed as casting type A, while the rest are processed as
casting type B.
For Pomona Castings, Inc., create an entity–location file named P14_5
.WK1 to store the process routing and process time information (Figure
L14.18). In the simulation model, read from this external file to obtain all the
process information. Build a simulation model and run it for 100 hours. Keep
track of the work-in-process inventory and the production quantity.
Choose Build/More Elements/External Files. Define the ID as SvcTms. The
Type of file is Entity Location. The file name (and the correct path) is also
provided (Figure L14.19). In the Process definition, use the file ID (Figure
L14.20) instead of the actual process time—for example, WAIT SvcTms().
Change the file path to point to the appropriate directory and drive where the
external file is located. A snapshot of the simulation model is shown in Figure
L14.21.
658 Part II Labs

FIGURE L14.21
A snapshot of the
simulation model for
Pomona Castings, Inc.

L14.5 Arrays
An array is a collection of values that are related in some way such as a list of
test scores, a collection of measurements from some experiment, or a sales tax
table. An array is a structured way of representing such data.
An array can have one or more dimensions. A two-dimensional array is
use- ful when the data can be arranged in rows and columns. Similarly, a
three- dimensional array is appropriate when the data can be arranged in rows,
columns, and ranks. When several characteristics are associated with the data,
still higher dimensions may be appropriate, with each dimension
corresponding to one of these characteristics.
Each cell in an array works much like a variable. A reference to a cell in
an array can be used anywhere a variable can be used. Cells in arrays are usually
ini- tialized to zero, although initializing cells to some other value can be done
in the initialization logic. A WHILE-DO loop can be used for initializing array cell
values.
Suppose that electroplating bath temperatures are recorded four times a day
at each of three locations in the tank. These temperature readings can be
arranged in an array having four rows and three columns (Table L14.2).
These 12 data items can be conveniently stored in a two-dimensional array
named Temp[4,3] with four rows and three columns.
An external Excel file (BathTemperature.xls) contains these bath
temperature data (Figure L14.22). The information from this file can be
imported into an array in ProModel (Figure L14.23) using the Array Editor.
When you import data from an external Excel spreadsheet into an array,
ProModel loads the data from left to right, top to bottom. Although there is no
limit to the quantity of values you may use, ProModel supports only two-
dimensional arrays. Figure L14.24 shows the Import File dialog in the Array
Editor.
 Lab 14 Additional Modeling Concepts 659

FIGURE L14.22
An external file
containing
bath
temperatures.

FIGURE L14.23
The Array Editor in
ProModel.

FIGURE L14.24
The Import File dialog
in the Array Editor.

TABLE L14.2 Electroplating Bath Temperatures

Time Location 1 Location 2 Location 3

1 75.5 78.7 72.0

2 78.8 78.9 74.5
3 80.4 79.4 76.3
4 78.5 79.1 75.8

Value of an array can also be exported to an Excel spreadsheet (*.xls) during

the termination logic. Microsoft Excel must have been installed in your
computer in order to export data from an array at runtime. Array exporting can
be turned off in the Simulations Options dialog.
660 Part II Labs

Problem Statement
Table L14.3 shows the status of orders at the beginning of the month at Joe’s
Job- shop. In his shop, Joe has three machines through which three types of
jobs are routed. All jobs go to all machines, but with different routings. The
data for job routings and processing times (exponential) are given in Table
L14.4. The processing times are given in minutes. Use a one-dimensional array
to hold the in- formation on the order status. Simulate and find out how long it
will take for Joe to finish all his pending orders.
The layout, locations, and arrival of jobs at Joe’s Jobshop are shown in
Figures L14.25, L14.26, and L14.27. The pending order array is shown in

FIGURE L14.25
Layout of Joe’s Jobshop.

TABLE L14.3 Data for Pending TABLE L14.4 Process Routings and Average
Orders Process Times
at Joe’s Jobshop

Jobs Number of Pending Jobs Machines Process Times

Orders
A 2–3–1 45–60–75
A 25
B 1–2–3 70–70–50
B 27
C 3–1–2 50–60–60
C 17
 Lab 14 Additional Modeling Concepts 661

Figure L14.28. The initialization logic is shown in Figure L14.29. The processes
and routings are shown in Figure L14.30.
It took about 73 hours to complete all the pending work orders. At eight
hours per day, it took Joe a little over nine days to complete the backlog of
orders.

FIGURE L14.26
Locations at Joe’s Jobshop.

FIGURE L14.27
Arrival of jobs at Joe’s Jobshop.

FIGURE L14.28
Pending order array for Joe’s Jobshop.
662 Part II Labs

FIGURE L14.29
Initialization logic in the General Information menu.

FIGURE L14.30
Process and routing tables for Joe’s Jobshop.
 Lab 14 Additional Modeling Concepts 663

L14.6 Table Functions

Table functions are a useful way to specify and set up relationships between
independent and dependent variables. A table function editor is provided in
Pro- Model to build tables. This feature is especially useful when building
empirical distributions or functions into a model. Table functions are defined by
the user and return a dependent value based on the independent value passed as
the function ar- gument. Independent values are entered in ascending order. The
dependent value is calculated by linear interpolation. For a linear function, only
two endpoints are needed. For a nonlinear function, more than two reference
values are specified.

Problem Statement
Customers arrive at the Save Here Grocery store with a mean time between ar-
rival (exponential) that is a function of the time of the day, (the number of hours
elapsed since the store opening), as shown in Table L14.5. The grocery store
con- sists of two aisles and a cashier. Once inside the store, customers may
choose to shop in one, two, or none of the aisles. The probability of shopping
aisle one is 0.75, and for aisle two it is 0.5. The number of items selected in
each aisle is de- scribed by a normal distribution with a mean of 15 and a
standard deviation of 5. The time these shoppers require to select an item is five
minutes. When all desired items have been selected, customers queue up at the
cashier to pay for them. The time to check out is a uniformly distributed random
variable that depends on the
number of items purchased. The checkout time per item is 0.6 ± 0.5
minutes (uniformly distributed). Simulate for 10 days (16 hours/day).
The locations, the arrival of entities, the processes and routings, and the lay-
out of the grocery store are shown in Figures L14.31, L14.32, L14.33, and
L14.34, respectively. The arrival frequency is derived from the table function
arrival time(HR):
e(arrival_time(CLOCK(HR) – 16*TRUNC(CLOCK(HR)/16))) min
The table function arrival_time is shown in Figure L14.35.

TABLE L14.5 Time between Arrivals at Save Here Grocery

Time of Day Time between Arrivals (minutes)

0 50
2 40
4 25
6 20
8 20
10 20
12 25
14 30
16 30
664 Part II Labs

FIGURE L14.31
Locations in Save Here Grocery.

FIGURE L14.32
Arrivals at Save Here Grocery.

FIGURE L14.33
Process and routing tables for Save Here Grocery.
 Lab 14 Additional Modeling Concepts 665

FIGURE L14.34
The layout of Save Here Grocery.

FIGURE L14.35
The Table Functions
dialog box.
666 Part II Labs

L14.7 Subroutines
A subroutine is a separate section of code intended to accomplish a specific task.
It is a user-defined command that can be called upon to perform a block of logic
and optionally return a value. Subroutines may have parameters or local
variables (local to the subroutine) that take on the values of arguments passed
to the sub- routine. There are three variations for the use of subroutines in
ProModel:
1. A subroutine is called by its name from the main block of code.
2. A subroutine is processed independently of the calling logic so that
the calling logic continues without waiting for the subroutine to
finish. An ACTIVATE statement followed by the name of the subroutine
is needed.
3. Subroutines written in an external programming language can be called
using the XSUB() function.
Subroutines are defined in the Subroutines Editor in the More Elements section
of the Build menu. For more information on ProModel subroutines, please refer
to the ProModel Users Guide.

Problem Statement
At California Gears, gear blanks are routed from a fabrication center to one of
three manual inspection stations. The operation logic for the gears is identical at
each station except for the processing times, which are a function of the individ-
ual inspectors. Each gear is assigned two attributes during fabrication. The first
at- tribute, OuterDia, is the dimension of the outer diameter of the gear. The
second attribute, InnerDia, is the dimension of the inner diameter of the gear.
During the fabrication process, the outer and inner diameters are machined
with an average
of 4.015 ± 0.01 and 2.015 ± 0.01 (uniformly distributed). These dimensions
are tested at the inspection stations and the values entered into a text file
(Quality.doc)
for quality tracking. After inspection, gears are routed to a shipping location if
they pass inspection, or to a scrap location if they fail inspection.
Gear blanks arrive at the rate of 12 per hour (interarrival time exponentially
distributed with a mean of five minutes). The fabrication and inspection times
(normal) are shown in Table L14.6. The specification limits for the outer and
inner

TABLE L14.6 Fabrication and Inspection Times at California Gears

Mean Standard Deviation

Fabrication time 3.2 0.1

Inspector 1 4 0.3
Inspector 2 5 0.2
Inspector 3 4 0.1
 Lab 14 Additional Modeling Concepts 667

diameters are given in Table L14.7. The layout, locations, entities, and arrival of
raw material are shown in Figures L14.36, L14.37, L14.38, and L14.39 respec-
tively. The subroutine defining routing logic is shown in Figure L14.40. Fig-
ure L14.41 shows the processes and routing logic. The external file in which
quality data will be written is defined in Figure L14.42. Figure L14.43 shows a
portion of the actual gear rejection report.

FIGURE L14.36
Layout of California
Gears.

TABLE L14.7 The Specification Limits for Gears

Lower Specification Upper

Specification Limit
Limit

Outer diameter 4.01" 4.02"

Inner diameter 2.01" 2.02"
668 Part II Labs

FIGURE L14.37
Locations at
California Gears.

FIGURE L14.38
Entities at California
Gears.

FIGURE L14.39
Arrival of raw material at California Gears.

FIGURE L14.40
Subroutine defining routing logic.
 Lab 14 Additional Modeling Concepts 669

FIGURE L14.41
Process and routing tables for California Gears.

FIGURE L14.42
External file for
California Gears.

FIGURE L14.43
Gear rejection report (partial) for California Gears.
670 Part II Labs

L14.8 Arrival Cycles

Sometimes the arrival of customers to a system follows a definite cyclic pattern.
Examples are arrival of flights to an airport, arrival of buses to a bus stand or
depot, traffic on the freeway, and customers coming to a takeout restaurant. Ar-
rival cycles are defined in the Arrival Cycles edit table (Figure L14.44), which
is part of More Elements in the Build menu.
Arrivals can be expressed either as a percentage or in quantity. The arrival
percentage or quantity can be in either a cumulative or a noncumulative format.
The time is always specified in a cumulative format. Once the arrival cycles are
defined, they can be assigned to an arrivals record in the Arrivals edit table.

Problem Statement
At the Newport Beach Burger stand, there are three peak periods of customer
ar- rivals: breakfast, lunch, and dinner (Table L14.8). The customer arrivals taper
out

FIGURE L14.44
Arrival Cycles edit
menu.

TABLE L14.8 Customer Arrival Pattern at Newport Beach Burger

From To Percent

6:00 A.M. 6:30 A.M. 5

6:30 A.M. 8:00 A.M. 20
8:00 A.M. 11:00 A.M. 5
11:00 A.M. 1:00 P.M. 35
1:00 P.M. 5:00 P.M. 10
5:00 P.M. 7:00 P.M. 20
7:00 P.M. 9:00 P.M. 5
 Lab 14 Additional Modeling Concepts 671

before and after these peak periods. The same cycle of arrivals repeats every
day. A total of 100 customers visit the store on an average day (normal
distribution with a standard deviation of five). Upon arrival, the customers take
Uniform(5 ± 2) min- utes to order and receive food and Normal(15, 3) minutes
to eat, finish business discussions, gossip, read a newspaper, and so on. The
restaurant currently has only one employee (who takes the order, prepares the
food, serves, and takes the
money). Simulate for 100 days.
The locations, processes and routings, arrivals, and arrival quantities are
shown in Figures L14.45, L14.46, L14.47, and L14.48, respectively. The arrival
cycles and the probability density function of arrivals at Newport Beach Burger
are shown in Figure L14.49. A snapshot of the simulation model is shown in
Figure L14.50.

FIGURE L14.45
Locations at Newport Beach Burger.

FIGURE L14.46
Process and routing tables at Newport Beach Burger.

FIGURE L14.47
Arrivals at Newport Beach Burger.
672 Part II Labs

FIGURE L14.48 FIGURE L14.49

Arrival quantity defined for the Arrival cycles and probability density function of arrivals
Arrivals table. defined at Newport Beach Burger.

FIGURE L14.50
A snapshot of Newport Beach Burger.
 Lab 14 Additional Modeling Concepts 673

L14.9 User Distributions

Sometimes it becomes necessary to use the data collected by the user directly in-
stead of using one of the built-in distributions. User distribution tables can be ac-
cessed from Build/More Elements (Figure L14.51). These user-defined or empir-
ical distributions can be either discrete or continuous. The user distributions can
be expressed in either a cumulative (cumulative density function or cdf ) or a
non- cumulative (probability density function or pdf) fashion.

Problem Statement
The customers at the Newport Beach Burger stand arrive in group sizes of one,
two, three, or four with the probabilities shown in Table L14.9. The mean time
be- tween arrivals is 15 minutes (exponential). Ordering times have the
probabilities

FIGURE L14.51
User Distributions
menu.

TABLE L14.9 Probability Density Function

of Customer Group Sizes

Group Size Probability

1 .4
2 .3
3 .1
4 .2
674 Part II Labs

shown in Table L14.10. The probability density function of eating times are
shown in Table L14.11. Simulate for 100 hours.
The user distributions, group size distribution, order time distribution, and
eating time distribution are defined as shown in Figures L14.52, L14.53, L14.54,
and L14.55, respectively.

FIGURE L14.52
User distributions defined for Newport Beach Burger.

FIGURE L14.53 FIGURE L14.54

Group size distribution for Newport Beach Burger. Order time distribution for Newport Beach Burger.

FIGURE L14.55
Eating time
distribution for
Newport
Beach Burger.

TABLE L14.10 Probability Density Function TABLE L14.11 Probability Density Function
of Ordering Times of Eating Times

Ordering Time Eating Time Probability

Probability P(0 <= X < 10) .0

P(10 <= X < 12) .3
P(0 <= X < 3) .0 P(12 <= X < 14) .35
P(3 <= X < 4) .35 P(14 <= X < 16) .35
P(4 <= X < 5) .35 P(16 <= X ) .0
P(5 <= X < 8) .3
P(8 <= X) .0
 Lab 14 Additional Modeling Concepts 675

L14.10 Random Number Streams

The sequence of random numbers generated by a given seed is referred to as a
random number stream. A random number stream is a sequence of an indepen-
dently cycling series of random numbers. The number of distinct values
generated before the stream repeats is called the stream’s cycle length. Ideally,
the cycle length should be long enough so that values do not repeat within the
simulation. For a more thorough discussion on generating random numbers,
please refer to Section 3.4.1 in Chapter 3.
In ProModel, up to 100 streams may be used in the model. A random
number stream always generates numbers between 0 and 1, which are then used
to sample from various hypothetical distributions by a method called inverse
transforma- tion, which is discussed in Section 3.4.2 in Chapter 3.
By default, all streams use a seed value of 1. Also, the random number
streams are not reset between each replication if multiple replications are run.
The Streams editor is used to assign a different seed to any stream and also to
reset the seed value to the initial seed value between replications.

Problem Statement
Salt Lake Machine Shop has two machines: Mach A and Mach B. A
maintenance mechanic, mechanic Dan, is hired for preventive maintenance on
these machines. The mean time between preventive maintenance is 120 ± 10
minutes. Both ma- chines are shut down at exactly the same time. The actual
maintenance takes
10 ± 5 minutes. Jobs arrive at the rate of 7.5 per hour (exponential mean time
be- tween arrival). Jobs go to either Mach A or Mach B selected on a random
basis.
Simulate for 100 hours.
The layout, resources, path network of the mechanic, and process and
routing tables are shown in Figures L14.56, L14.57, L14.58, and L14.59.
The arrival of customers is defined by an exponential interarrival time with a
mean of three

FIGURE L14.56
Layout of Salt Lake
Machine Shop.
676 Part II Labs

minutes. The downtimes and the definition of random number streams are
shown in Figures L14.60 and L14.61, respectively. Note that the same seed
value (Fig- ure L14.61) is used in both the random number streams to ensure
that both ma- chines are shut down at exactly the same time.

FIGURE L14.57
Resources at Salt Lake Machine Shop.

FIGURE L14.58
Path network of the mechanic at Salt Lake Machine Shop.

FIGURE L14.59
Process and routing tables at Salt Lake Machine Shop.

FIGURE L14.60
Clock downtimes for machines A and B at Salt Lake Machine Shop.
 Lab 14 Additional Modeling Concepts 677

FIGURE L14.61
Definition of
random number
streams.

L14.11 Exercises
1. Differentiate between the following:
a. Table functions versus arrays.
b. Subroutines versus macros.
c. Arrivals versus arrival cycles.
d. Scenarios versus replications.
e. Scenarios versus views.
f. Built-in distribution versus user distribution.
2. What are some of the advantages of using an external file in ProModel?
3. HiTek Molding, a small mold shop, produces three types of parts: Jobs
A, B, and C. The ratio of each part and the processing times
(minimum, mean, and maximum of a triangular distribution) are as
follows:

Job Type Ratio Minimum Mean Maximum

Job A 0.4 30 sec. 60 sec. 90 sec.

Job B 0.5 20 sec. 30 sec. 40 sec.
Job C 0.1 90 sec. 120 sec. 200 sec.

Create an array (mold-time) and an external file (L14_11_3.xls) for the

molding processing time data.
Orders for jobs arrive at an average rate of four every minute
(interarrival time exponentially distributed). Each machine can mold
any type of
job, one job at a time. Develop scenarios with one, two, three, or four
molding machines to compare with each other. Simulate each scenario
for 100 hours and compare them with each other. What would be the
appropriate criteria for such a comparison?
4. For the Southern California Airline (Exercise 4, Section L7.12), use an external file to read
interarrival and service time distribution data directly into the simulation model.
5. For the Bengal Toy Company (Exercise 9, Section L7.12), use an external file to store all the data.
Read this file directly into the simulation model.
6. In Exercise 1, of Section L12.14, use an array to store the process time information for the five pieces of
equipment. Read this information directly into the simulation model.
 678 Part II Labs

7. For the Detroit ToolNDie plant (Exercise 14, Section L7.12), generate the following three scenarios:
a. Scenario I: One tool crib clerk.
b. Scenario II: Two tool crib clerks.
c. Scenario III: Three tool crib clerks.
Run 10 replications of each scenario. Analyze and compare the results.
How many clerks would you recommend hiring?
8. In United Electronics (Exercise 7 in Section L7.12), use an array to store the process time
information. Read this information from an external Excel spreadsheet into the simulation model.
9. For Salt Lake City Electronics (Exercise 10 in Section L7.12), use external files (arrivals and
entity_location files) to store all the data. Read this file directly into the simulation model.
10. For Ghosh’s Gear Shop example in Section L13.2.1, create macros
and suitable runtime interfaces for the following processing time parameters:

Average machining time half width of machining time

Average washing time half width of washing time
Average inspection time std. dev. of inspection time

11.West Coast Federal a drive-in bank, has one teller and space for five waiting cars. If a customer
arrives when the line is full, he or she drives around the block and tries again. Time between arrivals is
exponential with mean of 10 minutes. Time to drive around the block is normally distributed with
mean 3 min and standard deviation 0.6 min. Service
time is uniform at 9 ± 3 minutes. Build a simulation model and run it
for 2000 hours (approximately one year of operation).
a. Collect statistics on time in queue, time in system, teller utilization, number of customers served
per hour, and number of customers balked per hour.
b. Modify the model to allow two cars to wait after they are served to get onto the street. Waiting
time for traffic is exponential with a mean of four minutes. Collect all the statistics from part a.
c. Modify the model to reflect balking customers leaving the system and not driving around the block.
Collect all the same statistics. How many customers are lost per hour?
d. The bank’s operating hours are 9 A.M. till 3 P.M. The drive-in facility is closed at 2:30 P.M.
Customers remaining in line are served until the last customer has left the bank. Modify the model
to reflect these changes. Run for 200 days of operation.
12. San Dimas Mutual Bank has two drive-in ATM kiosks in tandem but
only one access lane (Figure L14.62). In addition, there is one indoor
 Lab 14 Additional Modeling Concepts 679

FIGURE L14.62
Layout of the San
Dimas Mutual San Dimas Mutual Bank
Bank.
Walk-

Indoor ATM

Parking Lot

Drive-
ATM 1 ATM 2

ATM for customers who decide to park (30 percent of all customers)
and walk in. Customers arrive at intervals that are spaced on average
five minutes apart (exponentially distributed). ATM customers are of
three types—save money (deposit cash or check), spend money
(withdraw cash), or count money (check balance). If both ATMs are
free when a customer arrives, the customer will use the “downstream”
ATM 2. A car at ATM 1 cannot pass a car at the ATM in front of it even
if it has finished.

Type of Customer Fraction of All Customers Time at ATM

Save Money 1/3 Normal(7,2) minutes

Spend Money 1/2 Normal(5,2) minutes
Count Money 1/6 Normal(3,1) minutes

Create a simulation model of San Dimas Mutual Bank. The ATM

kiosks operate 24/7. Run the model until 2000 cars have been served.
Analyze the following:
a. The average and maximum queue size.
b. The average and maximum time spent by a customer waiting in queue.
c. The average and maximum time in the system.
d. Utilization of the three ATMs.
e. Number of customers served each hour.
Embellishment: Modify the model so that if four or more cars are in
the ATM drive-in system at the bank when the customer arrives, the
customer decides to park and walk in to use the ATM in the lobby. The
680 Part II Labs

time at this ATM is same as the drive-in ATMs. Run the model until
2000 cars have been served. Analyze the following:
a. Average and maximum number of customers deciding to park and
walk in. How big should the parking lot be?
b. The average and maximum drive-in queue size.
c. The average and maximum time spent by a customer waiting in the
drive-in queue.
d. The average and maximum walk-in queue size.
e. The average and maximum time spent by a customer waiting in the
walk-in queue.
f. The average and maximum time in the system.
g. Utilization of the three ATMs.
h. Number of customers served each hour.
Harrell−Ghosh−Bo Appendi A. Common © The
wden: Simulation xes Continuous and McGraw−Hill
Using ProModel, Discrete Companies,
Second Edition

APPENDIX A COMMON CONTINUOUS AND DISCRETE DISTRIBUTIONS*

A.1 Continuous Distributions

Beta Distribution (min, max, p, q)
1 (x − min)p−1 (max − x)q −1
f (x) =
B( p, q) (max min)p+q −1
−
min ≤ x ≤ max
min = minimum value of x
max = maximum value of x
p = lower shape parameter >
0
q = upper shape parameter >
0
B( p, q) = beta function
( \
mean = (max − min) p + min
p
(+q \
2
pq
variance = (max − min)
( p + q)2 ( p + q + 1)
 (
 (max − min) p− 1
\ + min if p > 1, q > 1

p+ q− 2

mode = min and max if p < 1, q < 1
min
 if ( p < 1, q ≥ 1) or if ( p = 1, q > 1)
max if ( p ≥ 1, q < 1) or if ( p > 1, q = 1)


 does not uniquely exist if p = q = 1

The beta distribution is a continuous distribution that has both upper and lower finite
bounds. Because many real situations can be bounded in this way, the beta distribution
can be used empirically to estimate the actual distribution before many data are available.
Even when data are available, the beta distribution should fit most data in a reasonable
fashion, although it may not be the best fit. The uniform distribution is a special case of
the beta dis-
tribution with p, q = 1.
As can be seen in the examples that follow, the beta distribution can approach zero or
infinity at either of its bounds, with p controlling the lower bound and q controlling
the upper bound. Values of p, q < 1 cause the beta distribution to approach infinity at
that bound. Values of p, q > 1 cause the beta distribution to be finite at that bound.
Beta distributions have been used to model distributions of activity time in PERT
analy- sis, porosity/void ratio of soil, phase derivatives in communication theory, size of
progeny in Escherichia coli, dissipation rate in breakage models, proportions in gas
mixtures, steady-state reflectivity, clutter and power of radar signals, construction
duration, particle size, tool wear, and others. Many of these uses occur because of the
doubly bounded nature of the beta distribution.

*Adapted by permission from Stat::Fit Users Guide (South Kent, Connecticut: Geer Mountain
Software Corporation, 1997).

709
710 Appendix A Common Continuous and Discrete Distributions

( \
Erlang Distribution (min, m, β) [x − min]
(x − min)m−1 −

f (x ) exp
β m f(m) β
=
min = minimum x
m = shape factor = positive integer
β = scale factor > 0
mean = min + mβ
variance = mβ2
mode = min + β(m − 1)
Appendix A Common Continuous and Discrete Distributions 711

The Erlang distribution is a continuous distribution bounded on the lower side. It

is a special case of the gamma distribution where the parameter m is restricted to a
positive integer. As such, the Erlang distribution has no region where f (x) tends to
infinity at the minimum value of x [m < 1] but does have a special case at m = 1,
where it reduces to the exponential distribution.
The Erlang distribution has been used extensively in reliability and in queuing theory,
and thus in discrete event simulation, because it can be viewed as the sum of m exponen-
tially distributed random variables, each with mean beta. It can be further generalized
(see Banks and Carson 1984; Johnson et al. 1994).
As can be seen in the examples, the Erlang distribution follows the exponential
distrib- ution at m = 1, has a positive skewness with a peak near 0 for m between 2 and
9, and tends to a symmetrical distribution offset from the minimum at larger m.

Exponential Distribution (min, β) ( \

[x − min]
1 —
β
f (x ) =
β
exp
min = minimum x value
β = scale parameter
mean = min +β
variance = β2
mode = min

The exponential distribution is a continuous distribution bounded on the lower side.

Its shape is always the same, starting at a finite value at the minimum and
continuously decreasing at larger x. As shown in the example, the exponential
distribution decreases rapidly for increasing x.
The exponential distribution is frequently used to represent the time between random
occurrences, such as the time between arrivals at a specific location in a queuing model or
the time between failures in reliability models. It has also been used to represent the
service times of a specific operation. Further, it serves as an explicit manner in which
the time dependence on noise may be treated. As such, these models are making
explicit use of the lack of history dependence of the exponential distribution; it has
the same set of
712 Appendix A Common Continuous and Discrete Distributions

probabilities when shifted in time. Even when exponential models are known to be
inadequate to describe the situation, their mathematical tractability provides a good
starting point. A more complex distribution such as Erlang or Weibull may be
investigated (see Johnson et al. 1994, p. 499; Law and Kelton 1991, p. 330).

( \
Gamma Distribution (min, α, β) [x − min]
(x − min)α−1 −

f (x ) exp
β α f(α) β
=
min = minimum x
α = shape parameter > 0
β = scale parameter > 0
mean = min + αβ
variance = rαβ2
min + β(α − 1) if α ≥ 1
mode = min if α < 1

The gamma distribution is a continuous distribution bounded at the lower side. It has
three distinct regions. For α = 1, the gamma distribution reduces to the exponential
distri- bution, starting at a finite value at minimum x and decreasing monotonically
thereafter. For α < 1, the gamma distribution tends to infinity at minimum x and decreases
monotonically for increasing x. For α > 1, the gamma distribution is 0 at minimum x,
peaks at a value that
Appendix A Common Continuous and Discrete Distributions 713

depends on both alpha and beta, and decreases monotonically thereafter. If α is restricted
to positive integers, the gamma distribution is reduced to the Erlang distribution.
Note that the gamma distribution also reduces to the chi-square distribution for
min = 0, β = 2, and α = nµ/2. It can then be viewed as the distribution of the sum
of squares of independent unit normal variables, with nµ degrees of freedom, and is used
in
many statistical tests.
The gamma distribution can also be used to approximate the normal distribution, for
large α, while maintaining its strictly positive values of x [actually (x-min)].
The gamma distribution has been used to represent lifetimes, lead times, personal in-
come data, a population about a stable equilibrium, interarrival times, and service times.
In particular, it can represent lifetime with redundancy (see Johnson et al. 1994, p.
343; Shooman 1990).
Examples of each of the regions of the gamma distribution are shown here. Note the
peak of the distribution moving away from the minimum value for increasing α, but with
a much broader distribution.

( \
Lognormal Distribution (min, µ, σ) [ln(x − min) − µ]2
1

f (x ) = √ exp −
(x − min 2πσ 2σ 2
) 2

min = minimum x
µ = mean of the included normal distribution
σ = standard deviation of the included normal distribution
mean = min + exp(µ + (σ 2 /2))
variance = exp(2µ + σ 2 )(exp(σ2 2 ) −
1) mode = min + exp(µ−σ )

The lognormal distribution is a continuous distribution bounded on the lower side. It

is always 0 at minimum x, rising to a peak that depends on both µ and σ, then decreasing
mo- notonically for increasing x.
By definition, the natural logarithm of a lognormal random variable is a normal
random variable. Its parameters are usually given in terms of this included normal
distribution.
The lognormal distribution can also be used to approximate the normal distribution,
for small σ, while maintaining its strictly positive values of x [actually (x-min)].
714 Appendix A Common Continuous and Discrete Distributions

The lognormal distribution is used in many different areas including the distribution
of particle size in naturally occurring aggregates, dust concentration in industrial atmo-
spheres, the distribution of minerals present in low concentrations, the duration of
sickness absence, physicians’ consulting time, lifetime distributions in reliability,
distribution of income, employee retention, and many applications modeling weight,
height, and so forth (see Johnson et al. 1994, p. 207).
The lognormal distribution can provide very peaked distributions for increasing σ—
indeed, far more peaked than can be easily represented in graphical form.

( \
Normal Distribution (µ, σ) [x − µ]2
1

f (x ) = √ exp −
2π σ 2 2σ 2
µ = shift parameter
σ = scale parameter = standard deviation
mean = µ 2
variance = σ
mode = µ

The normal distribution is an unbounded continuous distribution. It is sometimes

called a Gaussian distribution or the bell curve. Because of its property of representing
an in- creasing sum of small, independent errors, the normal distribution finds many,
many uses in statistics; however, it is wrongly used in many situations. Possibly, the
most important test in the fitting of analytical distributions is the elimination of the
normal distribution as a possible candidate (see Johnson et al. 1994, p. 80).
The normal distribution is used as an approximation for the binomial distribution
when the values of n and p are in the appropriate range. The normal distribution is
frequently used to represent symmetrical data but suffers from being unbounded in both
directions. If the data are known to have a lower bound, they may be better represented
by suitable pa- rameterization of the lognormal, Weibull, or gamma distribution. If the
data are known to have both upper and lower bounds, the beta distribution can be used,
although much work has been done on truncated normal distributions (not supported in
Stat::Fit).
The normal distribution, shown here, has the familiar bell shape. It is unchanged in
shape with changes in µ or σ.
Appendix A Common Continuous and Discrete Distributions 715

Pearson 5 Distribution (min, α, β)

βα
( \
f (x ) = exp — β
f(α) — min)α+1 —min]
(x [x
min = minimum x
α = shape parameter >
0
β =scale parameter > 0
β
min + for α > 1
mean =  α−1

does not exist for 0 < α ≤ 1
 for α > 2
β2
variance =  (α − 1)2 (α − 2)

does not exist for 0 < α ≤ 2
β
mode = min +
α+ 1

The Pearson 5 distribution is a continuous distribution with a bound on the lower

side and is sometimes called the inverse gamma distribution due to the reciprocal relation-
ship between a Pearson 5 random variable and a gamma random variable.
The Pearson 5 distribution is useful for modeling time delays where some minimum
delay value is almost assured and the maximum time is unbounded and variably long,
such as time to complete a difficult task, time to respond to an emergency, time to repair a
tool, and so forth.
The Pearson 5 distribution starts slowly near its minimum and has a peak slightly re-
moved from it, as shown here. With decreasing α, the peak gets flatter (see the vertical
scale) and the tail gets much broader.
716 Appendix A Common Continuous and Discrete Distributions

Pearson 6 Distribution (min, β, p, q)

( \p−1
x − min
β
B( p, q)
f (x) = í ( — min \
p+q
β x1 +

β
x > min
min ∈ (−∞, ∞)
β>0
p>0
q>0
β( p, q) = beta function
 for q > 1
βp
min
mean =  + q−1

does not exist for 0 < q ≤ 1
 2
β q( p + q − 1)
for q > 2
variance =  (q − 1)2 (q −
2)

does not exist for 0 < q ≤ 2

min β(p − 1) for p ≥ 1
mode = + q+1

min otherwise

The Pearson 6 distribution is a continuous distribution bounded on the low side. The
Pearson 6 distribution is sometimes called the beta distribution of the second kind due to
the relationship of a Pearson 6 random variable to a beta random variable.
Like the gamma distribution, the Pearson 6 distribution has three distinct regions.
For p = 1, the Pearson 6 distribution resembles the exponential distribution, starting
at a finite value at minimum x and decreasing monotonically thereafter. For p < 1, the
Pearson 6
distribution tends to infinity at minimum x and decreases monotonically for
increasing x. For p > 1, the Pearson 6 distribution is 0 at minimum x, peaks at a value
that depends on both p and q, and decreases monotonically thereafter.
Appendix A Common Continuous and Discrete Distributions 717

The Pearson 6 distribution appears to have found little direct use, except in its reduced
form as the F distribution, where it serves as the distribution of the ratio of independent
estimators of variance and provides the final test for the analysis of variance.
The three regions of the Pearson 6 distribution are shown here. Also note that the
distribution becomes sharply peaked just off the minimum for increasing q.

Triangular Distribution (min, max, mode)


2(x − min) if min ≤ x ≤

  (max − min)(mode −
mode if mode < x
f (x) = min)
2(max x ) ≤ max

 −
(max − min)(max − mode)

min = minimum x
max = maximum x
mode = most likely
x
min + max + mode

mean =
3
min + max2 + mode2 − (min)(max) − (min)(mode) − (max)
2
variance =
(mode)
18

The triangular distribution is a continuous distribution bounded on both sides. The tri-
angular distribution is often used when no or few data are available; it is rarely an
accurate representation of a data set (see Law and Kelton 1991, p. 341). However, it is
employed as the functional form of regions for fuzzy logic due to its ease of use.
The triangular distribution can take on very skewed forms, as shown here, including
negative skewness. For the exceptional cases where the mode is either the min or max,
the triangular distribution becomes a right triangle.
718 Appendix A Common Continuous and Discrete Distributions

Uniform Distribution (min, max)

1
min
f (x) =
min = minimum x max −
max = maximum x
min + max
mean = 2
(max − min)2
variance =
12
mode does not exist

The uniform distribution is a continuous distribution bounded on both sides. Its

density does not depend on the value of x. It is a special case of the beta distribution. It is
frequently called the rectangular distribution (see Johnson et al. 1995, p. 276). Most
random number generators provide samples from the uniform distribution on (0,1) and
then convert these samples to random variates from other distributions.
The uniform distribution is used to represent a random variable with constant
likelihood of being in any small interval between min and max. Note that the probability
of either the min or max value is 0; the end points do not occur. If the end points are
necessary, try the sum of two opposing right triangular distributions.

( ( \α \
Weibull Distribution (min, α, β) [x − min]
( \α −1
α x − min

f (x) = exp −
β β

β
min = minimum x
α = shape parameter > 0
β = scale parameter > 0
mean = min + αβ
variance = rαβ2
min + β(α − 1) if α ≥ 1
mode = min if α < 1
Appendix A Common Continuous and Discrete Distributions 719

The Weibull distribution is a continuous distribution bounded on the lower side. Be-
cause it provides one of the limiting distributions for extreme values, it is also referred to
as the Frechet distribution and the Weibull–Gnedenko distribution. Unfortunately, the
Weibull distribution has been given various functional forms in the many engineering ref-
erences; the form here is the standard form given in Johnson et al. 1994, p. 628.
Like the gamma distribution, the Weibull distribution has three distinct regions. For
α = 1, the Weibull distribution is reduced to the exponential distribution, starting at a
finite value at minimum x and decreasing monotonically thereafter. For α < 1, the
Weibull dis-
tribution tends to infinity at minimum x and decreases monotonically for increasing x. For
α > 1, the Weibull distribution is 0 at minimum x, peaks at a value that depends on both α
and β, and decreases monotonically thereafter. Uniquely, the Weibull distribution has neg-
ative skewness for α > 3.6.
The Weibull distribution can also be used to approximate the normal distribution for
α = 3.6, while maintaining its strictly positive values of x [actually (x-min)], although
the kurtosis is slightly smaller than 3, the normal value.
The Weibull distribution derived its popularity from its use to model the strength of
materials, and has since been used to model just about everything. In particular, the
Weibull distribution is used to represent wear-out lifetimes in reliability, wind speed, rain-
fall intensity, health-related issues, germination, duration of industrial stoppages,
migratory systems, and thunderstorm data (see Johnson et al. 1994, p. 628; Shooman
1990, p. 190).
720 Appendix A Common Continuous and Discrete Distributions

A.2 Discrete Distributions

Binomial Distribution (n, p)
( n\ x n x
−
p(x) = p (1 − p)
x

x = 0, 1, . . . , n
n = number of trials
p = probability of the event occurring
( \ n!
n
= x!(n − x)!
x
mean = n p
variance = np(1
r − p)
p(n + 1) − 1 and p(n + 1) if p(n + 1) is an integer
mode = p( + 1) otherwise
n

The binomial distribution is a discrete distribution bounded by [0, n]. Typically, it

is used where a single trial is repeated over and over, such as the tossing of a coin.
The para- meter p is the probability of the event, either heads or tails, either
occurring or not occur- ring. Each single trial is assumed to be independent of all
others. For large n, the binomial distribution may be approximated by the normal
distribution—for example, when np > 9
and p < 0.5 or when np(1 − p) > 9.
Appendix A Common Continuous and Discrete Distributions 721

As shown in the examples, low values of p give high probabilities for low values of
x and vice versa, so that the peak in the distribution may approach either bound. Note that
the probabilities are actually weights at each integer but are represented by broader bars
for visibility.
The binomial distribution can be used to describe
• The number of defective items in a batch.
• The number of people in a group of a particular type.
• Out of a group of employees, the number of employees who call in sick on a
given day.
It is also useful in other event sampling tests where the probability of the event is known to
be constant or nearly so. See Johnson et al. (1992, p. 134).

Discrete Uniform Distribution (min,

max) 1
min + 1
p(x) =
max −

x = min, min + 1, . . . , max

min = minimum x
max = maximum x
min + max
mean = 2
2
variance = (max − min +1) −
1
12
mode does not uniquely exist

The discrete uniform distribution is a discrete distribution bounded on [min, max]

with constant probability at every value on or between the bounds. Sometimes called
the dis- crete rectangular distribution, it arises when an event can have a finite and
equally proba- ble number of outcomes (see Johnson et al. 1992, p. 272). Note that the
probabilities are actually weights at each integer but are represented by broader bars for
visibility.
722 Appendix A Common Continuous and Discrete Distributions

Geometric Distribution
(p) p(x ) = p(1 − p)x
p = probability of
occurrence 1 − p
mean = p
1−
variance =
p p2
mode = 0

The geometric distribution is a discrete distribution bounded at 0 and unbounded on

the high side. It is a special case of the negative binomial distribution. In particular, it is
the di- rect discrete analog for the continuous exponential distribution. The geometric
distribution has no history dependence, its probability at any value being independent of
a shift along the axis.
The geometric distribution has been used for inventory demand, marketing survey re-
turns, a ticket control problem, and meteorological models (see Johnson et al. 1992, p.
201; Law and Kelton 1991; p. 366.)
Several examples with decreasing probability are shown here. Note that the
probabilities are actually weights at each integer but are represented by broader bars for
visibility.

Poisson Distribution (λ)

p(x ) e−λ λx
= x!
λ = rate of
occurrence mean = λ
variance = λ

r
mode = λ − 1 and λ if λ is an integer
λ otherwise

The Poisson distribution is a discrete distribution bounded at 0 on the low side and un-
bounded on the high side. The Poisson distribution is a limiting form of the
hypergeometric distribution.
Appendix A Common Continuous and Discrete Distributions 723

The Poisson distribution finds frequent use because it represents the infrequent occur-
rence of events whose rate is constant. This includes many types of events in time and
space such as arrivals of telephone calls, defects in semiconductor manufacturing, defects
in all aspects of quality control, molecular distributions, stellar distributions, geographical
distributions of plants, shot noise, and so on. It is an important starting point in queuing
theory and reliability theory (see Johnson et al. 1992, p. 151). Note that the time between
arrivals (defects) is exponentially distributed, which makes this distribution a particularly
convenient starting point even when the process is more complex.
The Poisson distribution peaks near λ and falls off rapidly on either side. Note that the
probabilities are actually weights at each integer but are represented by broader bars for
visibility.

References
Banks, Jerry, and John S. Carson II. Discrete-Event System Simulation. Englewood Cliffs,
NJ: Prentice Hall, 1984.
Johnson, Norman L.; Samuel Kotz; and N. Balakrishnan. Continuous Univariate Distribu-
tions. Vol. 1. New York: John Wiley & Sons, 1994.
Johnson, Norman L.; Samuel Kotz; and N. Balakrishnan. Continuous Univariate Distri-
butions. Vol. 2. New York: John Wiley & Sons, 1995.
Johnson, Norman L.; Samuel Kotz; and Adrienne W. Kemp. Univariate Discrete Distribu-
tions. New York: John Wiley & Sons, 1992.
Law, Averill M., and W. David Kelton. Simulation Modeling and Analysis. New York:
McGraw-Hill, 1991.
Shooman, Martin L. Probabilistic Reliability: An Engineering Approach. Melbourne,
Florida: Robert E. Krieger, 1990.
Harrell−Ghosh−Bo Appendi B. Critical Values © The
wden: Simulation xes for Student’s t McGraw−Hill
Using
ProModel, Second Distribution
Standard and Companies,
Edition Normal
Distribution

APPENDIX B CRITICAL VALUES FOR STUDENT’S t DISTRIBUTION AND STANDARD

NORMAL DISTRIBUTION
(Critical values for the standard normal distribution (z α ) appear in the last row with
df = ∞. zα = t∞,α .)

0 tdf,

α = 0.40 α = 0.30 α = 0.20 α = 0.10 α = 0.05 α = 0.025 α = 0.01 α = 0.005

1 0.325 0.727 1.367 3.078 6.314 12.706 31.827 63.657

2 0.289 0.617 1.061 1.886 2.920 4.303 6.965 9.925
3 0.277 0.584 0.978 1.638 2.353 3.182 4.541 5.841
4 0.271 0.569 0.941 1.533 2.132 2.776 3.747 4.604
5 0.267 0.559 0.920 1.476 2.015 2.571 3.365 4.032
6 0.265 0.553 0.906 1.440 1.943 2.447 3.143 3.707
7 0.263 0.549 0.896 1.415 1.895 2.365 2.998 3.499
8 0.262 0.546 0.889 1.397 1.860 2.306 2.896 3.355
9 0.261 0.543 0.883 1.383 1.833 2.262 2.821 3.250
10 0.260 0.542 0.879 1.372 1.812 2.228 2.764 3.169
11 0.260 0.540 0.876 1.363 1.796 2.201 2.718 3.106
12 0.259 0.539 0.873 1.356 1.782 2.179 2.681 3.055
13 0.259 0.538 0.870 1.350 1.771 2.160 2.650 3.012
Degrees of Freedom (df )

14 0.258 0.537 0.868 1.345 1.761 2.145 2.624 2.977

15 0.258 0.536 0.866 1.341 1.753 2.131 2.602 2.947
16 0.258 0.535 0.865 1.337 1.746 2.120 2.583 2.921
17 0.257 0.534 0.863 1.333 1.740 2.110 2.567 2.898
18 0.257 0.534 0.862 1.330 1.734 2.101 2.552 2.878
19 0.257 0.533 0.861 1.328 1.729 2.093 2.539 2.861
20 0.257 0.533 0.860 1.325 1.725 2.086 2.528 2.845
21 0.257 0.532 0.859 1.323 1.721 2.080 2.518 2.831
22 0.256 0.532 0.858 1.321 1.717 2.074 2.508 2.819
23 0.256 0.532 0.858 1.319 1.714 2.069 2.500 2.807
24 0.256 0.531 0.857 1.316 1.708 2.060 2.485 2.797
25 0.256 0.531 0.856 1.316 1.708 2.060 2.485 2.787
26 0.256 0.531 0.856 1.315 1.706 2.056 2.479 2.779
27 0.256 0.531 0.855 1.314 1.703 2.052 2.473 2.771
28 0.256 0.530 0.855 1.313 1.701 2.048 2.467 2.763
29 0.256 0.530 0.854 1.310 1.697 2.042 2.457 2.756
30 0.256 0.530 0.854 1.310 1.697 2.042 2.457 2.750
40 0.255 0.529 0.851 1.303 1.684 2.021 2.423 2.704
60 0.254 0.527 0.848 1.296 1.671 2.000 2.390 2.660
120 0.254 0.526 0.845 1.289 1.658 1.980 2.358 2.617
∞ 0.253 0.524 0.842 1.282 1.645 1.960 2.326 2.576

724
 Harrell
−Ghos
APPENDIX C F DISTRIBUTION FOR α = 0.05 h−Bow
den:
Simula
tion
Using
Numerator Degrees of Freedom [df(Treatment)] ProMo
del,
1 2 3 4 5 6 7 8 9 10 12 14 16 20 24 30 40 50 100 200 ∞
A
p
3 10.13 9.55 9.28 9.12 9.01 8.94 8.89 8.85 8.81 8.79 8.74 8.71 8.69 8.66 8.64 8.62 8.59 8.58 8.55 8.54 8.54
p
4 7.71 6.94 6.59 6.39 6.26 6.16 6.09 6.04 6.00 5.96 5.91 5.87 5.84 5.80 5.77 5.75 5.72 5.70 5.66 5.65 5.63 e
5 6.61 5.79 5.41 5.19 5.05 4.95 4.88 4.82 4.77 4.74 4.68 4.64 4.60 4.56 4.53 4.50 4.46 4.44 4.41 4.39 4.36 n
6 5.99 5.14 4.76 4.53 4.39 4.28 4.21 4.15 4.10 4.06 4.00 3.96 3.92 3.87 3.84 3.81 3.77 3.75 3.71 3.69 3.67
7 5.59 4.74 4.35 4.12 3.97 3.87 3.79 3.73 3.68 3.64 3.57 3.53 3.49 3.44 3.41 3.38 3.34 3.32 3.27 3.25 3.23
8 5.32 4.46 4.07 3.84 3.69 3.58 3.50 3.44 3.39 3.35 3.28 3.24 3.20 3.15 3.12 3.08 3.04 3.02 2.97 2.95 2.93
9 5.12 4.26 3.86 3.63 3.48 3.37 3.29 3.23 3.18 3.14 3.07 3.03 2.99 2.94 2.90 2.86 2.83 2.80 2.76 2.73 2.71
10 4.96 4.10 3.71 3.48 3.33 3.22 3.14 3.07 3.02 2.98 2.91 2.86 2.83 2.77 2.74 2.70 2.66 2.64 2.59 2.56 2.54
11 4.84 3.98 3.59 3.36 3.20 3.09 3.01 2.95 2.90 2.85 2.79 2.74 2.70 2.65 2.61 2.57 2.53 2.51 2.46 2.43 2.41 C.
F
12 4.75 3.89 3.49 3.26 3.11 3.00 2.91 2.85 2.80 2.75 2.69 2.64 2.60 2.54 2.51 2.47 2.43 2.40 2.35 2.32 2.30 Di
Denominator Degrees of Freedom [df(Error)]

13 4.67 3.81 3.41 3.18 3.03 2.92 2.83 2.77 2.71 2.67 2.60 2.55 2.51 2.46 2.42 2.38 2.34 2.31 2.26 2.23 2.21 st
14 4.60 3.74 3.34 3.11 2.96 2.85 2.76 2.70 2.65 2.60 2.53 2.48 2.44 2.39 2.35 2.31 2.27 2.24 2.19 2.16 2.13 ri
15 4.54 3.68 3.29 3.06 2.90 2.79 2.71 2.64 2.59 2.54 2.48 2.42 2.38 2.33 2.29 2.25 2.20 2.18 2.12 2.10 2.07 b
ut
16 4.49 3.63 3.24 3.01 2.85 2.74 2.66 2.59 2.54 2.49 2.42 2.37 2.33 2.28 2.24 2.19 2.15 2.12 2.07 2.04 2.01
io
17 4.45 3.59 3.20 2.96 2.81 2.70 2.61 2.55 2.49 2.45 2.38 2.33 2.29 2.23 2.19 2.15 2.10 2.08 2.02 1.99 1.96 n
18 4.41 3.55 3.16 2.93 2.77 2.66 2.58 2.51 2.46 2.41 2.34 2.29 2.25 2.19 2.15 2.11 2.06 2.04 1.98 1.95 1.92 fo
19 4.38 3.52 3.13 2.90 2.74 2.63 2.54 2.48 2.42 2.38 2.31 2.26 2.21 2.16 2.11 2.07 2.03 2.00 1.94 1.91 1.88
20 4.35 3.49 3.10 2.87 2.71 2.60 2.51 2.45 2.39 2.35 2.28 2.23 2.18 2.12 2.08 2.04 1.99 1.97 1.91 1.88 1.84
22 4.30 3.44 3.05 2.82 2.66 2.55 2.46 2.40 2.34 2.30 2.23 2.17 2.13 2.07 2.03 1.98 1.94 1.91 1.85 1.82 1.78
24 4.26 3.40 3.01 2.78 2.62 2.51 2.42 2.36 2.30 2.25 2.18 2.13 2.09 2.03 1.98 1.94 1.89 1.86 1.80 1.77 1.73
26 4.23 3.37 2.98 2.74 2.59 2.47 2.39 2.32 2.27 2.22 2.15 2.09 2.05 1.99 1.95 1.90 1.85 1.82 1.76 1.73 1.69
28 4.20 3.34 2.95 2.71 2.56 2.45 2.36 2.29 2.24 2.19 2.12 2.06 2.02 1.96 1.91 1.87 1.82 1.79 1.73 1.69 1.66
30 4.17 3.32 2.92 2.69 2.53 2.42 2.33 2.27 2.21 2.16 2.09 2.04 1.99 1.93 1.89 1.84 1.79 1.76 1.70 1.66 1.62
35 4.12 3.27 2.87 2.64 2.49 2.37 2.29 2.22 2.16 2.11 2.04 1.99 1.94 1.88 1.83 1.79 1.74 1.70 1.63 1.60 1.56
40 4.08 3.23 2.84 2.61 2.45 2.34 2.25 2.18 2.12 2.08 2.00 1.95 1.90 1.84 1.79 1.74 1.69 1.66 1.59 1.55 1.51
45 4.06 3.20 2.81 2.58 2.42 2.31 2.22 2.15 2.10 2.05 1.97 1.92 1.87 1.81 1.76 1.71 1.66 1.63 1.55 1.51 1.47 ©
50 4.03 3.18 2.79 2.56 2.40 2.29 2.20 2.13 2.07 2.03 1.95 1.89 1.85 1.78 1.74 1.69 1.63 1.60 1.52 1.48 1.44 The
60 4.00 3.15 2.76 2.53 2.37 2.25 2.17 2.10 2.04 1.99 1.92 1.86 1.82 1.75 1.70 1.65 1.59 1.56 1.48 1.44 1.39 McGr
70 3.98 3.13 2.74 2.50 2.35 2.23 2.14 2.07 2.02 1.97 1.89 1.84 1.79 1.72 1.67 1.62 1.57 1.53 1.45 1.40 1.35 aw−
80 3.96 3.11 2.72 2.49 2.33 2.21 2.13 2.06 2.00 1.95 1.88 1.82 1.77 1.70 1.65 1.60 1.54 1.51 1.43 1.38 1.33 Hill
100 3.94 3.09 2.70 2.46 2.31 2.19 2.10 2.03 1.97 1.93 1.85 1.79 1.75 1.68 1.63 1.57 1.52 1.48 1.39 1.34 1.28 Comp
200 3.89 3.04 2.65 2.42 2.26 2.14 2.06 1.98 1.93 1.88 1.80 1.74 1.69 1.62 1.57 1.52 1.46 1.41 1.32 1.26 1.19
7 ∞ 1.04 3.00 2.61 2.37 2.21 2.10 2.01 1.94 1.88 1.83 1.75 1.69 1.64 1.57 1.52 1.46 1.40 1.35 1.25 1.17 1.03
2
 Harrell−Ghosh−Bo Appendixes D. Critical Values © The
wden: Simulation for Chi−Square McGraw−Hill
Using ProModel, Distribution Companies,
Second Edition 2004

APPENDIX D CRITICAL VALUES FOR CHI-SQUARE DISTRIBUTION

x 2df,

α = 0.4 α = 0.3 α = 0.2 α = 0.1 α = 0.05 α = 0.025 α = 0.01 α = 0.005

1 0.708 1.074 1.642 2.706 3.841 5.024 6.635 7.879

2 1.833 2.408 3.219 4.605 5.991 7.378 9.210 10.597
3 2.946 3.665 4.642 6.251 7.815 9.348 11.345 12.838
4 4.045 4.878 5.989 7.779 9.488 11.143 13.277 14.860
5 5.132 6.064 7.289 9.236 11.070 12.832 15.086 16.750
6 6.211 7.231 8.558 10.645 12.592 14.449 16.812 18.548
7 7.283 8.383 9.803 12.017 14.067 16.013 18.475 20.278
8 8.351 9.524 11.030 13.362 15.507 17.535 20.090 21.955
9 9.414 10.656 12.242 14.684 16.919 19.023 21.666 23.589
10 10.473 11.781 13.442 15.987 18.307 20.483 23.209 25.188
11 11.530 12.899 14.631 17.275 19.675 21.920 24.725 26.757
12 12.584 14.011 15.812 18.549 21.026 23.337 26.217 28.300
Degrees of Freedom (df )

13 13.636 15.119 16.985 19.812 22.362 24.736 27.688 29.819

14 14.685 16.222 18.151 21.064 23.685 26.119 29.141 31.319
15 15.733 17.322 19.311 22.307 24.996 27.488 30.578 32.801
16 16.780 18.418 20.465 23.542 26.296 28.845 32.000 34.267
17 17.824 19.511 21.615 24.769 27.587 30.191 33.409 35.718
18 18.868 20.601 22.760 25.989 28.869 31.526 34.805 37.156
19 19.910 21.689 23.900 27.204 30.144 32.852 36.191 38.582
20 20.951 22.775 25.038 28.412 31.410 34.170 37.566 39.997
21 21.992 23.858 26.171 29.615 32.671 35.479 38.932 41.401
22 23.031 24.939 27.301 30.813 33.924 36.781 40.289 42.796
23 24.069 26.018 28.429 32.007 35.172 38.076 41.638 44.181
24 25.106 27.096 29.553 33.196 36.415 39.364 42.980 45.558
25 26.143 28.172 30.675 34.382 37.652 40.646 44.314 46.928
26 27.179 29.246 31.795 35.563 38.885 41.923 45.642 48.290
27 28.214 30.319 32.912 36.741 40.113 43.195 46.963 49.645
28 29.249 31.391 34.027 37.916 41.337 44.461 48.278 50.994
29 30.283 32.461 35.139 39.087 42.557 45.722 49.588 52.335
30 31.316 33.530 36.250 40.256 43.773 46.979 50.892 53.672
40 41.622 44.165 47.269 51.805 55.758 59.342 63.691 66.766
60 62.135 65.226 68.972 74.397 79.082 83.298 88.379 91.952
120 123.289 127.616 132.806 140.233 146.567 152.211 158.950 163.648

726
Harrell−Ghosh−Bo III. Case Eight Possible © The
wden: Simulation Study Simulations McGraw−Hill
Using ProModel, Assignme Companies,
Second Edition

P A R T

III CASE STUDY

ASSIGNMENTS

Case 1 Toy Airplane Manufacturing 683

Case 2 Mi Cazuela—Mexican Restaurant 683
Case 3 Jai Hind Cycles Inc. Plans New Production Facility 685
Case 4 The FSB Coin System 688
Case 5 Automated Warehousing at Athletic Shoe Company 690
Case 6 Concentrate Line at Florida Citrus Company 692
Case 7 Balancing the Production Line at Southern California Door Company 698
Case 8 Material Handling at California Steel Industries Inc. 705

These case studies have been used in senior- or graduate-level simulation classes. Each of
these case studies can be analyzed over a three- to five-week period. A single student or
a group of two to three students can work together on these case studies. If you are using
the student version of the software, you may need to make some simplifying
assumptions to limit the size of the model. You will also need to fill in (research or
assume) some of the in- formation and data missing from the case descriptions.

CASE STUDY 1 TOY AIRPLANE MANUFACTURING

A toy company produces three types (A, B, and C) of toy aluminum airplanes in the fol-
lowing daily volumes: A = 1000, B = 1500 and C = 1800. The company expects
demand to increase for its products by 30 percent over the next six months and needs to
know the
total machines and operators that will be required. All planes go through five operations
(10 through 50) except for plane A, which skips operation 40. Following is a list of
opera- tion times, move times, and resources used:

Move Time to Movement

Opn Description Operation Time Resource Next Operation Resource
Harrell−Ghosh−Bo III. Case Eight Possible © The
wden: Simulation Study Simulations McGraw−Hill
Using ProModel, Assignme Companies,
Second Edition
10 Die casting 3 min. (outputs 6 parts) Automated die caster .3 min. Mover
20 Cutting Triangular (.25, .28, .35) Cutter none
30 Grinding Sample times: .23, .22, .26, Grinder .2 min. Mover
.22, .25, .23, .24, .22, .21,
.23, .20, .23, .22, .25, .23,
.24, .23, .25, .47, .23, .25,
.21, .24, .22, .26, .23, .25,
.24, .21, .24, .26
40 Coating 12 min. per batch of 24 Coater .2 min Mover
50 Inspection and Triangular (.27, .30, .40) Packager To exit with 88% yield
packaging

After die casting, planes are moved to each operation in batch sizes of 24. Input buffers
exist at each operation. The factory operates eight hours a day, five days per week. The
fac- tory starts out empty at the beginning of each day and ships all parts produced at the
end of the day. The die caster experiences downtimes every 30 minutes exponentially
distributed and takes 8 minutes normally distributed with a standard deviation of 2
minutes to repair. One maintenance person is always on duty to make repairs.
Find the total number of machines and personnel needed to meet daily production re-
quirements. Document the assumptions and experimental procedure you went through to
conduct the study.

CASE STUDY 2 MI CAZUELA—MEXICAN RESTAURANT

Maria opened her authentic Mexican restaurant Mi Cazuela (a cazuela is a clay cooking
bowl with a small handle on each side) in Pasadena, California, in the 1980s. It quickly
be- came popular for the tasty food and use of fresh organic produce and all-natural
meats. As her oldest child, you have been asked to run the restaurant. If you are able to
gain her con- fidence, she will eventually hand over the restaurant to you.

683
684 Part III Case Study Assignments

You have definite ideas about increasing the profitability at Mi Cazuela. Lately, you
have observed a troubling trend in the restaurant. An increasing number of customers are
expressing dissatisfaction with the long wait, and you have also observed that some
people leave without being served.
Your initial analysis of the situation at Mi Cazuela indicates that one way to improve
cus- tomer service is to reduce the waiting time in the restaurant. You also realize that by
optimiz- ing the process for the peak time in the restaurant, you will be able to increase
the profit.
Customers arrive in groups that vary in size from one to four (uniformly distributed).
Cur- rently, there are four tables for four and three tables for two patrons in the dining area.
One table for four can be replaced with two tables for two, or vice versa. Groups of one or
two customers wait in one queue while groups of three or four customers wait in another
queue. Each of these waiting lines can accommodate up to two groups only. One- or
two-customer groups are directed to tables for two. Three- or four-customer groups are
directed to tables for four.
There are two cooks in the kitchen and two waiters. The cooks are paid $100/day, and
the waiters get $60/day. The cost of raw material (vegetables, meat, spices, and other food
mate- rial) is $1 per customer. The overhead cost of the restaurant (rent, insurance,
utilities, and so on) is $300/day. The bill for each customer varies uniformly from $10 to
$16 or U(13,3).
The restaurant remains open seven days a week from 5 P.M. till 11 P.M. The customer
ar- rival pattern is as follows. The total number of customer groups visiting the restaurant
each day varies uniformly between 30 and 50 or U(40,10):

Customer Arrival Pattern

From To Percent

5 P.M. 6 P.M. 10
6 P.M. 7 P.M. 20
7 P.M. 9 P.M. 55
9 P.M. 10 P.M. 10
10 P.M. 11 P.M. 5

Processes at the Restaurant

When a table of the right size becomes available and a waiter is free, he or she seats the
cus- tomer, writes down the order, and delivers the order to the kitchen. Cooks prepare the
food in the kitchen and bring it out. Any available waiter delivers the food to the
customer. Customers enjoy the dinner. A waiter cleans the table and collects payment
from the cus- tomers. The customers leave the restaurant. The various activity times are
as follows:

Activity # Activity Activity Time Distributions

1 Waiter seats the customer group. N(2, 0.5) min

2 Waiter writes down the order. N(3, 0.7) min
3 Waiter delivers the order to the kitchen. N(2, 0.5) min
4 Cook prepares food. N(5, 1) min
5 Cook brings out the food. N(2, 0.5) min
6 Waiter delivers food to customer group. N(2, 0.5) min
7 Customers eat. N(10, 2) min
8 Waiter cleans table and collects payment + tips. N(3, 0.8) min
 Case Study 3 Jai Hind Cycles Inc. Plans New Production Facility 685

Part A
Analyze and answer the following questions:
1. What is the range of profit (develop a ±3σ confidence interval) per day at Mi Cazuela?
2. On average, how many customers leave the restaurant (per day) without eating?
3. What is the range of time (develop a ±3σ confidence interval) a customer
group spends at the restaurant?
4. How much time (develop a ±3σ confidence interval) does a customer group
wait in line?

Part B
You would like to change the mix of four-seat tables and two-seat tables in the dining area
to increase profit and reduce the number of balking customers. You would also like to in-
vestigate if hiring additional waiters and/or cooks will improve the bottom line (profit).

Part C
You are thinking of using an automated handheld device for the waiters to take the cus-
tomer orders and transmit the information (wireless) to the kitchen. The order entry and
transmission (activities #2 and 3) is estimated to take N(1.5, 0.2) minutes. The rent for
each of these devices is $2/hour. Will using these devices improve profit? Reduce
customer time in the system? Should you invest in these handheld devices?

Part D
The area surrounding the mall is going through a construction boom. It is expected that
Mi Cazuela (and the mall) will soon see an increase in the number of patrons per day.
Soon the number of customer groups visiting the restaurant is expected to grow to 50–70
per day, or U(60,10). You have been debating whether to take over the adjoining
coffeeshop and ex- pand the Mi Cazuela restaurant. The additional area will allow you to
add four more tables of four and three tables of two customers each. The overhead cost
of the additional area will be $200 per day. Should you expand your restaurant? Will it
increase profit?
How is your performance in managing Mi Cazuela? Do you think Mama Maria will be
proud and hand over the reins of the business to you?

CASE STUDY 3 JAI HIND CYCLES INC. PLANS NEW PRODUCTION FACILITY

Mr. Singh is the industrial engineering manager at Jai Hind Cycles, a producer of bicycles.
As part of the growth plan for the company, the management is planning to introduce a
new model of mountain bike strictly for the export market. Presently, JHC assembles
regular bikes for the domestic market. The company runs one shift every day. The
present facility has a process layout. Mr. Singh is considering replacing the existing
layout with a group technology cell layout. As JHC’s IE manager, Mr. Singh has been
asked to report on the impact that will be made by the addition of the mountain bike to
JHC’s current production capabilities.
686 Part III Case Study Assignments

Mr. Singh has collected the following data from the existing plant:
1. The present production rate is 200 regular bikes per day in one 480-minute
shift.
2. The following is the list of all the existing equipment in JHC’s production
facility:

Equipment Type Process Time Quantity

Forging 60 sec/large sprocket 2

30 sec/small sprocket
Molding 2 parts/90 sec 2
Welding 1 weld/60 sec 8
Tube bender 1 bend/30 sec 2
Die casting 1 part/minute 1
Drill press 20 sec/part 1
Punch press 30 sec/part 1
Electric saw 1 cut/15 sec 2
Assembly 30–60 minutes

Table 1 shows a detailed bill of materials of all the parts manufactured by JHC and the
machining requirements for both models of bikes. Only parts of the regular and the
moun- tain bikes that appear in this table are manufactured within the plant. The rest of
the parts either are purchased from the market or are subcontracted to the vendors.
A job-shop floor plan of the existing facility is shown in Figure 1. The whole facility
is 500,000 square feet in covered area.
The figures for the last five years of the combined total market demand are as follows:

Year Demand

1998 75,000
1999 82,000
2000 80,000
2001 77,000
2002 79,000

At present, the shortages are met by importing the balance of the demand. However, this
is a costly option, and management thinks indigenously manufactured bikes of good
quality would be in great demand.

Tasks
1. Design a cellular layout for the manufacturing facility, incorporating group
technology principles.
2. Determine the amount of resources needed to satisfy the increased demand.
3. Suggest a possible material handling system for the new facility—conveyor(s),
forklift truck(s), AGV(s).
 Case Study 3 Jai Hind Cycles Inc. Plans New Production Facility 687

TABLE 1 Detailed Bill of Materials for Jai Hind Cycles

Bicycle Parts and Process List

Assembly Name Subassembly Name Part Name Operations

1 Regular bike Assembly

1.1 Bike frame Assembly
1.1.1 Top tube Cutting
1.1.2 Seat tube Cutting
1.1.3 Down tube Cutting
1.1.4 Head tube Cutting
1.1.5 Fork blade Cutting Bending
1.1.6 Chainstay Cutting
1.1.7 Seatstay Cutting Bending
1.1.8 Rear fork tip Welding
1.1.9 Front fork tip Welding
1.1.10 Top tube lug Casting Welding
1.1.11 Down tube lug Casting Welding
1.1.12 Seat lug Casting Welding
1.1.13 Bottom bracket Casting Welding
1.2 Handlebar and Assembly
stem assembly 1.2.1 Handlebars Cutting Bending
1.2.2 Handlebar plugs Molding
1.2.3 Handlebar stem Casting Cutting
1.3 Saddle post Assembly
assembly 1.3.1 Saddle Molding
1.3.2 Seat post Cutting
1.4 Drive chain Assembly
assembly 1.4.1 Crank spider Forging
1.4.2 Large sprocket Forging
1.4.3 Small sprocket Forging
2 Mountain Assembly
bike 2.1 Frame and Assembly
handle bar 2.1.1 Hub Cutting
2.1.2 Frame legs Cutting Bending Bending
2.1.3 Handlebar tube Cutting Welding Welding Welding Welding
2.1.4 Saddle post tube Cutting
2.1.5 Handlebar Cutting
2.1.6 Balance bar Cutting Welding Welding
2.2 Saddle and Assembly
seat post 2.2.1 Handlebar post Cutting
2.2.2 Saddle post Cutting Drill press
2.2.3 Mount brackets Cutting Drill press Welding Welding
2.2.4 Axle mount Cutting Punch press Welding Welding
2.2.5 Chain guard Molding

4. How many shifts per day does JHC need to work?

5. Develop a staffing plan for the present situation and for the new situation.
6. Develop a cost model and economic justification for the growth plan. Is the
increased production plan justified from an economic standpoint?
 688 Part III Case Study Assignments

FIGURE 1
Floor plan for Jai Hind
Cycles. Raw material storage

Cutting Molding

Bending Casting

Welding Final assembly

Offices Warehouse and

shipping

CASE STUDY 4 THE FSB COIN SYSTEM

George A. Johnson
Idaho State University
Todd Cooper
First Security Bank

Todd had a problem. First Security Bank had developed a consumer lending software
package to increase the capacity and speed with which auto loan applications could be
processed. The system consisted of faxed applications combined with online processing.
The goal had been to provide a 30-minute turnaround of an application from the time the
Case Study 4 The FSB Coin System 689

bank received the faxed application from the dealer to the time the loan was either
approved or disapproved. The system had recently been installed and the results had not
been satisfactory. The question now was what to do next.
First Security Bank of Idaho is the second largest bank in the state of Idaho with
branches throughout the state. The bank is a full-service bank providing a broad range of
banking services. Consumer loans and, in particular, auto loans make up an important part
of these services. The bank is part of a larger system covering most of the intermountain
states, and its headquarters are in Salt Lake City.
The auto loan business is a highly competitive field with a number of players includ-
ing full-line banks, credit unions, and consumer finance companies. Because of the highly
competitive nature, interest rates tend to be similar and competition is based on other
factors. An important factor for the dealer is the time it takes to obtain loan approval. The
quicker the loan approval, the quicker a sale can be closed and merchandise moved. A
30-minute turnaround of loan applications would be an important factor to a dealer, who
has a significant impact on the consumer’s decision on where to seek a loan.
The loan application process begins at the automobile dealership. It is there that an
application is completed for the purpose of borrowing money to purchase a car. The
application is then sent to the bank via a fax machine. Most fax transmissions are less
than two minutes in length, and there is a bank of eight receiving fax machines. All
machines are tied to the same 800 number. The plan is that eight machines should pro-
vide sufficient capacity that there should never be the problem of a busy signal received
by the sending machine.
Once the fax transmission is complete, the application is taken from the machine by a
runner and distributed to one of eight data entry clerks. The goal is that data entry should
take no longer than six minutes. The goal was also set that there should be no greater than
5 percent errors.
Once the data input is complete, the input clerk assigns the application to one of six
regions around the state. Each region has a group of specific dealers determined by geo-
graphic distribution. The application, now electronic in form, is distributed to the regions
via the wide area network. The loan officer in the respective region will then process the
loan, make a decision, and fax that decision back to the dealer. The goal is that the loan
officer should complete this function within 20 minutes. This allows about another two
minutes to fax the application back to the dealer.
The system has been operating approximately six months and has failed to meet the
goal of 30 minutes. In addition, the error rate is running approximately 10 percent.
Summary data are provided here:

Number of
Region Applications Average Time Loan Officers

1 6150 58.76 6
2 1485 37.22 2
3 2655 37.00 4
4 1680 51.07 2
5 1440 37.00 2
6 1590 37.01 3

A weighted average processing time for all regions is 46.07 minutes.

 690 Part III Case Study Assignments

Information on data input indicates that this part of the process is taking almost twice
as long as originally planned. The time from when the runner delivers the document to
when it is entered is currently averaging 9.5 minutes. Also, it has been found that the
time to process an error averages six minutes. Errors are corrected at the region and add
to the re- gion’s processing time.
Todd needed to come up with some recommendations on how to solve the problem.
Staffing seemed to be an issue in some regions, and the performance of the data input
clerks was below expectations. The higher processing times and error rates needed to
be cor- rected. He thought that if he solved these two problems and increased the staff, he
could get the averages in all regions down to 30 minutes.

CASE STUDY 5 AUTOMATED WAREHOUSING AT ATHLETIC SHOE COMPANY

The centralized storage and distribution operation at Athletic Shoe Company (ASC) is
con- sidering replacement of its conventional manual storage racking systems with an
elaborate automated storage and retrieval system (AS/RS). The objective of this case
study is to come up with the preliminary design of the storage and material handling
systems for ASC that will meet the needs of the company in timely distribution of its
products.
On average, between 100,000 and 150,000 pairs of shoes are shipped per day to be-
tween 8000 and 10,000 shipping destinations. In order to support this level of operations,
it is estimated that rack storage space of up to 3,000,000 pairs of shoes, consisting of
30,000 stock-keeping units (SKUs), is required.
The area available for storage, as shown in Figure 1, is 500,000 square feet. The
height of the ceiling is 40 feet. A first-in, first-out (FIFO) inventory policy is adopted
in the

FIGURE 1
Layout of the Athletic
Shoe Company
Sort,
warehouse.
wrap,
Shipping
and
pack

Store

Unpack
and Receiving
scan
Case Study 5 Automated Warehousing at Athletic Shoe Company 691

warehouse. For storage and retrieval, consider the following options:

a. A dedicated picker for each aisle.
b. A picker that is shared between the storage aisles.
For material handling in the shipping and receiving areas, and also between the stor-
age areas and the shipping/receiving docks, consider one or more of the following
options:
a. Forklift trucks.
b. Automated guided vehicles.
c. Conveyors.
You as the warehouse manager would like to discourage many different types of material
handling devices. The number of types of devices should be kept to a minimum, thus
avoiding complicated interface problems.
The weight of the shoeboxes varies from one to six pounds with a mode of four
pounds. All the boxes measure 18" long 12" wide 5" high. Because of the construction of
the boxes and the weight of the shoes, no more than eight boxes can be stacked up on
each other.
The general process flow for receiving and shipping of shoes is as follows:

Receiving
1. Unload from truck.
2. Scan the incoming boxes/pallets.
3. Send to storage racks.
4. Store.

Shipping
1. Batch pick shipping orders.
2. Send to sortation system.
3. Wrap and pack.
4. Load in outgoing truck.

Tasks
1. Construct a simulation model of the warehouse and perform experiments using
the model to judge the effectiveness and efficiency of the design with respect to
parameters such as flows, capacity, operation, interfacing, and so on.
2. Write a detailed specification of the storage plan: the amount of rack storage space
included in the design (capacity), rack types, dimensions, rack configurations, and
aisles within the layout.
3. Design and specify the material handling equipment for all of the functions listed,
including the interfaces required to change handling methods between functions.
4. Design and specify the AS/R system. Compare a dedicated versus a shared
picker system.
692 Part III Case Study Assignments

5. Plan the staffing requirements.

6. How many shifts should this warehouse be working?
7. Estimate the throughput for the warehouse per shift, per day, per year. What
are the design parameters necessary for each function to attain the indicated
level of throughput?
8. Develop a detailed facilities layout of the final design, including aisles and
material handling equipment.
9. Develop a cost estimate for the proposed design.

CASE STUDY 6 CONCENTRATE LINE AT FLORIDA CITRUS COMPANY

Wai Seto, Suhandi Samsudin, Shi Lau, and Samson Chen
California State Polytechnic University–Pomona

Florida Citrus Company (FCC), located in Tampa, Florida, is a subdivision of Healthy

Foods Inc., which currently has 12,000 employees in 50 food production facilities around
the world.
FCC has specialized in producing a wide range of juice products for the past 50 years.
FCC employs about 350 employees. Its juice products are primarily divided in the
following four categories: aseptic products, juice concentrate, jug products, and cup
products.
Based on the product categories, the manufacturing facility is divided into four cells.
Each cell has a different kind of machine setting and configuration. The machines and
equipment are mostly automatic. The aseptic cell is comprised of 44£125 machine,
36£125 machine, J.J. Var., and J.J. Rainbows. Depending on the demands of these sizes,
the equip- ment is flexible to interchange based on the customer orders. The concentrate
line gener- ally produces concentrated juices for different private labels such as Vons,
Stater Bros., Ralph’s, Kroger, and Lucky’s. The concentrate line produces fruit
concentrates such as kiwi–strawberry, apple, orange, lemonade, and grape. The jug line
seldom operates as the demand is poor. The cup line is the fastest-growing product in
the business. It produces mainly apple, orange, grape, and lemonade flavors.
The concentrate line is currently not able to meet the budgeted case rate standard.
FCC is seeking to find the real causes that contribute to the current production
problem. The company also wants to improve the facility layout and reduce inventory
levels in the con- centrate line.
The concentrate line is divided into five stations:
1. Depalletizer: Tri-Can
2. Filler: Pfaudler
3. Seamer: Angelus
4. Palletizer: Currie
5. Packer: Diablo
 Case Study 6 Concentrate Line at Florida Citrus Company 693

The current concentrate line production is as follows:

Equipment Description Rated Speed Operating Speed

Filler 1750 cases/hr 600 cans/min

Seamer 1500 cases/hr 600 cans/min
Packer 1800 cases/hr 28 cases/min
Palletizer 1800 cases/hr 28 cases/min
Depalletizer 1800 cases/hr 600 cans/min
Bundler 1500 cases/hr 550 cans/min

The concentrate line stations and the flow of production are shown in Figure 1. The
concentrate line starts from the receiving area. Full pallet loads of 3600 empty cans in
10 layers arrive at the receiving area. The arrival conveyor transports these pallets to the
depalletizer (1). The cans are loaded onto the depalletizer, which is operated by Don.

FIGURE 1
Concentrate line stations for Florida Citrus Company.

6
1a
Starting point

2 01 5 5a

02 3b
4 7
3a 3 3c
2b 3

03 4a

Ending point

1. Depalletizer 1a. Depalletizer conveyor 1 Operator 1

2. Pfaudler bowl 2a. Lid stamping 2 Operator 2
3. Packmaster mechanism 2b. Filler bowl 3 Operator 3
4. Palletizer conveyor
5. The pallet 3a. Glue mechanism
6. The concentrate cans 3b. Cardboard feeding
7. The box organizer machine 3c. Packmaster
8. The box conveyor
4a. Exit conveyor
5a. Conveyor to the
depalletizer
694 Part III Case Study Assignments

The depalletizer pushes out one layer of 360 cans at a time from the pallet and then
raises up one layer of empty cans onto the depalletizer conveyor belt (1a). Conveyor 1a
transports the layer of cans to the depalletizer dispenser. The dispenser separates each can
from the layer of cans. Individual empty cans travel on the empty can conveyor to the
Pfaudler bowl.
The Pfaudler bowl is a big circular container that stores the concentrate. Its 36 filling
devices are used to fill the cans with concentrate. Pamela operates the Pfaudler bowl.
Empty cans travel on the filler bowl conveyor (2b) and are filled with the appropriate
juice concentrate. Filled cans are sent to the lid stamping mechanism (2a) on the filler
bowl con- veyor. The lid stamping closes the filled cans. As the closed cans come
through the lid stamping mechanism, they are transported by the prewash conveyor to
the washing ma- chine to be flushed with water to wash away any leftover concentrate
on the can. Four closed cans are combined as a group. The group of cans is then
transported by the accu- mulate conveyor to the accumulator.
The accumulator combines six such groups (24 cans in all). The accumulated group
of 24 cans is then transported by the prepack conveyor to the Packmaster (3), operated

FIGURE 2
Process flow for Florida Citrus Company.

Travel by arrival Travel by

conveyor depalletizer
Depalletizer conveyor Depalletizer end
Arrival Entity: full pallet start Entity: Cans 80 (dispenser)
Entity: full pallet Entity: cans 80 Entity: cans 60
• Contains 3600 empty cans in 10 • Push out the cans layer by • The cans 60 will change to empty can
l
• Each layer = 360 cans. • 360 cans/layer. empty can conveyor.
• It changes 360 cans/layer to 3600 empty
cans.
Travel by
empty-can Travel by filler Travel by
conveyor Filler bowl bowl conveyor Filler bowl prewash conveyor
start end Stage 1
Entity: empty Entity: empty Entity: concentrate
can Entity: empty can can Entity: concentrate cans cans Entity: concentrate
• Empty cans will • Empty cans will be
travel one by one filled and the
in a row. entity will be • The filling process will • Four concentrate cans will
changed to be ended. be combined as group
concentrate cans. • The cans will be sent to cans.
the prewash conveyor
to be rinsed.
Travel by
accumulate
conveyor
Travel by Travel by packmaster
Stage prepack conveyor conveyor
2 Packmaster
Entity: Entity: prepack Entity: full box
accumulated
cans Entity: cans Entity: prepack cans
accumulate
d cans • The prepack cans are
• Six accumulated cans wrapped into a full box.
will be combined as
prepack cans.

Travel by palletizer
conveyor
Travel by exit
conveyor Travel by forklift 2
resource
Palletizer Loading zone Exit
Entity: full box pallet Entity: full box pallet
Entity: full box Entity: full box Entity: full box pallet Entity: full box pallet
• 90 full boxes will be
combined as full box
pallet.
Case Study 6 Concentrate Line at Florida Citrus Company 695

by Pat. Pat loads cardboard boxes onto the cardboard feeding machine (3b) next to the
Packmaster. Then the 24 cans are wrapped and packed into each cardboard box.
The glue mechanism inside the Packmaster glues all six sides of the box. The boxes are
then raised up to the palletizer conveyor (3c), which transports the boxes to the
palletizer (4).
The box organizer (7) mechanism loads three boxes at a time onto the pallet. A total of
90 boxes are loaded onto each pallet (10 levels, 9 boxes per level). The palletizer then
low- ers the pallet onto the exit conveyor (4a) to be transported to the loading zone.
From the loading zone a forklift truck carries the pallets to the shipping dock. Figure 2
describes the process flow.
A study conducted by a group of Cal Poly students revealed the cause of most down-
time to be located at the Packmaster. The Packmaster is supposed to pack a group of cans
into a cardboard box. However, if the cardboard is warped, the mechanism will stop the
operation. Another problem with the Packmaster is its glue operation. The glue heads
sometimes are clotted.
All these machines operate in an automatic manner. However, there are frequent
machine stoppages caused by the following factors: change of flavor, poor maintenance,
lack of communication between workers, lack of attention by the workers, inefficient lay-
out of the concentrate line, and bad machine design.
All the stations are arranged in the sequence of the manufacturing process. As such,
the production line cannot operate in a flexible or parallel manner. Also, the machines
depend on product being fed from upstream processes. An upstream machine stoppage
will cause eventual downstream machine stoppages.

Work Measurement
A detailed production study was conducted that brought out the following facts:

Packmaster

Juice Flavors Working Time (%) Down Time (%)

Albertson’s Pink Lemonade 68.75 31.25

Albertson’s Pink Lemonade 77.84 22.16
Best Yet Orange Juice 71.73 28.27
Crisp Lemonade 65.75 34.25
Flav-R-Pac Lemonade 76.35 23.65
Fry’s Lemonade 78.76 21.24
Hy-Top Pink Lemonade 68.83 31.17
IGA Grape Juice 83.04 16.96
Ladylee Grape Juice 93.32 6.68
Rosauer’s Orange Juice 51.40 48.60
Rosauer’s Pink Lemonade 61.59 38.41
Smith’s Kiwi Raspberry 75.16 24.84
Smith’s Kiwi Strawberry 85.05 14.95
Stater Bros. Lemonade 21.62 78.38
Stater Bros. Pink Lemonade 86.21 13.79
Western Family Pink Lemonade 64.07 35.93
696 Part III Case Study Assignments

The production study also showed the label change time on the Packmaster as follows:

Flavor from Flavor to Label Change Time (sec)

Albertson’s Pink Lemonade Western Family Pink Lemonade 824

Fry’s Lemonade Flav-R-Pac Lemonade 189
IGA Grape Juice Ladylee Grape Juice 177
Rosauer’s Pink Lemonade Albertson’s Pink Lemonade 41
Smith’s Kiwi Raspberry IGA Grape Juice 641
Smith’s Kiwi Strawberry Smith’s Kiwi Raspberry 66
Stater Bros. Lemonade Stater Bros. Pink Lemonade 160

The Packmaster was observed for a total of 45,983 sec. Out of this time, the Packmaster
was working for a total of 24,027 sec, down for 13,108 sec, and being set up for change
of flavor for 8848 sec. The average flavor change time for the Pfaudler bowl is 19.24
percent of the total observed time. The number of cases produced during this observed
time was 11,590. The production rate is calculated to be (11,590/46,384)3600, or about
907 cases per hour.
It was also observed that the Packmaster was down because of flipped cans (8.6 per-
cent), sensor failure (43.9 percent), and miscellaneous other reasons (47.5 percent).
The following information on the conveyors was obtained:

Name of Conveyor Length (ft.) Speed (ft/min)

Arrival conveyor
Depalletizer conveyor 28.75 12.6
Empty-cans conveyor 120 130
Filler bowl conveyor 10 126
Prewash conveyor 23.6 255
Accumulate conveyor 38 48
Prepack conveyor 12 35
Palletizer conveyor 54.4 76
Exit conveyor

The Pfaudler bowl was observed for a total of 46,384 sec. Out of this time, the bowl
was working for 27,258 sec, down for 10,278 sec, and being set up for change of flavor
for 8848 sec. The average flavor change time for the Pfaudler bowl is 19.08 percent of the
total observed time. The number of cases produced in this observed time was
11,590. The production rate is calculated to be (11,590/46,384)3600, or about 900 cases
per hour.

Pfaudler Bowl

Fruit Juice Flavors Working Time (%) Down Time (%)

Albertson’s Pink Lemonade 74.81 25.19

Albertson’s Wild Berry Punch 88.20 11.80
Best Yet Grape Juice 68.91 31.09
Best Yet Orange Juice 86.08 13.92
Crisp Lemonade 53.21 46.79
(continued)
Case Study 6 Concentrate Line at Florida Citrus Company 697

Fruit Juice Flavors Working Time (%) Down Time (%)

Flav-R-Pac Lemonade 79.62 20.38

Flavorite Lemonade 69.07 30.93
Fry’s Lemonade 80.54 19.46
Hy-Top Pink Lemonade 81.85 18.15
IGA Grape Juice 89.93 10.07
IGA Pink Lemonade 45.54 54.46
Ladylee Grape Juice 94.36 5.64
Ladylee Lemonade 91.86 8.14
Rosauer’s Orange Juice 64.20 35.80
Rosauer’s Pink Lemonade 100.00 0.00
Smith’s Kiwi Raspberry 92.71 7.29
Smith’s Kiwi Strawberry 96.49 3.51
Special Value Wild Berry Punch 80.09 19.91
Stater Bros. Lemonade 26.36 73.64
Stater Bros. Pink Lemonade 90.18 9.82
Western Family Pink Lemonade 66.30 33.70

The flavor change time was observed as given in the following table:

Flavor from Flavor to Flavor Change Time (sec)

Albertson’s Lemonade Rosauer’s Pink Lemonade 537

Albertson’s Lemonade Albertson’s Pink Lemonade 702
Albertson’s Limeade Fry’s Lemonade 992
Albertson’s Pink Lemonade Western Family Pink Lemonade 400
Albertson’s Pink Lemonade IGA Pink Lemonade 69
Albertson’s Wild Berry Punch Special Value Apple Melon 1292
Best Yet Grape Juice Special Value Wild Berry Punch 627
Flav-R-Pac Lemonade Flavorite Lemonade 303
Flav-R-Pac Orange Juice Rosauer’s Orange Juice 42
Flavorite Lemonade Ladylee Lemonade 41
Fry’s Lemonade Flav-R-Pac Lemonade 183
Furr’s Orange Juice Best Yet Orange Juice 684
Hy-Top Grape Juice Best Yet Grape Juice 155
Hy-Top Pink Lemonade Flav-R-Pac Lemonade 49
IGA Grape Juice Ladylee Grape Juice 67
IGA Pink Lemonade Best Yet Pink Lemonade 0
Ladylee Grape Juice Albertson’s Grape Juice 100
Ladylee Lemonade Crisp Lemonade 49
Ladylee Pink Lemonade Hy-Top Pink Lemonade 0
Rosauer’s Orange Juice Flavorite Orange Juice 0
Rosauer’s Pink Lemonade Albertson’s Pink Lemonade 98
Smith’s Apple Melon Smith’s Kiwi Strawberry 382
Smith’s Kiwi Raspberry IGA Grape Juice 580
Smith’s Kiwi Strawberry Smith’s Kiwi Raspberry 53
Special Value Wild Berry Punch Albertson’s Wild Berry Punch 62
Stater Bros. Lemonade Stater Bros. Pink Lemonade 50
Western Family Pink Lemonade Safeway Pink Lemonade 1153
698 Part III Case Study Assignments

Tasks
1. Build simulation models and figure out the production capacity of the concentrate
line at FCC (without considering any downtime).
2. What would be the capacity after considering the historical downtimes in the line?
3. What are the bottleneck operations in the whole process?
4. How can we reduce the level of inventory in the concentrate line? What would
be the magnitude of reduction in the levels of inventory?
5. If we address the bottleneck operations as found in task 3, what would be the
increase in capacity levels?

CASE STUDY 7 BALANCING THE PRODUCTION LINE AT SOUTHERN CALIFORNIA

DOOR COMPANY
Suryadi Santoso
California State Polytechnic University–Pomona

Southern California Door Company produces solid wooden doors of various designs for
new and existing homes. A layout of the production facility is shown in Figure 1. The
cur- rent production facility is not balanced well. This leads to frequent congestion and
stock- outs on the production floor. The overall inventory (both raw material and work in
process) is also fairly high. Mr. Santoso, the industrial engineering manager for the
company, has been asked by management to smooth out the flow of production as well as
reduce the lev- els of inventory. The company is also expecting a growth in the volume of
sales. The pro- duction manager is asking Mr. Santoso to find the staffing level and
equipment resources needed for the current level of sales as well as 10, 25, 50, and 100
percent growth in sales volume.
A preliminary process flow study by Mr. Santoso reveals the production flow shown in
Figure 2.

Process Flow

Raw wood material is taken from the raw material storage to carriage 1. The raw material
is inspected for correct sizes and defects. Material that does not meet the specifications is
moved to carriage 1B. Raw wood from carriage 1 is fed into the rip saw machine.
In the rip saw machine, the raw wood is cut into rectangular cross sections. Cut wood
material coming out of the rip saw machine is placed on carriage 3. Waste material from
the cutting operation (rip saw) is placed in carriage 2.
Cut wood from carriage 3 is brought to the moulding shaper and grooved on one side.
Out of the moulding shaper, grooved wood material is placed on carriage 4. From
carriage 4, the grooved wood is stored in carriage 5 (if carriage 5 is full, carriage 6 or 7 is
used). Grooved wood is transported from carriages 5, 6, and 7 to the chop saw working
table.
One by one, the grooved wood material from the chop saw working table is fed into the
chop saw machine. The grooved wood material to be fed is inspected by the operator to
see if
 Case Study 7 Balancing the Production Line at Southern California Door Company 699

FIGURE 1 Original Layout

Layout of
production facility
at Southern

California Carriage
1B
Carriage
2 Carriage
Door Company. 5
Rip saw (41)
Carriage
8
Carriage Carriage 3
1
Carriage
4
Moulding
sander (42) Moulding
Carriage sander
Carriage
6 7

Chop saw (43)

Chop saw (40)

Sand finishing

Sand finishing
Sa nd finishing

Double end tenoner (45)

Glue trimming

Glue trimming

Storage racks
Auto door clamp

Auto door clamp

Storage racks

Storage racks

Storage racks
Preassembly

Preassembly

Storage racks

there are any defects in the wood. Usable chopped parts from the chop saw machine are
stored in the chop saw storage shelves. Wood material that has defects is chopped into
small blocks to cut out the defective surfaces using the chop saw and thrown away to
carriage 8.
The chopped parts in the chop saw storage shelves are stacked into batches of a certain
number and then packed with tape. From the chop saw storage shelves, some of the batches
 700 Part III Case Study Assignments

FIGURE 2
Process sequences and present input/output flow for Southern California Door Company.

Quantity of machines
Rip saw Chop Saw (2)
(1416) (9840) Present total output capacity
Asterisk indicates that the work center supplies
13,744* two othe rs
Expected input of the work center to which the
712
arrow points

Moulding shaper
Sand finishing (6)
(712)
(576)

1640 576

Chop saw (2) DET*

(9840) (1840)

13,744* 1840

DET* Triple sander

(13,744) (560)

5568 560
1440

Preassembly Glue trimming (2)

(1st op.) (512)

1440 512

Preassembly Auto Door Clamp (2)

224
(2nd op.) (224)

The present total output capacity of DET represents the number of units of a single product manufactured in an eight-
hour shift. The DET machine supplies parts for two other work centers, preassembly (1st op.) and sand finishing. In
reality, the DET machine has to balance the output between those two work centers mentioned; in other words, the
DET machine is shared by two different parts for two different work centers during an eight-hour shift.

are transported to the double end tenoner (DET) storage, while the rest of the batches are
kept in the chop saw storage shelves.
The transported batches are unpacked in the DET storage and then fed into the DET
ma- chine to be grooved on both sides. The parts coming out of the DET machine are
placed on a roller next to the machine.
The parts are rebatched. From the DET machine, the batches are transported to storage
racks and stored there until further processing. The batches stored in the chop saw storage
shelves are picked up and placed on the preassembly table, as are the batches stored in
the storage racks. The operator inspects to see if there is any defect in the wood.
Defective parts are then taken back from the preassembly table to the storage racks.
Case Study 7 Balancing the Production Line at Southern California Door Company 701

The rest of the parts are given to the second operator in the same workstation. The
sec- ond operator tries to match the color pattern of all the parts needed to assemble the
door (four frames and a center panel). The operator puts glue on both ends of all four
frame parts and preassembles the frame parts and center panel together.
The frame–panel preassembly is moved from the preassembly table to the auto door
clamp conveyor and pressed into the auto door clamp machine. The pressed assembly is
taken out of the auto door clamp machine and carried out by the auto door clamp
conveyor.
Next, the preassembly is picked up and placed on the glue trimming table. Under a
black light, the inspector looks for any excess glue coming out of the assembly parting
lines. Excess glue is trimmed using a specially designed cutter.
From the glue trimming table, the assembly is brought to a roller next to the triple
sanding machine (the auto cross grain sander and the auto drum sander). The operator
feeds the as- sembly into the triple sander. The assembly undergoes three sanding
processes: one through the auto cross grain sander and two through the auto drum
sander.After coming out of the triple sander machine, the sanded assembly is picked up
and placed on a roller between the DET and the triple sander machine. The sanded
assembly waits there for further processing. The oper- ator feeds the sanded assembly into
the DET machine, where it is grooved on two of the sides. Out of the DET machine, the
assembly is taken by the second operator and placed tem- porarily on a roller next to the
DET machine. After finishing with all the assembly, the first operator gets the grooved
assembly and feeds it to the DET machine, where the assembly is grooved again on the
other two sides. Going out of the machine, the grooved assembly
is then placed on a roller between the DET machine and the triple sander machine.
The assembly is stored for further processing. From the roller conveyor, the grooved
assembly is picked up by the operators from the sand finishing station and placed on the
table. The operators finish the sanding process on the table using a handheld power
sander. After finishing the sanding, the assembly is placed on the table for temporary
storage. Finally, the sanded assembly is moved to a roller next to the storage racks to
wait for further processes.

Work Measurement
A detailed work measurement effort was undertaken by Santoso to collect data on various
manufacturing processes involved. Table 1 summarizes the results of all the time studies.
The current number of machines and/or workstations and their output capacities are as
follows:

Output Capacities

Machine Number of Machines Units/Hour Units/Shift

Rip saw 1 177 1416

Moulding shaper 1 89 712
Chop saw 2 615 4920
DET 1 3426 13,744
Preassembly 1 1 696 5568
Preassembly 2 1 90 720
Auto door clamp 2 14 224
Glue trimming 2 32 512
Triple sander 1 70 560
DET 1 460 1840
Sand finishing 6 12 576
702 Part III Case Study Assignments

TABLE 1 Time Studies Results for Southern California Door Company

Machine Machin Task Task

Name e Operation Numbe Task Description Observations
Number r (seconds)
Rip saw 41 Cut raw material into 1 Inspect size and make 5.7,6.6,5.05,6.99,5.93,7.52,
correct cross-sectional adjustments 5.37,7.21,8.96,6.68
dimensions 2 Grasp raw wood and 6.79,6.3,7.52,6.15,6.53,6.03,
feed into rip saw 6.09,7.31,7,5.78,
machine
3 Cut wood with rip 12.4,11.53,11.26,12.88,11.56,
saw 10.38,11.31,11.85,12.78,11.88
4 Remove cut pieces 10.56,9.94,9.78,11.9,11.44,
from rip saw and 8.87,7.35,10.93,12.47,10.34
place in carriage 3;
throw waste into
carriage 4
Moulding shaper 42 Grooving one side of 1 Get cut material from 11.52,12.83,14.64,8.25,12.58,
the raw material carriage 3 13.81,13.68,12.21,6.17,15.06,
11.93
2 Place cut pieces onto 16.61,16.58,14.43,21.16,
moulding shaper 18.17,25.14,26.15,30.06,35.16,
25.06,24.37
3 Groove one side of 28.13,29.41,29.07,31.41,30.75,
material with 38.95,39.83,42.27,39.32,
moulding shaper 40.12,36.3
Chop saw 40, 43 Chop material into 1 Inspect grooved 2.68,2.08,2.24,1.61,2.3,2.99,
proper lengths material for size and 3.02,3.11,3.21,3.02,3.06,2.79,
defects 2.51,2.96,3.23,2.37,2.64
2 Feed material and 16.81,14.56,18.81,20.13,
chop to smaller 23.25,18.53,16.53,25.56,25.3,
pieces 24.78,15.42,13.92,15.48,20.51,
17.79,23.54,17.01
3 Throw away 9.19,9.03,13.16,10.78,5.69,
defective parts to 4.1,6.9,9.16,3.6,3.22,8.83,
carriage 8 and stack 12.63,14.94,12.86,10.25,0.76,
chopped parts 10.63
Double end 45 Grooving frames 1 Get 2 to 4 frames 9.33,14.7,10.18,14.47,13.12,
tenoner (DET) from stack and feed 12.49,13.12,12.76,32.15,
into DET 33.94,13.23,11.97,9.21,24.86,
18.29,29.74,16.53,14.24,
12.78,15.38
2 DET grooves 60.21,58.77,57.23,59.81,
both sides of 61.64,60.29,59.85,61.43,
frames 63.59,62.71,61.2,59.19,58.47,
60.27,59.73,60.21,61.82,
62.85,58.94,57.23
10.4,11.57,19.15,16.94,12.68,
3 Remove frames and 31.47,36.97,13,14.5,14.62,
stack 15.76,26.82,32.14,30.67,22.43,
Inspecting and matching 29.61,34.92,18.27,20.31,24.88
Preassembly 1 frame parts 49.82,50.08,19.35,32.54,
1 Get frame parts from 35.31,33.43,37.84,42.17,
storage racks 49.04,55.09
(continued)
 Case Study 7 Balancing the Production Line at Southern California Door Company 703

Machine Machine Task Task Observations

Name Number Operation Number Task Description (seconds)

2 Inspect for defects 36.52,35.99,29.09,57.43,53.6,

and match frame 42.45,57.77,61.21,63.96, 56.41
Preassembling and parts by color
Preassembly 1 Match center 8.13,8.32,7.43,10.63,6.28,
2 gluing frames panelfour frame parts
and 6.48,7.29,7.34,4.82,5.24
by color
2 Glue and preassemble 19.5,24.1,23.84,22.94,21.75,
frame parts and 22.47,23.66,25.63,29.59,30.09
center panel
3 Place assembly in 4.38,2.71,4.35,3.69,3.04,2.62,3,
auto door clamp 3.78,3,3.23
conveyor
Auto door clamps 52, 54 Clamping preassembly 1 Conveyor feeds 6.55,5.05,6.86,4.77,7.68,5.33,
preassembled parts 5.24,7.3,5.71,6.55
(preassy) into
machine
2 Press the preassy 221.28,222,220.35,224.91,

194.4,231.82,213.34,206.75,
223.62,227.44
3 Assy comes out of 4.22,5.69,7.15,5.78,5.1,4.75,
machine 5.53,5.1,4.24,4.84
Glue trimming Trimming excess 1 Remove assy from 35.74,17.96,30.59,17.39,
glue out of the auto door clamp 21.48,10.15,16.89,10.87,
assembly machine and inspect 10.59,10.26,14.23,11.92,
for excess glue 24.87,10.91,11.77,15.48,
29.71,10.86,19.64
2 Trim excess glue 58.53,90.87,67.93,70.78,
70.53,77.9,85.88,86.84,78.9,
95.6,78.5,72.65,72.44,91.01,
86.12,84.9,72.56,79.09,77.75
Triple sander 46, 47, Sanding the assembly 1 Get assy from stack 2.45,3.56,3.18,3.16,3.32,3.58,
48 through three different and feed into sander 4.22,2.27,4.76,3.9
sanding machines 2 Sand the assembly 30.72,32.75,34.13,35.66,37,
36.31,36.84,37.03,37.44,38.54
3 Remove sanded assy 3.31,6.54,5.03,5.51,5.22,5.84,
and stack 5.38,6.69,4.22,6.44
Double end 45 Grooving sanded 1 Feed assy into DET 5.99,6.14,6.49,6.46,6.42,6.64,
tenoner (DET) assembly 3.21,4.11,3.71,4.2
2 Groove assy 31.97,32.93,35.11,33.67,
34.06,33.21,33.43,35.23,
33.87,33.72
3 Remove assy and 3.84,3,3.06,2.93,3.06,2.85,
stack 2.88,3.22,1.87,2.41
Sand finishing the
Sand finishing 1 Get part and place 3.49,3.42,3.47,3.29,3.36,3.2,
assembly
on table 5.73,3.02,3.39,3.54,3.71,3.48
2 Sand finish the 215.8,207.57,244.17,254.28,
part 238.36,218.76,341.77,247.59,
252.63,308.06,221.27,233.66
2.26,2.95,2,1.41,3.79,2.74,4.7,
3 Stack parts 3.35,3.09,2.75,2.59,2.71
704 Part III Case Study Assignments

FIGURE 3
Groups of operators for Southern California Door Company.

Minimu Number
Work Center/ m of Utilizatio Group of
Machine Quantity Operators n Operators Notes
Required Working (Shift)
Sand finishing 6 6 1.00 *
Triple sander 2 4 0.51 ****
Glue trimming 3 3 0.75 ***
Auto door clamp 6 0 0.86
Preassembly (2nd op.) 1 1 0.80 **
Preassembly (1st op.) 1 1 0.21 *****
DET 1 2 0.31 **** Grooving assembled doors
1 2 0.08 **** Grooving frames
Chop saw 1 1 0.47 ****
Moulding shaper 1 1 0.54 *****
Rip saw 1 1 0.27 ****

DET Rip saw Moulding shaper Preassembly (1st op.)

(0.39) (0.27) (0.54) (0.21)

Triple sander
(0.51)

Sand finishing Glue trimming

(1.00) (0.75)

Chop saw
(0.47) Preassembly (2nd op.)
(0.80)

Additional data are shown in Figures 2 and 3.

Tasks
Build simulation models to analyze the following:
1. Find the manufacturing capacity of the overall facility. What are the current
bottlenecks of production?
2. How would you balance the flow of production? What improvements in
capacity will that make?
3. What would you suggest to reduce inventory?
4. How could you reduce the manufacturing flow time?
 Case Study 8 Material Handling at California Steel Industries, Inc. 705

5. The production manager is asking Mr. Santoso to find out the staffing and equipment
resources needed for the current level of sales as well as 10, 25, 50, and 100 percent
growth in sales volume.
6. Develop layouts for the facility for various levels of production.
7. What kind of material handling equipment would you recommend? Develop the
specifications, amount, and cost.

CASE STUDY 8 MATERIAL HANDLING AT CALIFORNIA STEEL INDUSTRIES, INC.

Hary Herho, David Hong, Genghis Kuo, and Ka Hsing Loi
California State Polytechnic University–Pomona

California Steel Industries (CSI) is located in Fontana, California, approximately 50

miles east of Los Angeles. The company’s facility, which occupies the space of the old
Kaiser steel plant, covers about 400 acres. The facility is connected by 8.5 miles of roads
and a 22- mile railroad system. CSI owns and operates seven diesel locomotives and
140 flat and gondola cars.
Founded in 1984, CSI is a fairly new company. CSI produces and ships over 1 million
tons of steel annually. Future projections are for increased production. Therefore, CSI has
invested hundreds of millions of dollars in modernizing its facilities.
The basic boundary of our defined system runs around the three main buildings: the
tin mill (TM), the #1 continuous galvanizing line, and the cold sheet mill (M). Within the
tin mill and cold sheet mill are several important production units that will be examined
(see Figure 1).
The tin mill contains a 62" continuous pickling line, the 5-stand tandem cold mill (5-
stand), the box annealing furnaces, and the #2 continuous galvanizing line. The cold
sheet mill contains the cleaning line and additional box annealing furnaces. The #1
continuous galvanizing line is contained by itself in its own building.
CSI produces three main steel coil products: galvanized, cold rolled, and full hard.
Roughly, galvanized coils make up about 60 percent of the total coils produced. The cold
rolled coils are 35 percent of the coils and the full hard are the remaining 5 percent. Coils
are also categorized into heavy gauge and light gauge. Assume that heavy-gauge coils
are produced 60 percent of the time and light-gauge coils 40 percent of the time.
The study will begin with the coils arriving off the 5-stand. The coils weigh from 5 to
32 tons, with a mode of 16 tons. Most of the coils, 70 percent, that will be cold rolled
coils will be processed first through the cleaning line at the cold sheet mill in order to
remove the grime and residue left from the cold reduction process at the 5-stand. The
other 30 percent are a “mill clean” product, which will not need to undergo the cleaning
process since the coils are treated additionally at the 5-stand. After exiting the 5-stand,
the coils are moved by a crane to the 5-stand bay to await transportation to the next stage
by coil haulers. The coils that are to be annealed need to be upended, or rotated so that
the coils’ core is verti- cal. The only upender is located at the cold sheet mill. Since
about 66 percent of the coils are annealed at the tin mill, they need to be transported to
the tin mill and brought back to the cold sheet mill to be upended again.
Currently, coils are transported to and from different mill buildings by human-driven
diesel coil haulers that have a 60-ton payload capability. A smaller 40-ton coil hauler
706 Part III Case Study Assignments

FIGURE 1 Cold rolled coils

shipped
Layout for
California Steel
Industries.

TM box 5-stand
annealing CSM box
Upender
annealing

#2
galvanizing
Cleaning
Tin mill

Cold sheet mill

Full hard coils
shipped
Galvanized coils
shipped

Galvanize mill Notes:

#1 Full hard coils = 5%
Galvanizing Galvanized (#1 & #2) coils = 60%
Cold rolled coils = 35%

Mill clean = 30%

CSM clean = 70%
TM box annealing = 2/3
CSM box annealing = 1/3

Galvanized coils
shipped

transports coils that are to be moved around within a building. There are two 60-ton haulers
and two 40-ton haulers. Assume that one hauler will be down for maintenance at all times.
The following are the process times at each of the production units:

5-stand Normal(8,2) min

#1 galvanizing line Normal(30,8) min
#2 galvanizing line Normal(25,4) min
Cleaning Normal(15,3) min
Annealing 5 hr/ton

Annealing is a batched process in which groups of coils are treated at one time. The an-
nealing bases at the cold sheet mill allow for coils to be batched three at a time. Coils can
be batched 12 at a time at the tin mill annealing bases.
Assume that each storage bay after a coil has been processed has infinite capacity.
Coils that are slated to be galvanized will go to either of the two galvanizing lines. The #1
contin- uous galvanizing line handles heavy-gauge coils, while the #2 galvanizing line
processes the light-gauge coils.
The proposed layout (see Figure 2) will be very much like the original layout. The
pro- posed material handling system that we are evaluating will utilize the railroads that
connect the three main buildings. The two rails will allow coils to be moved from the tin
mill to the cold sheet mill and the #1 galvanizing line. The top rail is the in-process rail,
which will
 Case Study 8 Material Handling at California Steel Industries, Inc. 707

FIGURE 2
Proposed coil TM4 Train coil TM5 TM7
car
handling layout
for In- 5-
process stand
California bay
1L 1R
bay
5-stand
Steel TM11
Industries.
Coil skid

2L
Finished 2R Finished-
goods bay goods bay
Coil transfer
3L
car 3R
TM10 Rail to #1 galvanizing line,
TM14 CSM, and shipping

#2 galvanizing line
TM15
exit bay
#2 galvanizing line
enter bay
move coils that need to be processed at the cold sheet mill or the #1 galvanizing line. The
bottom rail will ship out full hard coils and coils from the #2 galvanizing line. The train
coil cars will be able to carry 100 tons of coils.
In addition, a coil transfer car system will be installed near the #2 galvanizing line. The
car will consist of a smaller “baby” car that will be held inside the belly of a larger
“mother” car. The “mother” car will travel north–south and position itself at a coil skid.
The “baby” car, traveling east–west, will detach from the “mother” car, move underneath
the skid, lift the coil, and travel back to the belly of the “mother” car.
Crane TM 7 will move coils from the 5-stand to the 5-stand bay, as in the current lay-
out. The proposed system, however, will move coils to processing in the #2 galvanizing
line with the assistance of four main cranes, namely TM 5, TM 11, TM 14, and TM 15.
Crane TM 5 will carry coils to the coil skid at the north end of the rail. From there, the
car will carry coils to the south end of the rail and place them on the right coil skid to
wait to be picked up by TM 15 and stored in the #2 galvanizing line entry bay. This crane
will also assist the line operator to move coils into position to be processed. After a coil
is galva- nized, crane TM 14 will move the coil to the #2 galvanizing line delivery bay.
Galvanized coils that are to be shipped will be put on the southernmost coil skid to be
transported by the coil car to the middle skids, where crane TM 11 will place them in
either the rail or truck shipping areas.
One facility change that will take place is the movement of all the box annealing fur-
naces to the cold sheet mill. This change will prevent the back and forth movement of
coils between the tin mill and cold sheet mill.

Tasks
1. Build simulation models of the current and proposed systems.
2. Compare the two material handling systems in terms of throughput time of coils
and work-in-process inventory.
3. Experiment with the modernized model. Determine what will be the optimal
number of train coil cars on the in-process and finished-goods rails.